Luxury coastal home market is trending up
Courtesy / RE/MAX
A luxury coastal property in Kennebunkport.
PORTLAND — Sales of luxury coastal homes in southern Maine are picking up in pace and price, according to a new report by RE/MAX.
That finding reflects national market trends, said broker Don Wunder, one of the owners of RE/MAX Realty One, with five offices in southern Maine.
“Nationally, the market has recovered, especially in southern New England, which was a little ahead of Maine,” which is a secondary market and tends to follow the primary market elsewhere in New England, said Wunder. “Now Maine has caught up.”
Wunder evoked a picture of a typical customer in the market these days for a luxury coastal home in Maine.
“Say we have a buyer from Massachusetts who is looking for a second home along the coast of Maine,” he said. “They might not know where they want to be, from Kittery to Kennebunkport, but they know they want a second home, typically for their family to use and mostly in the summer season but also some in the off-season. They might have an eye toward retirement: maybe they’re here six months and six months somewhere warm. They’ve made the decision that this is where they want to be and it’s all about finding the perfect match.”
Wunder finds there are other trends: The demographic that can afford these homes appears to be growing. And customers are coming from far afield in search of a Maine home.
“They are coming from southern New England, from New York, New Jersey, even some California and Canadian buyers. They’ve always found the coast of Maine to be beautiful, and now they’re in the position to buy a second home,” he said. “The highest demand would be with a water view or water frontage. However, you can be in a coastal community but not right on the water. You might be within a short drive or bike ride or walk to the beach or to the water. Ogunquit is a classic example: Very few properties are on the water, but it’s a small town of four square miles and very sought after.”
What qualifies as a luxury home?
“Some people would call it anything north of a million dollars,” Wunder said. “In some communities it might be a little lower than that.”
Increases in median home prices don’t seem to be deterring buyers, Wunder said.
“Our inventory is shrinking,” he said. “In our coastal communities, there’s not a whole lot of land left to build, so while there’s some new building going on, it hasn’t been as prevalent as re-sales.”
Who are the sellers?
“They are also second homeowners,” he said. “They might have reached a retirement age where they no longer need or want multiple homes. They might be downsizing, or the family might have shrunk.”
Wunder noted that he’s seen this kind of activity only one other time in his career.
“If buyers are not buying now, they’re going to regret it, and I don’t say that lightly,” Wunder said. “In my 16 years, I can only remember one other time when I said it. We had a high-demand, lowering-inventory time period” before the recession. “I don’t think we’re hitting a bubble, but because of shrinking inventory if you’re not doing it now there’s going to be less next week, next month, next year.”
Issued July 18, the report finds significant growth in single-family luxury coastal home sales throughout the second quarter of 2016.
Second home trends
For coastal Maine, the report finds:
- Nearly all towns in coastal Maine have seen an increase in median price for luxury single-family homes.
- In Portland, the average number of days on market has dropped by more than 80% year over year, from 107 to 28 days, year-to-date between 2015 and 2016. Ogunquit’s average days on market in 2015 was 232, compared with 2016’s 59. But some communities, such as Kennebunk, saw an increase in the number of days on the market.
- Cape Elizabeth, York, Kennebunkport, Kennebunk, Ogunquit and Falmouth saw increases in median sale prices, ranging from 1.5% to 20%. Portland saw a 3.2% decrease in median sale price.
For New England in general:
- First-time and move-up buyers fuel the overall market.
- Homebuyers looking to start a family, purchase a vacation home or settle into retirement close to the water also drive rising sales.
- More than 50% of communities in these markets report an increase in median price.
- The volume of homes sold has risen, and the average number of days on the market has decreased.
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