Falling Maine home sales are ‘hurting people’
Maine’s real estate market continues to have tight inventory and monthly double-digit price increases throughout much of the state.
That’s good news for sellers but reflects an overall weakness in total sales in the market. And it isn’t helping prospective buyers.
The total dollar volume of residential sales declined almost 21 percent from January through April of this year, compared with the same four months last year, a drop linked to the shortage of homes on the market, according to the recent summer edition of Maine Realtor, published by the Maine Association of Realtors.
Residential sales across the state were down 24 percent to 3,808 units in the first four months of this year, compared with 5,021 during that same time last year. Single-family home sales decreased 26 percent to 3,118 units across Maine. Condos were down 15 percent to 431 sold this year.
Land sales decreased the most, almost 35 percent to 949 properties this year, with the value of those sales falling the same percentage. Land sales reached almost $269 million in 2022, but fell to $110 million this year.
Land purchases, especially in rural Maine, became popular in 2021, when prospective buyers who couldn’t find an affordable house opted to build one instead. In the first four months of 2021, more than $193 million in land was sold, more than triple the amount during the same time in 2020. Since then, escalating prices for building materials and labor shortages have dampened land sales.
Land near ski resorts still fetches high prices. The most expensive parcel of land sold in Maine this year was $2.65 million in Rangeley, which is near Saddleback Mountain.
Mobile home sales were down the least among real estate sales at almost 12 percent to 259. The decline comes after that type of housing spiked last year, when retirees, renters and first-time buyers snapped them up as an affordable alternative to a house. Some 640 mobile homes were sold from January through July of last year, up 13 percent compared with the same period in 2021, according to the Maine Association of Realtors. The median sold price was up almost 17 percent to $130,500 in that timeframe.
Fewer home sales translates into a lower total dollar volume for the four-month comparison period. Residential sales topped $1.9 billion in 2022, but fell 21 percent to $1.5 billion in 2023.
High mortgage rates, inflation and economic uncertainty contributed to making the market an uphill challenge for buyers.
“The real estate market in Maine experienced a slow start in 2023, primarily due to a shortage of homes for sale,” said Carmen McPhail, president of the Maine Association of Realtors.
The group released May numbers last month showing hope of a rebound with a 43 percent increase in the number of homes sold, compared with April.
That could be because there were so few homes for sale in April, according to Cheryl Haggerty, owner of Haggerty Realty in Lisbon Falls. The shortages have been tough for real estate agents, especially those who began selling during the market frenzy over the past couple years, she said.
Three weeks ago, she searched the home inventory and what other agents had listed or pending. Many had nothing.
The tight market is keeping would-be buyers out of the market as they lose out during competition for homes. Haggerty said one home she listed for $350,000 in Lisbon recently sold for $410,000.
“There are less things to sell,” she said. “This really is hurting people.”
Source: Bangor Daily News
