Photo / Maureen Milliken
Even if it's not actually Golden Pond, Belgrade Lakes Region house buyers are looking for the "On Golden Pond" experience, brokers say. Pictured is Long Pond in Belgrade Lakes village.
May 19, 2021
Belgrade Lakes Region's residential market feeding frenzy won't slow
Photo / Maureen Milliken
Dan McCarron, of Lakepoint Real Estate, in Belgrade Lakes, like many area brokers, is dealing with a frenzied residential market in the northwestern Kennebec County Belgrade Lakes Region.
By Maureen Milliken
The Belgrade Lakes Region has long been a summer haven for out-of-staters — an area in northwestern Kennebec County dotted by quaint postcard-cute New England towns surrounded by dozens of lakes.
So it's no surprise that the area, like much of Maine, is in the midst of a residential real estate frenzy. The draw of the lakes and small towns has always been a lure, but now the market for both second homes and primary ones has exploded, driven by urban pandemic flight.
While the lakes look as placid as ever, with loons skimming effortlessly across the water, underneath the surface there is a home-buying feeding frenzy.
"Be prepared to make an offer," said Dan McCarron, designated broker at Lakepoint Real Estate in Belgrade Lakes. "If something decent is on the market, it's literally gone in a day." That compares to the 50 or 60 days area homes, even waterfront, were on the market pre-pandemic.
Liz Fontaine, of Lakehome Group, also in Belgrade Lakes, agreed. "You have to be ready to make a move," she said. "75% of what we list is under contract in a few days, and some are under contract in 24 hours."
Like much of Maine, the demand is being driven by out-of-state buyers in pandemic flight from more urban areas of the country. Out-of-staters used to be 30% to 40% of McCarron's clients. "By the end of last year it was 70%, and it's probably more than that now," he said as he sat at a picnic table next to the lake in Belgrade Lakes village this week..
Half a mile south on Main Street, Lakehome Group has a sign outside touting $52 million in sales last year, a record for the four-agent firm. "We're seeing a lot of that from out of state," said Fontaine, owner-broker.
Dawn Klein, owner and designated broker at Lakehome Group, said that some out-of-staters have even moved here before finding a place and are renting.
"They're just waiting to win the multiple offer situation," Klein said. "We have a pipeline of lakefront buyers just waiting for the right property to get listed."
The 'On Golden Pond' experience
While the story is similar all over Maine, in the Lakes Region the good news/bad news aspects are magnified.
The good news is that the area, just north and west of Augusta, is exactly the kind of place people are looking for when they think of escaping to Maine.
The bad news is, lack of inventory, always acute, is even greater when people want a place in central Maine, which is more rural, less populated and has fewer housing options than more urban areas of the state.
In May 2019, there were 649 residential single-family home listings in Kennebec County; there were 408 in May 2020. Currently there are 154. Narrow that down to waterfront inventory and it goes from 202 in May 2019 to 129 in May 2020 to 37 now.
"Right now the biggest request is 'give me waterfront with year-round access and internet,'" McCarron said.
"Everyone wants that 'On Golden Pond' experience," he said, referring to the movie starring Jane and Henry Fonda. It was filmed in New Hampshire, but based on writer Ernest Thompson's experiences on Great Pond, which is surrounded by Belgrade, Oakland and Rome. "They want the mailboat, they want to know where they can dock and dine. It exists, but not for everyone."
The three largest lakes in the region are Great Pond, Long Pond and Messalonskee, all three of which have Belgrade waterfront. Dozens of other lakes also dot the region. Waterfront property is available, but not with all the bells and whistles people hope for.
Aside from the "Golden Pond" experience, the more realistic number one must-have is internet, McCarron and Fontaine said.
"They want great internet, high-speed, with an extra bedroom for an office," Fontaine said. That's followed by extras space for a home gym, another trend spurred by the pandemic.
The Lakes Region also has issues the state's more urban areas don't. Few of the Lakes Region towns have public sewer systems, and septic system inspections can be particularly rigorous given proximity to the lakes. Most of the towns also have shoreland zoning ordinances that have strict building limits for property close to lakes.
"There are a lot more moving parts in this area," McCarron said.
Given that and the difficulty in snagging a house, he said, "People love being here, but they hate what they have to do to get here."
Image / Zillow
An image from home sales online platform Zillow shows recent homes sold in the Belgrade Lakes Region.
Lakes by the numbers
The upside is, Fontaine said, people who have been shopping around in the Portland area, particularly the Sebago Lake region in western Cumberland County, will find lower prices in the Belgrade Lakes Region. The March median sales price in Cumberland County, the most recent available, was $380,000; in Kennebec County, it was $213,500.
Which isn't to say that the prices aren't rising. Single-family home sales are up 25% over last year in Kennebec County, and waterfront sales are up 41%, with median price up 32% and 28%, respectively. Out-of-state buyers so far in 2021 have made up 47% of waterfront purchases versus 32% last year, according to Maine Listing Service.
