Maine has split into 2 drastically different housing markets

By Kathleen O’Brien, Bangor Daily News Staff

The state of Maine’s housing market is dramatically different depending on where a person wants to buy. 

Homes in Maine’s southern and coastal regions are much more expensive and harder to come by than properties in central and northern parts of the state, Maine Listings data on the state’s housing market show.

For example, a single-family home in Greater Portland will likely be available for a matter of days and cost much more than a comparable property in Dover-Foxcroft. 

This indicates the housing market is cooling and becoming more balanced in central and northern Maine, which comes as welcome news to prospective buyers in the area who were scared off by the housing frenzy Maine experienced during the pandemic. 

Prospective buyers in southern and coastal regions of the state, however, are still feeling the heat of a competitive and expensive real estate market. This is bad news for families who want or need to move to southern Maine but have a small budget. 

“You have these two Maines at play — the urban and rural and the waterfront and not waterfront,” said Matt Pouliot, broker and owner of Pouliot Real Estate based in Augusta. 

The shift is a notable difference from the midst of the pandemic when the price of homes across the state spiked and inventory everywhere was limited. Maine real estate agents believe the sudden trend was due to the prevalence of people working from home during the pandemic, as they could live anywhere while still keeping their jobs. 

Agents suspect southern and coastal Maine’s real estate market continues to remain tight because of the prevalence of job opportunities in those areas, as well as other factors that make those regions desirable to buyers. 

“The places where the jobs are [are] the urban centers and people like to be near the beaches, and that’s a big draw for the southernmost two counties,” said Julia Bassett Schwerin, a broker and realtor at Advisors Living Real Estate based in Cape Elizabeth. “When you get into the more rural areas, there isn’t the job base to support a lot of residents.”

Pouliot said people may also be interested in living in southern Maine if they commute to New Hampshire or Massachusetts for work. Others may want to retire in those areas to be close to larger hospitals and other service centers.

Prospective buyers who have their sights set on living in southern or coastal Maine will likely have to make concessions in order to buy property in their ideal communities, Schwerin and Pouliot said.

“There’s always a trade off between where you can make a living and do what you want to do for your career and what kind of housing you can find within a reasonable commuting distance,” Schwerin said. “If you want to work and live in Portland, you can’t have 5 acres and cows and horses.” 

Pouliot said first-time homebuyers should have realistic expectations about what homes will be attainable under current market conditions. 

“Not everyone is going to start with a 2,200-square-foot four-bedroom, two-bathroom colonial like you could in 2004,” Pouliot said. 

Buyers may also need to get creative in order to live in the more competitive and desirable areas of Maine, Pouliot said. This could look like a young family buying a muti-family home and living in one unit while gathering income from renting out the others in order to pay their mortgage. 

Schwerin and Pouliot agree the market conditions across the state will remain largely the same in the coming months, especially as property transactions in Maine grind to nearly a halt in the winter before picking up again in the spring. 

“Getting ourselves back to a balanced market is going to be slow and gradual, but I think there are signs that we’re going in that direction,” Schwerin said. 

Here’s a look at a few data sets real estate experts use to evaluate the housing market. 

Inventory 

A state or region’s housing inventory, or how many homes are for sale at a given time, can paint a picture of the area’s housing market. Housing inventory is usually measured by determining how many months it would take for the current number of listings to sell at the current rate of sales. 

A balanced market will have roughly six months’ worth of inventory, Schwerin said. 

As of last month, the state had slightly more than three months of inventory, according to data from Maine Listings. That’s an improvement from the two or fewer months of inventory Maine had in the heat of the pandemic-era housing market. 

Looking at each county’s inventory, however, reveals how different the housing market is depending on where in Maine a buyer is looking. 

For example, Washington County has a balanced market with more than six months of inventory, followed closely by Waldo and Franklin counties, which both have more than five months, data from Maine Listings show.

Cumberland, Sagadahoc, York and Androscoggin counties, however, still have roughly two-months’ worth of inventory, which classifies them as being a seller’s market still. 

Median price

The price of housing can depend heavily on how strong the demand for properties in an area is. When demand rises, cost increases, especially when there are fewer options available. 

If there are plenty of houses to go around and not many people are interested in buying one, costs tend to shrink. 

The median sales price of a single-family house in Maine sat at $402,500 as of last month, according to Maine Listings. 

The price of an average home in Cumberland and York counties is much more at $580,000 and $525,000, respectively. Median house prices in Sagadahoc and Lincoln counties as of last month fell below $500,000, but still sat at $490,000 and $481,500, Maine Listings data show. 

Aroostook County, meanwhile, had the lowest median property cost at $167,500 as of last month, followed by Piscataquis County, where the average house will cost $220,000, according to Maine Listings data.

Average single family house prices in Somerset, Penobscot, Washington and Franklin counties hovered between $265,000 and $285,000. 

Average number of days on the market 

The average length of time a house sits on the market before changing hands can also show the demand for housing somewhere, as homes in competitive, desirable areas are going to be snatched up faster.  

Maine Listings data show that single family homes in Cumberland, Androscoggin, Sagadahoc and Kennebec counties will be on the market for two weeks or shorter on average before selling.  

That’s not far from the statewide average of 18 days, and an improvement from the summer of 2021, when homes were on the market for less than a week on average before selling. 

In Washington, Piscataquis and Somerset counties, properties are changing hands much more slowly. Homes are available for longer than 40 days on average before closing, Maine listings data show.