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Updated: June 22, 2022

Home sale prices up nearly 15% across Maine, but Portland sales show signs of cooling

house with black siding Courtesy / ReMax By The Bay Listed by ReMax By The Bay, May’s priciest single-family sale in Portland was 29 Oregon St., which went for $1.475 million, according to Maine Real Estate Information System Inc.
By Laurie Schreiber

Home values statewide remain high, while for-sale inventory remains a limiting factor for those seeking to purchase single-family existing homes in Maine. 

But the latest data for Portland suggest this could be the beginning of the end for the city’s historic run-up in real estate prices.

State

According to Maine Listings, the median sales price statewide reached $350,000 in May — an increase of 14.75% over the median in May 2021. 

The MSP is the price at which half of the homes sold for more and half sold for less. 

The number of sales statewide fell 11.97% in May 2022, compared to May 2021.

“While still historically low, during March, April and May of 2022 we have experienced small gains in the number of homes for sale across Maine,” Madeleine Hill, 2022 president of the Maine Association of Realtors and a designated broker at Roxanne York Real Estate in Harpswell, said in a news release.

“Some of that gain is our typical spring home selling seasonal increase, but we’re also seeing home buying demand impacted by rising mortgage interest rates and home price appreciation,” she added.

Nationally, there was a sales decline of 7.7% in May 2022 compared to May 2021, while prices rose 14.6% to a national MSP of $414,200, according to the National Association of Realtors. 

Regionally, May 2022 sales in the Northeast eased 9.3% and the regional MSP of $409,700 represented a 6.7% rise in prices compared to May 2021,

“As sellers and buyers adjust, time will tell if we are transitioning to a more balanced market with slower price growth and less buyer competition for for-sale inventory,” said Hill.

Portland

For the city of Portland, May real estate sales statistics suggested a cooling market with prices and volumes trending down from the same month in 2021 and from this past April, according to a separate release.

Tom Landry of Benchmark Real Estate in Portland attributed the trend to inflation, increased interest rates, fears of a recession and geopolitical strife.

“Across all sectors of the Portland market, we continue to see a drop in sale prices, number of sales and sales volume,” he said. 

The data show that overall prices are leveling off from the highs of 2021.

But there has been no measurable change in days on market and price per square foot is up an overall 14% when compared to a year ago. 

Comparing May 2022 to one month prior, the numbers show a downward trend in prices, too. 

Landry said Portland could continue to see a leveling off as fewer people flee the cities as the pandemic subsides and interest rates rise. 

But, he added, “we have to remember that our prices increased over 50% in one year toward the middle of the pandemic, and while we are now seeing a downward trend in 2022, we don’t expect to see a crash.”

According to statistics prepared by Benchmark Real Estate using data from Maine Listings:

• Single-family prices are down 4% and the number of sales is down 26% from the highs of 2021. 

• But median price per square foot went from $300 in 2021 to $333 in 2022. 

• May versus April 2022 shows a larger drop in median sales prices coupled with a small drop in listings and a leveling of price per square foot. 

• Year-over-year condo data show a cooling market with drops almost across the board. 

• But median condo prices per square foot jumped nearly 20% from $430 to $514. 

big buildings and arch
Courtesy / Legacy Sotheby’s International Realty
Listed by Legacy Sotheby’s International Realty, May’s highest condominium sale in Portland was Chandlers Wharf’s Unit No. 108, which went for $1 million, according to Maine Real Estate Information System Inc.

• Condos show a large increase in price per square foot from $479 to $514 over the past month.

• Data from multi-unit buildings with four units or less show most continue to sell for higher prices. 

• The median price per building increased 11% from May 2021 to May 2022, from $675,000 to $752,500. 

• The median price per unit was up by 12% and days on market down by 40%. 

• Strong results for smaller multi-families signals that they are alternatives for owner-occupied buyers who would otherwise look at single-families and condos.

“May continues to show a market that is leveling off, with both price stabilization and potential for further declines in prices and sales, said Landry, who noted the May statistics don’t capture June’s increase in consumer interest rates. 

“With rates nearly doubling from 3% to 6% in just a few months, I fully anticipate a more significant than normal summer slowdown,” he said.

Higher rates could many buyers out of the market and result in a significant increase in supply, thus ending the largest increase in values ever seen in Portland and resulting in a buyer’s market later this year, he said.

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