Courtesy / ReMax Shoreline
The most expensive house in Maine to sell in 2020 was in Cape Porpoise, part of Kennebunkport, the state's hottest and most expensive town.
February 17, 2021
Inside Maine's hottest towns of 2020: 'It never lets up'
Courtesy / ReMax Shoreline
The most expensive spec home in Maine to sell in 2020 was this $5.95 million Cape Porpoise four-bedroom, bought by an out-of-stater, part of the 2020 trends of hot coastal property, rising prices, and interest from outside Maine.
By Maureen Milliken
It may be the dead cold of winter, but real estate sales are scorching a red-hot miles-wide swath along Maine's southern coast, with burning embers leaving their mark north and west of Portland.
Hyperbolic? Maybe. But the agents don't disagree.
Properties "are getting five, 10, 20, 30 offers," said Rob Edgerley, of Maine Life Real Estate Co. "The changes are pretty high, we haven't seen jumps like that (in amounts of transactions and prices) before."
Linda MacDonald, a Portland-area broker, agreed. 'This market is like no other we've ever seen," she said. "I've been doing this for 20 years and I've never seen anything like it."
Both of them told Mainebiz, "It never lets up."
Anyone paying attention to Maine real estate for the past 11 months already knows what the fuel is — pandemic flight, low inventory, low interest rates. The market was hot before the pandemic, but it's exploded since.
Edgerley for the past five years has put together the Maine's 10 hottest towns list, which ranks the towns and cities with more than 130 transactions that have had the biggest increases over the year before. In 2020, the increases were bigger, both in inventory and price. A lot bigger. In fact, things were so much bigger that for the first time ever, Edgerley did a Small Hottest Towns List, for those with less than 130 transactions.
Edgerley and his fellow number-cruncher Heather Compton, of Maine Life, released the Top 10 2020 Hottest Towns List earlier this month. But what's behind the list?
The pandemic in the room
The overarching trend of 2020's record year for single-home sales in Maine, both in volume and price, is the home-buying frenzy unleashed by the COVID-19 pandemic. While residents did some in-state moving, out-of-state buyers drove the market. Traditionally, about 22% of Maine home sales are to out-of-staters, a lot of that vacation homes. This year it was 35%, with a focus on primary homes.
"The trend in the last several years was to see people wanting not just second homes, but buying a primary home in Maine," MacDonald said. "COVID just put that on steroids."
Edgerley said, too, a lot of people are buying a vacation home that they plan to turn into a primary home when they retire. He said, overall, the demand far exceeds what's available, sparking bidding wars and sending prices skyrocketing. "We've had low inventory for years, and then COVID kicked that into high gear."
"We have people who just love the idea of Maine," he said. While that's always been true, "People are just flooding the area," because of Maine's relatively low COVID-19 numbers, lower prices than many states and the uptick in working from home.
Effects are ballooning prices, sleepy towns suddenly getting hot — hello, Lisbon! — and a new construction wave gaining traction. The biggest effect is on prices. The state's median in 2020 was $256,000, up 13.78% from 2019's $234,000. In No. 10 hot town Lisbon, the median price rose from $181,000 in 2019 to $213,500. In Auburn, the No. 7 town, it jumped 21.2%, from $163,725 to $198,500.
Photo / Maureen Milliken
Cape Elizabeth may not be on the Top 10 Hottest Towns list, but that's because it's so hot that little is available.
Lobsters, lighthouses and lots of money
The top five hot towns were on the coast — Kennebunkport, Kittery, Falmouth, Wells and Rockland — with Old Orchard Beach also on the list, at No. 9.
The highest median prices were on the southern coast, in York County.
No. 1 Kennebunkport had a median sales price of $657,000, up from $630,500. No. 2 Kittery, had a 43% increase in sales and a median price of $465,000, up from $422,000. Edgerley and MacDonald said that proximity to Boston boosts sales in the York County coastal towns, and nice beaches don't hurt.
MacDonald's firm, Linda MacDonald Associates - Legacy Properties, Sotheby's International Realty, of Portland, was the buyer's agent on a $5.9 million spec house in the Cape Porpoise village of Kennebunkport, the most expensive house sold in Maine in 2020, and listed by ReMax/Shoreline. The four-bedroom, four-bathroom 5,080-square-foot Marshall Point Road house is at the end of a peninsula on the Batson River estuary, nestled between the Goosefare Bay Wildlife Refuge and the wide-open expanse of the Atlantic Ocean.
