The current state of the Maine housing market doesn’t point to an imminent collapse. There are still challenges, such as an inventory shortage and higher interest rates. The market has demonstrated the ability to withstand these challenges. The steady rise in median sales prices (MSP) and the constantly increasing demand for specific properties suggest that the market is stable. However, many elements influence market dynamics, and proactive steps might be needed to deal with the imbalance in demand and supply to ensure stability.
What do you feel about your Maine housing Market performing at present?
The constant challenges of low inventory and high-interest rates have created an uneasy balance in the single-family housing market. According to the latest data from the Maine Association of REALTORS(r), December 2023 saw a notable increase in the median sale price (MSP), a 6.21 percent increase over the same timeframe in 2022. The MSP reached an astounding $350,500. This increase contrasts with the 6.14 percent drop in sales over the same time.
Paul McKee, the 2024 President of the Maine Association of REALTORS(r) and a veteran broker with Keller Williams Realty in Portland and the surrounding areas, explains the general trends. “The final year of sales in 2023 saw 13,622 residential sales that culminated with a median price of $360,000, a significant 7.46-percent increase from the previous period,” McKee states. Despite current issues, the dynamism of the price shift indicates the durability of Maine’s housing market.
Factors Influencing the Market Dynamics
The interaction between rising interest rates, as well as the unwillingness of sellers to sell their homes due to the ongoing supply/demand imbalances, have been significant characteristics of Maine’s real estate market. McKee says this inability to sell perpetuates the lack of homes available. Even though there is a modest increase in the number of houses on the market compared to last year, the 2.7-month inventory available inventory is far below the ideal six-month supply needed for an even market.
McKee proposes that the solution to the demand and supply issues depends on creating accessibility and affordable housing throughout states. The requirement for more than double the amount of inventory currently available to achieve equilibrium in the market underscores the need for a strategy to solve the issue. The Maine home market has reached a critical moment where proactive actions are required to address the current challenges and promote sustainable growth.
Anticipating the Future: Buyer Demand and Market Dynamics
As we look ahead to the new year, McKee anticipates a significant demand from buyers. Move-in-ready and well-priced properties continue to get many offers across most regions in Maine. This shows the resilience that the marketplace has. However, it also highlights the need for a strategic intervention to bridge the gap between supply and demand.
County-wise Analysis of the Maine Housing Market
The analysis below provides a comprehensive overview of the most critical counties, including the number of units sold and the respective average sales prices (MSP) for 2022-2023.
Statewide Trends Overall, the statewide real estate market experienced a substantial 19.07 percent decrease in units sold, ranging from 16,832 by 2022 down to 13,622 by 2023. However, the MSP showed resilience, registering an impressive 7.46 percent increase from $335,000 to $360,000 over the same time.
Androscoggin County saw a 22.67 percent reduction in sales, and the number of units sold dropped from 1,169 units in 2022 to 904 by 2023. In contrast to the decrease in the sales of homes, Androscoggin County experienced a significant 11.11 percent growth in MSP, which increased between $279,000 and $310,000. This suggests an inclination in the market toward higher-end properties.
Aroostook County: In Aroostook County, there was a decrease in the number of units sold, which fell by 19.13 percent, between 831 units in 2022 and a mere 672 in 2023. Incredibly, the MSP in the county had only a slight 0.81 percent change, ranging between $148,800 and $150,000. This level of stability in MSP suggests a reasonably stable pricing trend despite the decrease in sales.
Cumberland County: Cumberland, one of the biggest counties of Maine, experienced a 16.91 percent drop in sales, dropping from 3,306 in 2022 to 2,747 by 2023. However, Cumberland’s MSP showed an 8.01 percent increase, bringing the total to $531,111 compared to $491,723. The county is notable for an impressive drop in sales and a significant rise in median prices.
Franklin County: Franklin County faced a substantial 24.05 percent reduction in units sold, dropping from 474 in 2022 to 360 by 2023. However, the MSP for Franklin County exhibited a modest 1.42 percentage change, rising between $246,500 and $250,000. The market in the county is reportedly adjusting to the changing market, with an emphasis on ensuring that prices remain stable.
Hancock County: Hancock County saw a 20.42 percent decline in units sold, ranging from 769 by 2022 to just 612 in 2023. The MSP saw a substantial 13.80 percent growth, rising by $355,000 to $444,000. This suggests that, despite decreased sales, there’s an increased demand for higher-priced properties within Hancock County.
Kennebec County: Kennebec County has recorded a 15.77 percent reduction in the number of units sold, ranging from 1,2220 in 2022 to 1,282 by 2023. However, the MSP in the county showed a significant 9.61 percent increase, rising from $272,797 to $2,899,000. These trends indicate that the market is responding to changes in the market and focusing on maintaining the median price.
Knox County: There was a 14.49 percent decrease in the number of units sold in Knox County, dropping from 552 by 2022 to just 472 in 2023. However, the MSP showed a notable 10.26 percent growth, ranging between $390k and $430,000. This suggests a growing market for properties with higher prices and declining sales.
Lincoln County: Lincoln County experienced a more substantial drop in units sold last year, with a 20.67 percent decrease of 508 units in 2022 to 403 in 2023. However, the MSP in the county increased by 12.24 percent, from $392,00 to $440,000. This indicates a market in which higher-priced properties are getting more attention and could compensate for lower transactions.
Oxford County: Oxford County saw a notable 22.27 percent decrease in units sold, slipping from 907 units in 2022 to 705 by 2023. However, the MSP showed a hefty 15.64 percent growth, increasing between $275,000 and $318,000. This is a sign of an evolution in the market toward higher-cost homes, possibly caused by local conditions.