In 2021, 78% of sold homes went for above the asking price. When the price goes up, the out-of-staters are in the majority — 64% of waterfront purchases over $500,000 so far this year have been by were by out-of-staters. Last year, it was 42%.
Some of the major elements of the deal in the pandemic era are:
Escalation clause. A buyer makes an offer above asking, but also has a maximum that kicks in if others make offers higher than the initial one. For example, a buyer may offer $475,000 on a $450,000 house, but the escalation clause will go as high as $525,000, like an auction. "They've been around for a while, but we never needed them before," McCarron said.
Mortgage preapproval and prequalification. While it was always a good idea, pandemic-era deals aren't successful without it. "If you're preapproved for financing, you're ready to buy, and you have to be ready to make a move," Fontaine said. McCarron said, "We prequalify everyone, there are no tire-kickers anymore."
Cash buyers. Preapproval and prequalification are even more vital because of the huge number of people with the cash to buy the house outright, with no mortgage. McCarron said that even if a cash offer is lower than a financed one, a buyer with multiple offers may be inclined to take it. "The cleanest offer is often better than the highest offer," he said.
Renovation option not great. While some buyers are settling for the not-perfect home with a plan to renovate or tear it down and rebuild, the overburdened construction industry isn't ready for them yet and they'll have to have a lot of patience. Contractors booking as much as a year and a half or more in advance. If the house needs work, "You're going to have to live with it for a while," Fontaine said.
Photo / Maureen Milliken
Mount Vernon is one of the off-the-beaten-track Lakes Region towns benefiting from the increase in buyers.
Little lakes, big interest
Fontaine said about half of her clients are buying year-round homes, with the other half buying vacation homes. But, like everything else, there's a pandemic twist. Buyers want a vacation home that can be used year-round in case they want to get away, or live in the area full-time.
The squeeze on the traditional hotspots in the Lakes Region like Belgrade, Rome and Oakland, has been a boost for some of the more out-of-the-way towns.
"People care less about what lake they're on than they used to," McCarron said. "It's always been 'Belgrade Lake' — Great Pond, Long Pond and Messalonskee, but now it's branching out to places like Manchester, Mount Vernon, Fayette."
Mount Vernon, just west of Belgrade and a little north of Augusta, is a town that's getting a lot of looks. It has a postcard-cute village on tiny Minnehonk Lake, and is also surrounded by larger Long Pond, Echo Lake and Parker Pond, as well as a variety of smaller lakes. It's considered "remote," because there's no straight road that goes to it from Augusta, like Belgrade or other bigger towns.
McCarron said towns like Mount Vernon and Vienna, to its north, used to be thought of more as seasonal camp or fishing spots. "Now they're benefiting from the market."
"People love Readfield," Fontaine said. It's on Maranacook Lake, northwest of Augusta on Route 17. "They say 'find me a home in Readfield!' Any of the towns with that quaint feeling is something people are looking at," she said.
Photo / Maureen Milliken
Lakehome Group real estate in Belgrade Lakes, with four agents, had a record $52 million in sales in 2020 as Belgrade Lakes Region residential real estate boomed.
The home-lake advantage
McCarron and Fontaine said, given the quirkiness of the region and different personalities of the towns, local knowledge comes in handy. Helping prepare buyers to jump on a listing and all the detail work involved in that is something they're good at, too.
"We are a resort area," Fontaine said. They're used to gauging what type of experience buyers are looking for, and knowing where it might be among the dozens of lakes.
McCarron pointed out that most of the brokers in the area are small independent ones who have been doing business in the Lakes Region for years.
"You have to know the ins and outs of the area," he said. "It's a very unique market." He said that he wouldn't recommend anyone jump in without a broker.
Both he and Fontaine said that they and their fellow local brokers are on top of listings before they even hit the market, an advantage someone who's looking on Zillow or some other online platform isn't going to have.
Fontaine said she knows what both her buying clients and selling ones are looking for, and also is aware of sellers who are thinking of listing and which buyers may match up.
She's heard since last year that the market isn't sustainable — lack of inventory will catch up to it, and interest rates will likely rise. "They say it isn't going to last much longer, but here we are and it's still going," she said.
McCarron acknowledged that there may come a time when the Golden Pond effect gets a little old for new Mainers who are used to big-city life — when they realize Instacart and Door Dash don't deliver to their town, that the nearest pizza may be a 30-minute or more drive away, that the country store closes at 8 p.m. and they have to bring their own rubbish to the dump. But he hasn't seen it yet.
"We're still in the honeymoon phase," he said.
He said that when the pandemic began more than a year ago, he thought the market would be dead. "But it exploded and it hasn't stopped."
Like Fontaine, he isn't sure what the future will hold. "But I know one thing," he said. "It's going to be a fun summer."
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Anonymous
June 25, 2021
Staying here for a week (From Nashua NH) during July 4 in a cottage that somebody cancelled on. I have been afraid because of the caterpillars, which have caused nearby Waterville to declare a state of emergency. I will stay out of the woods but in the water I hope and enjoy the town of the oddly named "Belgrade Lakes".
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