I am so proud to be called a Maine-iac. Maine is where I was born, went to school and grew up. I did hop the border to UNH for college and even spent a few years traveling around the country working for the National Park Service (loved wearing the Smokey Bear hat!) but I always knew I would come back home.
One of the best parts of working in real estate for over 25 years has been watching trends and trying to figure out where our real estate market is headed. Every year I’ve monitored interest rates and property values and watched people moving away and people moving in. I’ve seen the price of homes go from a level where many Maine people can afford to buy a home and live here, to a level where a strong Maine buyer offering $30,000 to $50,000 above the asking price will most likely be beat out by a buyer that is from out-of-state, has cash and is willing to waive building inspections.
Values in our market have gone WAY up from when I started in real estate in 1997 and I’ve seen a lot of phases of the market since then too. In the earlier days, home values would increase 5-8% a year, multiple offers were not as common, and we’d have to negotiate back and forth a few times before going under contract on a property. In 2008-2010 many parts of the country faced huge numbers of foreclosures, bankruptcies and a sharp decline in the housing market but during that time, we were very fortunate in this area. The real estate market slowed way down but home values stayed pretty steady and have continued to climb since then by 8-16% each year until covid came along.
All rules and conventional wisdom about the real estate market went out the window when covid hit. From February into June of 2020, our buyers saw competition from 5-15 other offers on every property and as a result home values jumped 15-20%. In 2021, it got even worse! Offers from buyers were coming in at $50,000 to $200,000 above the asking price and many were cash offers with no inspections and no appraisals. In late June of 2021, activity seemed to cool down. Our listings still sold over asking price in most cases, but we were receiving 2-5 offers versus 5-15 offers. But in the spring of 2022 things got crazy again with lots of showings, huge turnouts at open houses and 10 or more offers on each of our listings and many of those were from out-of-state buyers, once again making huge cash offers with no inspections and no appraisals.
So, what is going on right now? Since interest rates are now up above 5% and heading to 6% how is that going to influence our housing market?
We just finished the first half of 2022 and activity is down mainly because inventory has been low. The number of single-family homes sold in South Portland is down 13.1% as compared to 2021. Portland is down 3.1% and Cape Elizabeth is down 17.9%. But home values are way up! South Portland has seen as increase of 23.2% over 2021’s sales! There are lots of buyers in the market who are still waiting for the perfect property, and this means it will remain a strong seller’s market heading into the fall which is usually a very active time here.
If you would like to learn what you could get for your home in today’s market, give me a call. You may be pleasantly surprised! Enjoy summer, get out and enjoy Maine during these warmer months…remember winter is coming! 🙂