Apr. 22—Maine's housing market continued its red-hot streak last month, with sales of existing homes and prices showing double-digit increases compared with a year earlier.
Soaring prices and huge numbers of transactions in the first three months of the year in Maine are flipping conventional wisdom on its head, and sales trends as well.
More than 1,300 homes were sold statewide in March, a nearly 17 percent sales bump compared with the year before. The statewide median sales price increased by almost 18 percent compared with a year prior to reach $268,500, the Maine Association of Realtors reported Thursday. The median indicates that half of homes sold for more money and half sold for less.
Statewide, homes stayed on the market for only 11 days on average last month before being sold. For the same month in 2020, that figure was 48 days.
"We thought the world was going to end a year ago, and the market just accelerated so fast and hasn't let up," said Aaron Bolster of Allied Realty in Skowhegan, president of the Maine Association of Realtors.
In the first three months of the year, more than 3,600 homes were sold in Maine, a 19 percent increase from the same time last year. The three-month statewide median price increased by more than 14 percent to $256,000. Every county saw significant price increases, including rural parts of western and eastern Maine, according to the association.
"The median sales price is experiencing double-digit growth," Bolster said. "That might happen in really big cities and possibly in southern Maine, but that does not happen in the rest of the state. Those numbers are astounding."
Almost 100 homes sold in Piscataquis County between January and March, compared with fewer than 60 sold in the first three months of 2020. The median sales price increased by almost 23 percent to $147,500.
It's the biggest sales boom since the late 1980s, said Neil Mallett, owner of Mallet Real Estate in Dover-Foxcroft.
"We never expected this to happen — with COVID, we thought it would be really slow," Mallett said. "Everyone is just in this mood to buy and move and do what they are going to do right now."
Just like the tight southern Maine market, listings don't last long, and they are fetching above the asking price, Mallett said. Lakefront homes, shorefront lots and land to build a home or camp are especially popular. Buyers are coming from all across Maine and New England, but also Florida and New York, both to purchase second homes and to take up remote work in the central Maine woods, he added.
"Prices are coming in on lakefront property more than I would have dreamed of two years ago," Mallett said. "This seems to be sustaining itself pretty well — this boom has lasted longer than I expected."
Sales and prices have surged in other far-flung parts of Maine including Franklin, Washington and Somerset counties.
Meanwhile, the market is slower in southern Maine. Sales in Cumberland County actually slumped by more than 3 percent in the first three months of 2020 and stayed almost flat in York County. Median sales price increases were modest — 15 percent in Cumberland and almost 17 percent in York counties — compared with bumps of 20 percent or greater in more than half the counties in the state.
Nationally, home sales increased by 10.4 percent in March compared with a year earlier. Prices also rose by 18.4 percent to reach a national median sales price of $334,500. Regionally, sales in the Northeast jumped 16.9 percent, and the regional median price increased by 21.4 percent to $364,800.
Derrick Buckspan, a RE/MAX Realtor in Portland, said the perception is that there is no available housing inventory in Greater Portland, and that what is available won't last long. Some sellers schedule home walkthroughs for buyers in 15-minute blocks because the demand is so intense, he said.
"It is a bit of a race to get into properties — the perception of the marketplace is that there is no inventory," Buckspan said. Expensive properties, new construction, condominiums and building lots are all selling fast, he added.
"What we have is pent-up local demand, (and) we clearly also have people coming into the area from other markets," he said. "It is certainly creating shorter days on market and really aggressive bidding situations going to the benefit of sellers."
It is unclear when the frenzy might slow down. Reliable economic indicators — such as unemployment and job creation — now appear untethered to the residential real estate market, said Bolster, the Realtors Association president.
"When you see a real estate market doing what we are experiencing now, it is because employers are expanding businesses or bringing people into the area," Bolster said. "We have relatively high unemployment — it is not like we are creating jobs."
That leaves the question of when the situation will turn around.
"Where is the top? No one knows because we haven't been there yet," Bolster said. "We won't know until we start going down, and then we can look back. That is the bad thing from the real estate side, you don't know when you are at a peak."