MEREDA 2025: Value of Maine homes sold last year totaled $7.2B

Photo / Peter Van Allen The MEREDA residential and multifamily outlook panel included, from left, Elise Kiely of Legacy Properties Sotheby's International Realty; Brit Vitalius of Vitalius Real Estate Group; John Laliberte of Reveler Development; and moderator Paul Peck of Drummond & Drummond, LWS Development.

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By Peter Van Allen

In Maine's housing market, to borrow a phrase from Gordon Gekko the 1987 film "Wall Street," cash is king.

As Maine has seen in the housing market in the past five years, demand from the top of the market — including from cash buyers — has intensified the demand for housing at all levels.

With tight inventory and median home prices at historic highs — and bidding wars still being waged over move-in ready homes — the home hunters with the upper hand are holding cash.

That was the message from the residential segment of Thursday’s MEREDA conference.

“Luxury buyers are driving the market. Cash and high-end buyers are driving all the markets,” said Elise Kiely, a broker at Legacy Properties Sotheby’s International Realty, which has an office in Portland.

Cash buyers are not affected by higher interest rates, and they can quickly change the dynamic of a bidding war by bypassing the usual delays with getting financing or finding a home inspector. It's not uncommon for a buyer to pay cash without ever having stepped foot in the home.

Last year, Maine brokers sold 237 houses for $2 million or more. In 2019, the number was 59 houses.

Many luxury buyers want a "signature property" that will be an attractive gathering spot for children and grandchildren, she said.

When cash buyers see something they like, "they strike fast," Kiely said.

Luxury buyers are driving up the value of the overall housing market.

Maine’s residential housing market had sales totaling a record $7.2 billion last year, up from $6.4 billion in 2023, Kiely said, citing numbers from Maine Listings. Before the pandemic, in 2019, the figure was $5.1 billion.

Maine’s median sales price has been in the $380,000 range in recent months (compared to $225,000 in 2019), but the top-down pressure of the luxury market affects all housing markets, Kiely said.

She said she had a young couple that had hoped the market would come back to earth after the pandemic. But that never happened.

"There's been no COVID crash," she said. "It's harder and harder for first-timers to get into the market. This group is locked out."

Who are the buyers?

One key segment, Kiely said, is what she calls the LENS buyers, or luxury empty nesters.

They’re often coming to her with a budget. She gave the example of a couple that came to her with a $3 million budget. They said they wanted to be near a marina where they could keep their boat. If they were near a golf course and other amenities so much the better. They wanted something that was move-in ready.

A key selling point is having a house that would be an attractive gathering place for children and grandchildren.

But, even with that budget, the buyers had a hard time locating the house that fit their dreams.

The husband said, if a house couldn’t be found right away, “we’ll go rent for a year in Europe and ski.”

Downhill or Nordic ski? Kiely asked the client.

“No,” the prospective buyer said. “Spend our kids' inheritance.”

The couple eventually found a house and exceeded the initial budget by $2 million, paying $5 million for their dream house. They bought it sight unseen.