Penobscot County: Penobscot County faced a 19.45 percent decrease in the number of units sold, ranging from 1,753 in 2022 to 1,412 by 2023. Despite the decline, the MSP reported an 8.70 percent growth from $230,000. This suggests a robust market with a demand for higher-priced properties continues to be strong despite the decline in sales overall.
Piscataquis County: Piscataquis County, in contrast with the overall trend, saw a moderate 5.28 percent decrease in the number of units sold, moving between 341 units in 2022 and 323 by 2023. However, the MSP recorded a minor decrease of 0.47 percent, falling by $189,900 to $189,000. This is a remarkable situation in which the market remains steady despite the state’s general problems.
Sagadahoc County: Sagadahoc County recorded an 11.84 percent decline in units sold, dropping from 414 units in 2022 to 360 in 2023. However, the MSP has shown a 2.87 percent increase, ranging from $389,500 to $400,670. The county demonstrates an incredibly delicate balance in which price stability compensates for the lower sales volume.
Somerset County: Somerset County faced a 19.10 percent decline in units sold, ranging from 644 by 2022 to 521 by 2023. The MSP, however, showed an 8.36 percentage increase, ranging from $193,800 to 210,000. The county follows the nationwide trend of decreasing sales but with an impressive rise in median prices.
Waldo County Waldo County saw a 20.32 percent decline in units sold, slipping from 497 in 2022 to 396 in 2023. However, the MSP recorded an 11.30 percent increase, ranging from $292,00 to $325,000. This indicates that, despite declining transactions, the demand for higher-priced properties is still strong throughout Waldo County.
Washington County: Washington County faced a 22.04 percent decrease in sold units, ranging from 481 in 2022 to 325 in 2023. The MSP, however, showed a 2.33 percent increase, ranging between $215,000 and $220,000. This is a case in which the market is adjusting to a slight increase in median prices despite a decrease in sales volume.
York County: York County, one of the largest counties in Maine, was hit by a 22.18 percent reduction in the number of units sold, dropping between 2,664 units in 2022 and just 2,073 in 2023. Despite this decrease, the MSP recorded a 5.56 percent increase, increasing from $450,000 to $750,000. This county shows the overall trend of falling sales. However, it also shows a significant rise in median prices, which suggests potential growth in the high-end market.
Are Home Prices Dropping in Maine?
The data analysis shows that overall, the home prices in Maine do not show any significant decline. There’s been a 6.21 percent increase in the median sale price (MSP) from the end of 2022 until December 2023. But, this must be taken into account as the 6.14 percent reduction in the number of units sold at the same time. The varying trends across the individual counties add to the complexity of this report, as do certain areas showing resilience and even the growth of MSP despite declining sales.
- Maine’s Economic Strength: Maine has an unemployment rate lower than the national average and is paired with an expanding economy. This attracts new residents, driving an increase in the need for homes.
- Maine’s Dream Lifestyle: Renowned for its breathtaking landscapes, superior quality of life, and affordability, Maine stands as an appealing destination for people of all types of ages and life stages.
- Limited housing supply The housing market in Maine is limited, which puts upward pressure on prices because the demand is higher than the options available.
Is it a buyers’ or sellers’ housing market?
The current trends within Maine’s Maine housing market suggest that there is a complex scenario. While the median price for sales (MSP) has been showing an overall rise, there has been a noticeable decrease in the number of units sold. This has created a market with seller and buyer characteristics. Decreased inventory and rising interest rates create a competitive environment for move-in-ready and appropriately priced homes. However, the balance of the market tends to favor the seller’s side because of the rise in MSP and the ongoing challenges to demand and supply.
Maine Regional Housing Market Forecast
Examining the regional aspects of Maine’s housing market, the forecast for the most essential regions reveals promising trends and growth potential. The information spans from the beginning day of the year 2023, which is December 31st, to projections for January 31st, 2024, March 31st, 2024, and December 31st, 2024, and offers valuable insight into the trajectory for Portland, Bangor, Augusta, and Lewiston.
Portland, ME: This metropolitan statistical region (MSA) located in Maine offers a strong forecast and growth projection, with a projected rate of zero from the initial date through January 31st, 2024. which is followed by a substantial rise to 0.6 percent on March 31st, 2024, and then a significant increase to 5.3 percent by the end of the year on December 31st, 2024. The projections show a steady upward trend for Portland’s property market, reflecting the increased demand and positive dynamics in the market.
Bangor, ME: The Bangor region is following a similar path that begins with a steady growth rate of 0% from the beginning date through January 31st, 2024. The market then gains momentum, achieving a growth rate of 0.4 percent in March of 2024. The rate will increase to 5 percent by 2024 on December 31st. This is a good sign of Bangor’s housing market. Bangor’s home market results in a gradual but constant increase in the growth rate throughout the forecast.
Augusta, ME: The outlook for Augusta is a more active growth pattern that begins with a modest rate of 0.1 percent from the base date until January 31st, 2024. The market is gaining momentum quickly and will grow to a rate of 0.7 percent until March 31st, 2024. This is followed by a dramatic rise to 7.2 percent by the end of December 2024. The housing market in Augusta is set to experience significant growth, with projections for the end of the year reflecting an extremely positive future.
Lewiston, ME: Lewiston also offers a positive outlook, beginning with a rate of 0.3 percent from the initial date until January 31st, 2024. The market continues to expand and will reach a rate of 1.3 percent in March 2024. The market is on an impressive pace, with an estimated 7.3 percent increase by the end of December 2024. The housing market in Lewiston shows an ongoing upward trend, with substantial growth predicted during the forecast time.
The regional forecasts together depict the Maine housing market characterized by growth, with various degrees of acceleration across various regions. The forecasts show favorable conditions for sellers and buyers, as demand and market dynamics provide positive expectations for the upcoming months.