With rising interest rates and tight inventory, Maine’s residential real estate market is likely to see fewer transactions in 2023 than in the last three years. But mortgage rates might have peaked.
With rising interest rates and tight inventory, Maine’s residential real estate market is likely to see fewer transactions in 2023 than in the last three years.
“The big factor here is inventory,” says Dava Davin, owner of Falmouth-based Portside Real Estate Group, which has seven offices from Brunswick south to Portsmouth, N.H.
“It will remain excruciatingly tight in some markets. There may need to be more listings on the market to meet the continued demand in certain segments.”
Although mortgage rates remain significantly higher than the low rates that contributed to the buyer frenzy of recent years, the rates may have peaked, she says.
Nevertheless, she predicted, price appreciation will remain strong, perhaps with 3% to 5% annual appreciation, not the double-digit growth of recent years.
Some would-be sellers will likely stay in their homes longer.
“The reasons for moving during the COVID years are less prevalent,” she says. “Inflation is high, causing people to pause. We are seeing a more typical seasonal shift in the residential market. It could be a slower winter, but I predict things will pick up again in the spring of 2023.”
The overall outlook for 2023?
“We will see fewer homes trading, prices staying strong, and the market will continue to move swiftly due to low inventory,” Davin says. “Cream-puff listings and hot neighborhoods will continue to see bidding wars, while other areas will see a more balanced market than we have seen in recent years.”
