Mar. 22—Christian Foster considered selling his home in Cape Elizabeth four years ago, but decided to rent it out instead.
He thought about it again in the fall of 2019, but his next-door neighbor's home went on the market, so again Foster waited.
Finally, this winter, with his tenants' lease expiring, Foster listed the three-bedroom, two-bath home located in a neighborhood close to Fort Williams. There was a one-day showing. Multiple offers came in. Three of them included escalation clauses.
The price "kept going up and up and up," Foster said. "Those escalation clauses are incredible. When you have three of them going at it, wow."
The sale closed last week for $676,000 with no appraisals and no inspections. Foster's real estate agent, Jim McFarlane of Portside Realty, had set a listing price of $615,000.
"The goal was to get people to compete," said Foster, who said he extensively renovated the home he bought 15 years ago for $330,000. "I wasn't surprised. My mother's a realtor, so I know what's going on."
Everywhere in Maine, the demand for single-family homes shows no signs of slowing down.
Sales in February rose 22.8 percent from the same month in 2020, just before the coronavirus pandemic disrupted life. A total of 1,062 homes changed hands last month compared with 865 the previous February, according to a Maine Listings report released Monday.
The median sales price statewide climbed 12.9 percent to $244,900. A year ago, that figure — with half of homes selling above and half below — was $216,900.
February's data continues a hot trend for Maine home sales. For the three-month period ending Feb. 28, sales of existing single-family homes in Maine increased by 25 percent from a year earlier, while the median price of homes sold rose by 16 percent.
Over the past year, home sales rose by 10.3 percent statewide when compared with sales between March 1, 2019 and Feb. 29, 2020.
The biggest growth in February occurred in the state's least populous counties, with Washington County leading the way at 67.9 percent and Piscataquis not far behind at 63.3. By contrast, Cumberland County showed only 4.3 percent growth and York checked in at 15.8.
"It's such a tight real estate market to begin with," said Aaron Bolster of Allied Realty in Skowhegan, president of the Maine Association of Realtors, noting the shrinking inventory in the state's urban areas. "Now they're filtering into the path less traveled. If you move to Washington or Piscataquis County, what difference does it make as long as you have an internet connection?"
The three-month rolling median price of a home in Maine actually dropped slightly over the past month, by nine thousand dollars to $260,000. Bolster said that drop doesn't signal a cooling market.
"It might mean something," he said, "but the demand is still clearly higher than what's available to sell. Many properties are seeing multiple offers, which means that sellers are often receiving more than the actual listing price."
February is typically the slowest month of the year for real estate, and the monthly total this year is lower than any of the previous 11 months. Fewer homes listed for sale is another factor in that equation, as are historically low interest rates.
Bolster said buyers are acting more quickly than they were a year ago, when homes typically stayed on the market for 52 days before a sale. Last month, that average wait had dropped to 21 days.
"Over the coming year, we're hopeful for a return to pre-pandemic conditions, with more sellers entering the market which will ease the pent-up demand," Bolster said. "Our advice to buyers until then is to work with a realtor to learn your market, develop a strategy, and remain committed and patient."
Sue Lamb of Town & Shore Realty has been a broker for 40 years. She said she thought last year's market was hot.
"But since January, we are seeing so many more multiple-offer situations and escalation of prices beyond what we ever envisioned," she said. "It's really just pent-up buyer demand. There are few listings and so many more buyers."
McFarlane, who worked on the sale of Foster's home, is in his 38th year of the local real estate business. He said the lack of inventory is leading to greater competition for any home that comes on the market.
Escalation clauses, in which a buyer agrees to pay more (up to a specified cap) should another offer come in higher, started appearing last May and June but this year have become almost commonplace.
"It's a way of declaring people's intentions," McFarlane said. "This is a fair way of someone saying 'I really, really want it' and someone else saying, "I really, really, really want it.'"
Regionally, the northeast saw sales of single-family existing homes rise 13.2 percent and prices 20.5 percent to $356,000, according to the National Association of Realtors. Nationwide, sales in February rose 8.0 percent over the same month last year and prices rose 16.2 percent to $317,100.
Foster said buyers from California, Connecticut and New York made above-listing offers with escalation clauses. That fits a trend of out-of-state interest in Maine, which saw 35 percent of homes purchased in February by people moving to the state. In February of 2020, that percentage was 21, or roughly one in five sales.
The actual number of out-of-state buyers of Maine homes were 371 last month and 179 last February. Massachusetts led the way, followed by New Hampshire, New York, California and Florida, according to the Maine Association of Realtors.
Foster, who is engaged to be married, is now looking for something with more bedrooms than his current dwelling, in another part of town. So far, he hasn't had any success.
"It's just impossible," he said. "If that (house that just sold) had been my primary residence as of today, I would be in trouble."