After a surprisingly strong year, with many transactions driven by the pandemic, the market for Maine properties is expected to be “vibrant.” But a lack of inventory could put a damper on it.
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The real estate market, specifically residential and industrial, is expected to stay hot in 2021, with demand exceeding inventory, brokers say.
Aaron Bolster, 2021 president of the Maine Association of Realtors, says low interest rates, fueled by Maine as “a safe place to escape from COVID-19,” will continue to fuel the trend. “Rural America has never looked so good,” he says.
Tom Landry, of Benchmark Real Estate agrees, “I’ve been referring to this being our ‘Brooklyn moment’.” The New York borough’s popularity increased for Manhattan residents after 9/11. Out-of-state buyers accounted for nearly 50% of the Portland area’s owner-occupied multi-family sales in 2020. “These folks have come in with cash and are creating bidding wars the likes we’ve never seen,” he says.
He says, with “another grim winter of case surges,” they’ll keep coming.
The biggest topic in 2021 will be inventory, Bolster and Landry both say.
“People are all consumers in nature, we purchase what is in front of us,” Bolster says. “If there is a lack of existing homes for sale, consumers can’t complete their goals to buy.”
Part of that is that some potential sellers are unwilling to list because of pandemic uncertainty. Bolster says brokers will have to get creative to help sellers who really want to sell, but can’t seem to find their “new place to call home.”
Landry says inventory is also an issue for multi-family property, with supply at a historic low of nearly 30%.
Another cooling element could be consumer trends, according to Bolster. “It’s crucial for the real estate market for the unemployment rate to decrease,” he says. But consumer confidence pre-pandemic was steady, and homeownership is still considered important, so with the COVID-19 vaccine rollout and things bouncing back, the market likely won’t take much of a hit, he says.
The industrial market was the other hot 2020 trend, and it will get hotter, says Justin Lamontagne, of NAI The Dunham Group. “The market proved resilient in 2020, in spite of the great challenges we all faced,” he says. “In fact, the sector projects stronger than ever, largely because of the challenges the pandemic has wrought.”
He says 2021 “should be a vibrant year” for industrial property as inventory is added, though slowly, and demand remains “from a variety of industrial end-users, many growing in direct response to pandemic related conditions.”
