Photo / courtesy, F.O. Bailey Real Estate
Updated: May 2, 2022
Focus on Real Estate/Construction/Design
The Maine Housing Crunch: Multifamily housing market remains heated
Photo / Tim Greenway
Thomas Gadbois of F.O. Bailey Real Estate, outside of a property on Morning Street in Portland that he listed and sold several times. He says tight multifamily inventory is resulting in a buyer frenzy in some cases.
The multifamily market, which can range from two-family homes to apartment buildings, is considered a key piece of the housing market.
Worker housing and affordable housing are often part of that market.
The multifamily market is hot, and while the buyers differ from other markets, the competition is keen.
“It’s still heated and low inventory is still the defining characteristic of the market,” says Brit Vitalius, owner of Vitalius Real Estate in Portland.
Two- to four-units are the hottest pricewise and the most in demand, primarily by owner-occupants, he says.
Larger buildings are also in high demand by investors, but Portland’s year-old rent control ordinance has dampened the demand there, he says.
“We’re seeing investors looking to be anywhere but Portland. But there just aren’t as many big buildings in other towns,” he says. “Buyers are trying to dig stuff up off-market.”
A different buyer
On the more extreme end of the market was the buyer demand shown for a three-unit at 40 Brackett St. on Portland’s West End. Listed at $599,000, it generated 70 showings and 20 offers, and sold for $700,000.
More typical was 19 Salem St., a three-unit building in Portland that listed for $829,000. It attracted 20 showings. Although there were no offers in the first two weeks, it eventually went under contract.
“We’re suggesting that single-family buyers go look at multifamily properties. That market is less competitive,” says Vitalius. “You don't need to be a cash buyer and you’re not competing with 20 others. In this market, first-time buyers are practically unable to buy a house, but they can buy a two-unit.”
“The prices keep amazing me,” says Thomas Gadbois of F.O. Bailey Real Estate.
Gadbois has brokered some record-setters, including 24 State St. in Biddeford, a 42-unit apartment complex that sold in late 2020 for $5.45 million just over year after it sold for $3.6 million.
Around the same time, a tract of 21 duplexes at 14-70 Dusty Rhoades Lane in Windham sold to a San Francisco investor for $9 million. The deal was an indication that investors are looking at areas besides Portland, notes Gadbois.
Both were off-market deals.
“Inventory is an issue. It’s tight,” he says. “I spend half my time trying to find off-market deals.”
Things remain tight and there’s a fair amount of churn.
Gadbois brokered three of the four turnovers of 27 Morning St., a six-unit in Portland that doubled in value from 2014 to 2021, going from $740,000 to $1.55 million. He’s twice brokered 100 Congress St. in Portland. In 2018, the building, with two apartments and two retail units, went for $930,000 to an investor. It listed early this year for $1.6 million and went under contract for what Gadbois says is expected to be another record deal.
“The price is very close to asking,” he says. “Just shows that investors are still willing to pay top dollar.”
In early April, Gadbois brokered the sale of a four-unit at 14 Dunning St. in Brunswick. The century-old structure listed for $625,000, received about 10 offers and sold for $703,000.
“It was on the market for less than a week,” says Gadbois. “It’s a frenzy.”
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