Maine home sales were down last year, while home prices continued to grow in the low-inventory single-family home market.
Nearly 20% fewer housing units sold statewide last year, according to the Maine Association of Realtors, while the median home sales price increased by more than 7% to $360,000.
Paul McKee, president of the Maine Association of Realtors, says it has been a seller's market for the last two and a half years, and homeowners have little reason to put their property on the market if they have a low mortgage interest rate and no pressure to move.
"A lot of people don't want to step into today's rate of 6.5%. If you're in a 3% rate now there's not a lot of incentive outside of that lifestyle change that you feel you need to make," he says.
McKee says in high-demand areas such as Cumberland County, the median sales price is more than $530,000, and bidding wars are still an issue. He says the expectation is that interest rates will come down in 2024, prompting more homeowners to sell, and that will balance supply and demand.
McKee says the Great Recession in 2008 slowed development for years.
"We've been underdeveloped since 2008 as far as housing goes. That's a 14-15 year period of being underdeveloped. We need to overdevelop for years to catch up to where supply will calm down demand," he says.
McKee says he believes the number of building permits being issued is going up. But he says affordable homes — those that are $300,000-$400,000, are what the market really needs, as opposed to million dollar houses builders tend to favor for higher profits.
"A developer might say, 'I could do something affordable in your area.' People say, 'Oh, we need affordability and accessibility, but not in my backyard.' If we can be more inclusive then we can go a long way," he says.
McKee says the number of housing units sold in Maine last year dropped to well under 14,000, down from nearly 17,000 the year before.
