Is Maine's Hot Real Estate Market About To Cool? Trade Group Looks Ahead.

Jan 17, 2019

Last year at this time, an index of real estate activity in Maine indicated that the market had risen to levels not seen since the Great Recession. This year, there are signs that things could cool off. Maine Public's Morning Edition host Irwin Gratz talks with the Maine Real Estate & Development Association's new president, Gary Vogel, about the condition of the real estate market in Maine, and what the future might hold, as the association holds its annual meeting Thursday in Portland.

Gratz: Mr. Vogel, welcome.

VOGEL: Good Morning,  Thank you.

The boom around greater Portland is easy to see. But what else is happening around the rest of the state? 

VOGEL:  Well, there's a lot happening around the rest of the state. We're starting to see more robust development occur in the Bangor market, in Lewiston -Auburn. Certainly there's a need for more housing and affordable housing. The governor is releasing the affordable housing bond that the voters voted on many years ago. And that will certainly spur development of additional, affordable housing throughout the state, which is sorely needed as business and the jobs increase and as greater Portland becomes a more attractive and more expensive place to live, there continues to be a greater need for affordable and workforce housing. So that's certainly one area that we know we're going to continue to see increased development.

Gary Vogel, the new president of the Maine Real Estate & Development Association, seen at Maine Public's Portland studios Jan. 15, 2019.
Credit Irwin Gratz / Maine Public

You know, in recent years, there's been some concerns about the retail sector and the shift to online retailing and what that's going to mean for the so-called "brick and mortar" stores.  Are we seeing more vacancies in that sector?

VOGEL: At the forecast conference we will hear from some retail experts who will be able to answer that question. I do know that there has been a lot of retail space that has been re-purposed and, in certain shopping centers and we're finding that there may be, you know, other office uses, call centers, light industrial uses. Many of these retail centers will be re-purposed for and that's a trend I think we'll continue to see. The prime retail locations, I think, are always going to be prime retail locations, and that's not going to change, but some centers that may be overbuilt, or may have vacancies, certainly will probably continue to see some of this re-purposing.

You, yourself, describe the real estate market as being on a "precipice" at the moment. Certainly the economy does continue to be strong;  there's a lot of construction going on. But we do see interest rates rising. We do see issues being raised about trade. Do you have any idea which way we're going to go?

VOGEL: Well, of course, anyone who really knew the answer to that would probably be doing very well financially, so I don't entirely. But one of the reasons we hold the forecast conference each year is really to hear from experts in all different segments of real estate and geographic areas of the state, and to hear their actual insight as to what's happening in their specific markets, and in specific sectors of the economy. We're also going to unveil the index, which will show the activity over the last year in a number of different segments. And I think we are at a very interesting time, with a lot of different, you know, countervailing factors, both politically, glolbally, interest rates and, certainly, we've had a very long expansion in the real estate market and so, it may very well may be that we're ready for, ripe for, a downturn. If we can get it right, the idea would be that if you have a gradual softening, that could be good for the real estate market and good for everybody, without having the booms and busts cycles that we've experienced in the past.

The Maine Real Estate & Development Association's Annual Forecast Conference & Member Showcase is scheduled for Thursday, Jan. 17, 2019, in Portland.

Originally published 7:40 a.m. Jan. 17, 2019