Photo / Courtesy Vitalius Real Estate Group
Brit Vitalius
January 8, 2025
Outlook for southern Maine's multifamily market: a 'cautious pause'
By Brit Vitalius, Vitalius Real Estate
The multifamily market in Southern Maine, particularly in Portland, is continuing to slowly cool.
In Portland, top shelf owner-occupied multifamily homes are still getting "all the money" from discerning buyers who know what they want and can pay for it. But scrappy young investors have been hard to come by for properties in need of some TLC.
Where did the first-time buyers go now that properties are sitting on the market for a month or more?
In Portland, a revealing data point of the market shift is expired and/or withdrawn listings, which jumped from 18 to 42 over the last two years. We assume this mostly reflects sellers who don't "get their price" and choose to hold rather than sell.
Outside of Portland, buyers have much more interest in acquisitions and see value-add opportunities.
In 2024, my team saw many more buyers and strong offers on our multi-family listings in Lewiston, Biddeford and Brunswick than we did in Portland — a total reversal of the way the market has been for the last 20 years. Although the slowdown is not yet fully reflected in recent market data, the trend is clear.
Looking to 2025, persistently high interest rates and flattening rental rates will cause investors to do a sober assessment of values, potentially pushing prices down from their COVID peak.
In addition, the high cost of labor weighs heavily on buyers assessing properties with deferred maintenance owned by sellers hoping to sell at COVID-era prices. This tension may continue to play out in the form of unsold listings as buyers and sellers start to dig in on valuation.
On the positive side, southern Maine’s strong demand for housing and limited inventory will provide a buffer against significant declines. Greater Portland is still the place where the money goes and condo and home prices are holding up, indicating that people will still pay to live in this great region.
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