Maine home prices up 15% in August as sales volume eases

·3 min read

Sep. 22—The number of existing single-family homes sold in Maine dipped slightly in August, but prices continued to rise.

The Maine Association of Realtors reported Wednesday that 2,063 homes changed hands last month, down almost 5 percent from the 2,166 sold in August 2020. But despite the lower volume, the median sales price rose to $310,000, up nearly 15 percent from the $270,000 median price in August 2020. The median price means half of the homes sold for less money and half sold for more.

Aaron Bolster, president of the association, said the numbers suggest the real estate market might be stabilizing. In the early stages of the coronavirus pandemic in the spring of 2020, home sales plummeted, but since then, sales and prices have shot up markedly as Maine has become more attractive to out-of-state buyers.

"It could be the start of something, but we don't have enough data," he said, because sales have only dipped for the past couple of months. Bolster also said total Maine home sales from January through August of this year remain well above sales during the same time period in 2019 and 2020.

Still, he said, the high prices and multiple offers on homes that are for sale may be frustrating some buyers and pushing them to the sidelines.

"If you get excited about a home and put an offer in and don't get it and then do that on home two and home three and home four," potential buyers can decide to stay put and drop out of the market, he said. "It can get frustrating."

Bolster said an unusual feature of today's real estate market is that it is largely disconnected from the job market. Typically, if a business opens or expands somewhere, that draws in workers who then look for a home, he said. But that's not happening now, with many out-of-state buyers making the move not for a job, but to escape surges in the pandemic in larger cities and opting for a more attractive lifestyle in Maine.

Many out-of-state buyers decided to make the move to Maine after their offices in large cities closed and they began working from home, eliminating any concerns about commuting time.

Bolster said out-of-state homebuyers typically make up about 25 percent of the real estate market in Maine, but they now account for more than 35 percent of homes purchased in the state.

"The out-of-state buyers are driving the (home) appreciation up," Bolster said, "(and) they're bringing their jobs with them."

He said a lot of clues to how strong the market will remain will come this winter, typically the slowest time for home sales in Maine. But the pace was brisk the past two winters, he said, so if it remains active this year, that's a sign that the market hasn't cooled.

By county, home sales varied widely during the most recent three-month period, the Maine Association of Realtors said. For instance, home sales rose 24.3 percent in Franklin County and dropped nearly 30 percent in Piscataquis County during the June-July-August period, compared with the same three months in 2020. The median sales price rose in all 16 counties in the state during the three-month period.

The National Association of Realtors said there was a 2.8 percent decline nationally in home sales in August compared with a year earlier, and prices rose 15.6 percent to a median of $363,800. In New England, there was a 2.7 percent decline in home sales last month compared with August 2020, and the median sales price rose 16.8 percent to $407,800.

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