Why Did Maine Home Prices Rise During The Pandemic? A Look At Real Estate Trends
If price is your goal, this may be a good time to sell a home in Maine. The Maine Association of Realtors is reporting that home prices this August jumped 17% over August one year ago.
Maine Public’s Irwin Gratz spoke with Maine Association of Realtors President Tom Cole about the latest real estate trends.
Ed. note: this interview has been edited for length and clarity
Gratz: We'll return to price in a bit. But let's start with how many home sales are we seeing in the state?
Cole: What's happening is we don't have as many homes on the market as we did, as compared to last year. For example, August of 2020, we have almost 40% fewer homes available on the market as compared to August of 2019. However, sales continue to grow. And people may ask ‘how is that happening?’ We are finding that a lot of people are looking in markets where they haven't really looked before. For example, Androscoggin County went up in the number of units sold, as well as more rural areas. Lincoln County went up significantly.
Obviously, those higher prices are good for sellers. But what's the current environment like for home buyers?
Well, that's a very good question. And so to look at that closely, I think we have to examine where we are on interest rates. For example, when rates went from about 4%, to about 3%, which is where they are now, affordability actually went up by about 25% for many people, which is making it a little easier, believe it or not, to buy a home than it might have been, even with rising prices.
I know down here in Southern Maine, a lot of people are wondering if folks are not investing in a lot of second homes, especially people from out-of-state. Do you have any way of knowing whether that trend is for real, either in Southern Maine or in the state as a whole?
We're looking at numbers. And we've been starting to look very closely at zip codes. Actually, for many years, we've kept track of that data. So we do see an actual bump in the numbers. In July, we saw 5.5% more buyers from out of state as compared to July of 2019. And for August numbers, we saw 9.7% more out of state buyers this August than we did August of 2019.
Do we know where the out-of-state buyers are coming from?
So behind Maine purchasers — Massachusetts, then New Hampshire, then Florida, and trailing behind is New York.
I know people who also told me they're reluctant to put their house on the market because, given the pandemic, they just don't want strangers in their house.
I think that was really kind of the impetus in the beginning. For example April and May numbers were low. We were certainly low by double digits. And we were all concerned, we still are concerned, about the activity of having people in our homes, or looking at homes in general that are, you know, other people may be in. By following closely the state's guidelines for PPE, I think we've been helping to do our part to, if you will, flatten the curve, and to do the best we can to protect our clients, both buyers and sellers. And so I think that does help people to decide to put their home on the market.
So now we're going to move into fall and winter. What's the outlook, do you think, for home sales over the next several months?
It looks very good. In fact, last December, we had the biggest December ever. So looking back in time, I think people realized that while typically the holiday months can be slow. That's a great time to look, if other people aren't looking. So I think because of the fact that we just don't have enough homes available for people on the market. I do expect that that trend of a strong market will continue. Certainly more people are building houses, which is really going to be a help. But that's going to take a while to have enough homes built to satisfy the demand for housing overall.
The August numbers drive home Cole's point that homebuyers were fanning out across the state. Home Sales In Lincoln County were up 20% over a year ago. Aroostook County up 23.5 % Piscataquis County is counting up nearly 26% and Somerset County up over 32 percent.