Report: Telecommuting boosts potential of residential market
Photo courtesy RE/MAX Shoreline
The coastal New England real estate market is hot, as exemplified by this
property on Munjoy Hill in Portland. Unit 1 at 33 Lafayette St. took just two weeks to sell for $360,000.
PORTLAND — Low interest rates, urban accessibility and confidence in the market continue to fuel the real estate market in coastal New England, including Portland, according to a new report.
The 2016 Fall Market Trends Report, released Oct. 12 by RE/MAX INTEGRA New England, says that rapid growth in single-family home and condo sales throughout Portland, Boston, Providence, R.I., and Portsmouth, N.H., is fueling expansion to surrounding markets.
In addition to low interest rates and buyer confidence, the report’s findings cited:
• Low inventory and strong demand are driving residential prices to an unprecedented high.
• As a result, overflow is creating a suburban swell in surrounding communities.
• First-time buyers, millennials and empty-nesters make up the majority of the market.
• Millennials are attracted to booming economic opportunity available in major New England cities.
• As baby boomers age and children move out, they are looking to downsize and move back into cities where walkability and urban living is more appealing.
In the greater Portland area, the median price point has increased by at least 3% across surveyed communities. Falmouth and Westbrook have experienced an increase in median price by over 15% year over year.
Derrick Buckspan, a Maine broker/owner with the agency, said telecommuting is boosting this trend. The ability to work remotely has attracted a large number of middle-aged buyers to the Portland area who drawn to living in the city center. At the same time, he said, demand has caused a swell into surrounding markets like Falmouth.
“We’re seeing a steady increase in people’s ability to maintain jobs in greater New England and are choosing Portland in particular for quality-of-life reasons,” Buckspan said. “Folks who are able to telecommute can be in Boston or New York a couple of days a week and in Portland the rest of the time.”
Buckspan said one of his clients runs a lab at MIT in Cambridge, Mass., but is also able to work at home in Portland or even on Amtrak when commuting. Another client who is based in New York bought a second home in the Portland area for retirement.
Ties to the state help drive real estate sales
In Maine, surge in demand stems in part both from people with ties to the state — e.g., they have family or have vacationed here — and folks who have discovered Maine, perhaps as a cruise ship passenger. People who come to Maine as tourists often like what they find here for lifestyle, so they’re looking for homes in Maine with the idea of combining telecommuting and physical commutes, he said.
Buyers are also attracted to lower property prices in Maine, said Buckspan.
“People can come from New York, for example, and buy waterfront,” he said. “They might still get a little sticker shock, but they still get better value than what they’re coming from.”
The generational nature of the trends is interesting, he said. That includes boomers who had a home in the suburbs and now tend to be downsizing and want to be closer to the conveniences of a downtown.
“Boomers are right-sizing, and they’re paying a premium for quality new construction,” he said.
Buying the boomers’ suburban homes is Generation X, the “move-up buyers,” said Buckspan. “They usually are ready to sell their first house and move up and buy more square footage. So there’s a sweet spot for them with the boomers downsizing.”
On the flip side, millennials are also coming into the market. National demographics for 2015 show that half of home sales were first-time buyers, Buckspan said. “And we’ll see a lot more millennials coming in,” he predicted. “What’s different with millennials is that they want move-in-ready homes. Their perception of doing work on a home, even painting, is that it’s outside their skill set and comfort zone.”
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