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Business and Economy

Buyers Priced Out Of Maine’s Hot Housing Market Are Grabbing Rural Land

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Linda Coan O'Kresik
/
BDN
The western Maine town of Rangeley is seeing a real estate boom prompted by people seeking a safe haven from the pandemic.

Outbid last year on a home in Greenville, Scott Merrill instead bought land to build a house.

Merrill, a trucker from Berwick, said he and his wife, Stacy, had looked for homes in Greenville for a few years because he enjoys snowmobiling and hunting and they have friends in the area. They plan to eventually retire on the 3.5-acre wooded property, which they bought for a little less than the asking price, and start building in the spring.

“I’m doing what everyone else wants to do,” Merrill said.

That type of decision has been more popular as the COVID-19 pandemic has led to record home sales and prices in Maine, particularly in rural areas, creating a housing shortage. More than 3,000 noncommercial land parcels were sold from January through June of this year, about double the number in the same months of 2020, according to data from Maine Listings, a subsidiary of the Maine Association of Realtors. In the first four months of 2021, more than $193 million in land was sold, more than triple the amount during the same time last year.

Strong sales crisscross the state, with more rural tourist centers such as Rangeley, Bridgton and Greenville seeing some of the highest demand for land from both Mainers and out-of-state buyers. Even more remote towns, including Whiting, are seeing many listings and quick sales. That demand has rippled through the market to lenders and builders, and many buyers who want to build new homes are told it will take a year or more.

Mark Doherty, a Massachusetts dentist, took a path to a land purchase similar to Merrill’s. After unsuccessful efforts to buy a home, he bought 2.25 acres in a new Greenville subdivision close to where his college football coach lives and near what he calls “the best snowmobiling in the Northeast.” He hopes to have his house built in about a year.

Doherty bought his land from Scott Harding, an agent at NextHome Experience in Greenville who also developed the 14-lot subdivision near Moosehead Lake where Doherty’s land is located. Harding said the subdivision normally would have taken up to three years to sell out, but the lots were snapped up within 30 days of going on the market last year by in-state and out-of-state buyers seeking getaways and future retirement homes.

“There’s no housing inventory, so you either buy a piece of land and do it yourself or you go home,” Harding said.

While there are deals to be had on some land, prices near water or other features can command 30 percent higher than they did pre-pandemic, Joe DiAngelo, owner of Century 21 Moose Country in Greenville, said. That’s a stark contrast to a decade ago in rural Maine, when DiAngelo advised sellers in Rangeley to avoid putting land on the market.

“You could have put up a ‘for free’ sign and nobody would have taken it in that rural part of Maine,” he said. “But that is not the case today. It’s amazing to watch.”

The strong stock market and low interest rates are helping drive land sales. Buyers also want a safe location in the same kind of land rush that DiAngelo saw after the Sept. 11, 2001 terrorism attacks, saying people “want to be tucked away in the woods in Maine.”

Jason Smith, owner of Points East Real Estate in Machias, recalled potential buyers telling him that they followed a map of COVID-19 outbreaks up the coast of Maine until they found Washington County, an area with a low number of cases. The combination of safety, good prices and available land overshadowed a six-hour drive from Boston to the Machias area. Previously, buyers were only willing to drive up to three hours.

“There also were good deals here in terms of what they could buy,” he said.

Smith’s sales territory includes nearby Whiting, which has among the most parcels of land for sale of Maine towns, according to Maine Listings. Smith said that’s because the town of almost 500 residents has land abutting rivers, lakes and the ocean.

Loan officers across the state are backed up with pending construction loans, Aaron Bolster, president of the realtors’ association, said.

The only drawbacks now are that building materials costs are high, and demand for land surveyors, architects, carpenters, plumbers, electricians and others involved in building a home is so strong that many will only take on projects a year or more out.

“We try to educate people about being realistic about when they can have a property they can move into,” DiAngelo of Century 21 said.

This story appears through a media partnership with the Bangor Daily News.