Rising interest rates cool home sales in Maine, but prices continue to climb
File photo / Laurie Schreiber
The housing market in Maine is beginning to feel the effects of rising interest rates.
The housing market in Maine is beginning to feel the effects of rising interest rates.
Sales of single-family existing homes declined 9.83% last month, according to Maine Listings.
But the statewide median sales price hit $360,825 in June — an increase of 16.4% compared to June 2021.
The median sales price is the amount at which half of the homes sold for more and half sold for less.
“Discussions with Realtors across Maine indicate that some are experiencing a ‘pause’ in their market areas,” Madeleine Hill, Maine Association of Realtors president and a designated broker at Roxanne York Real Estate in Harpswell, said in a news release.
“We are beginning to see homes staying on the market for weeks instead of days, price adjustments and fewer buyers competing for new for-sale listings as rising mortgage interest rates have cooled some segments of buyer demand.”
Statewide, the for-sale inventory of single-family properties remains historically low with 1.8 months of supply, she said.
“A six-month supply is considered a balanced market,” she added.
Nationally, sales fell 12.8% in a comparison of June 2022 to June 2021. The National Association of Realtors reported a national MSP of $423,300 for June — an increase of 13.3%.
Sales in the Northeast decreased 11.8% while the regional MSP of $453,300 represents a rise of 10.1% from June 2022 to June 2021.
“The ‘pause’ Maine is experiencing may indicate a lag between seller expectations and buyer purchasing behavior, and we expect the market to adjust to these shifting dynamics,” said Hill. “Nearly 1,800 families found their opportunity and bought a home in Maine during June — the seventh-best June since we began record-keeping 21 years ago.”
Portland home market
In Portland, the home market cooled in the first half of 2022 ahead of the June interest rate hikes. More cooling could come in sync with rate hikes, said Tom Landry, owner of Benchmark Real Estate in Portland.
Landry said higher interest rates have resulted in less competition for homes, which in turn has meant buyers are able to ask for price reductions.
However, he noted that continued low inventory and ongoing demand from out-of-state buyers continue to create an advantage for sellers.
He added, “People still need to buy and sell regardless of interest rates, southern Maine has become a popular place to move to, and our market is seeing more cash buyers than ever before.”
Single-family home prices in Portland increased 3% with the median price per square foot up by nearly 16%. The value for two- to four-unit multifamily properties increased 7% from $644,500 to $690,500.
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