It was custom-designed, with unobstructed waterfront views, a gourmet kitchen, first-floor master suite with another master suite on the second floor, as well as two en suite bedrooms. All the bedrooms have ocean views. It also has central air, radiant heat, a media room and more.
"We were involved in the highest sale in Falmouth, the highest sale in Cumberland," among others, she said.
The typical coastal buyer is someone with deep pockets who can either work from home or is done working for a living, is looking for new construction with state-of-the-art amenities, and possibly an anchorage for a boat. MacDonald said many buyers do their research first and come to Maine with an idea of what they want.
Buyers have always targeted the "coastal luxury towns" of Kennebunkport, Cape Elizabeth, Yarmouth, the foresides of Cumberland and Falmouth, she said. "Many dream of living in Maine, and they definitely all want to be near the ocean, if not on it."
Edgerley said he gets a lot of buyers who want Falmouth, Cumberland or perennial favorite Cape Elizabeth. "But [those towns] just don't have the inventory."
The buyers who can afford to, build. "There's a lot of cash in place," he said. "Or people are using a line of credit to buy."
Photo / Maureen Milliken
Gardiner was one of the top 10 "small hottest towns" in 2020, with 44% home sales growth.
Small towns and spokes
There is a second track of buyers who move to Maine, but can't afford to live on the coast or in a Portland suburb.
That explains dark-horse Lisbon, 10th on the list. The 9,000-person Androscoggin County town, which includes the village of Lisbon Falls, is a short drive east from Lewiston-Auburn, a quick hop to Freeport and, though it's not on the Maine Turnpike or Interstate 295, about half an hour from Portland.
Lisbon had 131 transactions in 2020, up from 115 in 2019. The median price was a relatively sweet $213,500. "It's the only place in that area you're going to find that price point," Edgerley said.
While Lisbon is a river town that's actively working on economic development, Edgerley thinks its popularity was because "it happened to be there" and had houses for sale.
Other towns, including small-list No. 3 Gardiner, and its hot bigger compatriots Auburn (No. 7) and Gray (No. 8) are "spoke towns" — those with a highway or fast two-lane that make an easy direct commute to Portland.
Though the spokes from the hub are growing longer every year, "If you work in Portland, but don't have to commute every day, maybe commute two days a week, you can find a place for a lot less" that's still not a bad drive, Edgerley said.
Gardiner, with 44% growth, is an up-and-comer, he predicts. The cute Kennebec River town with a classic brick and happening downtown is a 45-minute drive from Portland on I-295 and a 10-minute drive south from Augusta. The $184,900 median sales price is just a sliver of closest big hot town, Falmouth (No. 3), half an hour down I-295, where the median price last year was $580,000.
Towns on the small list are, in order, Lincoln, Caribou, Gardiner, Presque Isle, Belfast, Raymond, South Berwick, Bethel, Old Town and Camden.
They fall into a variety of categories. Lincoln, a Penobscot County 50 minutes north of Bangor, had 58% transaction growth. Caribou and Presque Isle had 45% and 44%, respectively. Lincoln's median home price was $130,000, Caribou's $115,000 and Presque Isle's $121,000. Edgerley speculated the sales are for second homes, similar to a spike in 2019 in Piscataquis County, where brokers said out-of-staters were buying up cheap in-town homes to use as snowmobile and hunting base camps.
Brewer (No. 6) didn't surprise Edgerley. Like last year's No. 1, Hampden, it's part of the greater Bangor area. Ditto for Old Town, No. 9 on the small towns list. The inventory gets sucked up, the town falls off the list, and another one in the area takes its place.
Raymond, on Sebago Lake; Bethel, in the western mountains; and upper mid-coast Camden and Belfast are classic vacation spots, where some longtime vacationers are now staying for good.
Photo / Maureen Milliken
Construction of homes was up in 2020 and will continue this year, including at Scarborough Downs, which was on the 2019 hottest towns list and is poised to make an appearance on the 2021 one.
