Maine’s real estate market continued a familiar pattern in September: increased sales have industry experts hopeful that a yearslong inventory shortage may be lifting, while buyers heave a sigh of resignation as prices continue to climb and competition remains stiff.
The median home sale price in Maine last month was $409,450 – a nearly 9% increase over the year before and the highest on record, according to data released Thursday by the Maine Association of Realtors. Prices are going up faster here than in the rest of New England and the U.S, which saw increases of 6% and 3%, respectively.
After years of declines, home sales inched upward almost every month in 2024 and continued to do so in September. Closings increased 5% compared to September 2023, with 1,486 homes changing hands, bucking regional and national trends of slumping inventory.
Year to date, sales are about 4% higher than they were over the same period last year, according to Paul McKee, president of the Maine Association of Realtors. The first nine months of 2023 saw the most sluggish sales since 2013.
Another positive sign: Maine’s inventory squeeze continues to show signs of lightening. There were 4,971 homes for sale in September, the most on the market in four years.
But real estate agents say it’s still below the need to fully balance the market.
There are simply more buyers than there are houses.
“The trend continues that people want to move to Maine or stay in Maine,” said Dave Demeo, a designated broker with ReMax Riverside in Topsham.
Maine is becoming increasingly appealing as other parts of the country battle various climate disasters, he said. So while inventory may be increasing, the market still feels tight, especially for well-priced houses in desirable areas.
Interest rates have leveled out after the see-sawing during and following the pandemic, causing more people to enter the market.
“Consumers are beginning to understand that what we experienced regarding interest rates from 2008 until the present were not historically normal,” McKee said. “Most times, people moving forward in life are not simply able to wait for the historic low interest rates of the past.”
The same goes for the high interest rates, which hit 7.79% in October 2023, the highest in 20 years.
According to mortgage buyer Freddie Mac, the 30-year fixed-rate mortgage averaged 6.44% as of Oct. 17.
Demeo attributes the increased inventory in part to the steadier interest rates.
“People who’ve been locked in because they didn’t want to get rid of their interest rate may have some comfort,” he said. “They don’t think it’s going to go back down to 3% in the next five years, so it makes sense for (them) to downsize or upsize.”
The same rationale has encouraged some buyers to enter the market.
“If you’re going to wait for interest rates to go down, you could wait 10 years,” said Amy Ferris, a real estate agent with The Masiello Group in Auburn.
Ferris and Demeo both said that while prices are consistently rising and there’s still competition among buyers, it’s a far cry from the craziness of the prior three years.
“I’m not seeing so much of the bidding wars, but as long as the house is priced (appropriately), you’re still going to get multiple offers,” Ferris said. “With the low inventory, it’s still a seller’s market and it’s going to be for a while … but buyers are getting their voice back.”
Demeo said he’s been able to negotiate with sellers a little more. A house that’s priced too high is more likely to sit on the market for longer, opening up more opportunities for leverage. He’s been doing more inspections, he said, which many people waived in recent years to compete with cash buyers and offers significantly over the asking price.
The Maine Association of Realtors also looks at three months of data in county-by-county comparisons to get a larger sample size of sale transactions.
Sales increased by about 5.8% between July 1 and Sept.30 compared to the same period last year, while prices increased about 6.7% to $400,000.
The number of sales statewide were inconsistent, with six counties reporting decreases and 10 reporting increases. Sales in Washington County were flat. At both ends of the spectrum, closings decreased by 15.5% in Sagadahoc County and increased by 19% in Hancock County.
Cumberland County remains the most expensive county in Maine, with a median sale price of $580,000, a 5.5% increase over the same three-month period last year. York County was the second highest, with a $527,000 median, an almost 9% increase. Six of Maine’s counties had a sale price over $400,000.
Aroostook County remains the least expensive in the state, with a median sale price of $175,000 – the only county with a price below $200,000.
Franklin County saw an almost 21% increase in prices, while Knox County reported a less than 1% dip, the only price decrease in the state.
Maine’s market is accelerating faster than the rest of the country.
According to the National Association of Realtors, U.S. home sales slid 2% last month, compared to the year before and prices increased at a slower rate than they did in Maine – about 3% to a similar median of $409,000. Regionally, sales in the Northeast dropped 6% and prices increased 6% to a median of $467,100.