Construction picking up
Home construction has lagged in the past decade, at first because of wariness after the housing crash of the Great Recession, more recently because of workforce gaps and, in 2020, COVID-19 slowdowns.
But it's picking up, and it shows in some of the hot towns.
"New construction is one of the market segments that is the hottest it's been in years," MacDonald said. She said she's also seeing more tear-downs of older homes to be replaced with something new and more efficient.
In No. 5 Wells, 43 out of 478 transactions were 2020 construction and another 21 were built in 2019. The overall number of transactions was up 20.7% from 2019. The median price in Wells last year was $355,000, up from $299,900.
As Edgerley sifts through the data during a Zoom interview with Mainebiz, he points out a 1,400-square-foot Wells new build that sold for more than $400,000. "That was a cash sale," he said.
He expects to see towns that have ongoing construction back on the list next year. In Scarborough, for instance, where the Downs development will have 500 homes once it's completed, two more residential phases close this year.
Then there are place like Auburn, that have huge swaths of open land ripe for construction and the city has launched a robust economic development focus. "It's a nice town and people are seeing that," he said.
Photo / Maureen Milliken
Auburn was one of the 10 hottest towns for real estate transactions in 2020, popular because of proximity to the Maine Turnpike and 30 minutes from Portland, an abundance of space and a city focused on economic development. Pictured, Festival Plaza on Main Street.
Who are the buyers?
Edgerley said the two age groups he sees the most of are older millennials who can work remotely, and retirees.
The millennial buyers "want the Maine lifestyle." he said. They can work anywhere, and they want to do it in Maine. Retirees tend to be Mainers changing house, some returning to the state and others who have vacationed here and now want to live here.
Both he and MacDonald said they've always had buyers from Massachusetts, Connecticut and New York, and those buyers are still coming. But they've got competition.
"They're from everywhere," he said, including states he's never seen buyers from before.
MacDonald said there's been an influx from D.C., Maryland and the Carolinas "looking for a lifestyle change." Maine is more affordable, has an appealing culture, is laid-back and has a variety of clean natural resources.
Another thing about the 2020 buyers that MacDonald has noticed — they're friendly and easy to do business with.
"Maine's a pretty great place to be," she said. "And most of the people who want [Maine's lifestyle] seem to be pretty great. They're seeking out Maine for a reason."
Photo / Maureen Milliken
More Kennebec River towns, like Gardiner, will be hot this year, Rob Edgerley predicts.
Predictions for 2021
Edgerley was spot-on last year with some predictions, including tighter inventory and continuing overall hotness. One thing he didn't predict when he spoke to Mainebiz in February was the pandemic effect.
While things "just haven't let up," lack of inventory means "it's going to be an interesting year." That said, buyers will "continue to find pockets," like they did in 2020 with Lisbon. "And then they'll fill them up.
Some other predictions:
- Hotness will continue along the Maine Turnpike and I-295 corridors, as Portland-area house buyers continue to squeeze north and west to find something they can afford.
- Some previous hot towns will be back, including Gorham and Scarborough.
- Some new towns on the list will be Durham (adjacent to Lisbon), the Belgrade Lakes region, depending on inventory; Kennebec River towns like Richmond and Farmingdale; and two he's predicted before — West Bath and Harpswell.
- The Rangeley area will have more action with Saddleback Mountain open after being closed for five years.
- Small jumps are more likely than 2020's huge ones
Edgerley said broadband access will play a big part of which area's catch on, and not just with people who want to work remotely. "It's more and more important. People need that connectivity."
Though MacDonald said that even spotty broadband can be overcome if the buyer's desire to live in Maine is strong enough. She sold a $4.2 million home on the Kennebec River in Georgetown, a coastal peninsula with notoriously balky broadband.
"They found a way to get it done," she said.
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Anonymous
March 1, 2021
I'm sorry to hear that Waterville hasn't yet been discovered. Home to Colby and Thomas Colleges and multiple health care facilities, the prices are relatively low and would appeal to alumni of both colleges and retirees who need hospitals and good doctors close by. The downtown is being rejuvenated (brand new boutique Lockwood Hotel just opened) and other new renovation across the street, Maine Film Center to open, restaurants and a dormitory in-town to supply hungry customers, a fun river walk and farmers' market in summer....
Anonymous
February 18, 2021
What about Naples and Bridgton?
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