Presenting Our April 2023 Real Estate Spotlight: “Maine’s Outlook for More Inventory and Stable Prices”
Read the newest volume of Real Estate Spotlight to see Chris Lynch’s current market analysis on Maine’s outlook for more inventory and stables prices and browse the latest extraordinary homes for sale in Maine.
Maine’s Outlook for More Inventory and Stable Prices
The Maine Association of Realtors recently released their monthly market report, which revealed a nearly 17% drop in the number of single-family homes sold in March 2023 compared to March 2022. Tightening inventory continues to drive further increases in the median sales price, which rose by 3.85% over the same period. The basic trends that have been in place for several months are still driving the market dynamics. It is interesting to note that, in our opinion, the median home sale price increase is relatively modest in the face of a significant double-digit decrease in inventory and home sales volume.
By comparison, the National Association of Realtors recently reported figures for the US and the Northeast region. In both cases, the decline in unit volume was more than 20%. Nationally, median home sale prices declined by 1.4%, while prices actually posted a modest increase of 1% for the Northeast region.
The impact of tight inventory, both on buyers and Legacy Properties Sotheby’s International Realty as a company, has been met with a broadening of the geographic scope when searching for homes. The map below shows all of the locations in which we have represented buyers and sellers over the past three years. As demand expanded north and west from our traditional markets, we added specialists who have expertise in lake properties, hunting and fishing camps, skiing locations, and traditional home sales in many of the beautiful cities and towns that are attracting more buyers and have more homes for sale. We have now sold properties in more than 200 cities and towns in recent years. This astounding accomplishment has been a very satisfying reallocation of our brokerage resources to meet the current market challenges and needs.
The other takeaway from the national, regional, and local market statistics presented above is that Maine has been resilient to price declines. However, I caution that we are also at a pivotal point in the real estate cycle, which will be extremely sensitive to even a modest increase in inventory. Historically, Maine has lagged the Northeast both on the way up and on the way down, and I see no reason for that not to be the case in this cycle. It is fair to say that low single-digit price increases in Maine’s median sales price are likely to be sustained for the next several months. Of course, economic conditions such as inflation, the money supply, interest rates, and state and federal programs will continue to be the most influential factors driving the longer-term outlook for inventory and prices.
Maine is a relatively small state that is currently enjoying very strong demand for homes and not nearly enough homes for sale. While there may be a softening in the rate at which median home prices increase, it is very hard to imagine a scenario in which prices decline in any meaningful way. The backdrop in today’s market is certainly more healthy for both buyers and sellers than at any time since the onset of the COVID-19 pandemic. It appears that we are on a path to a better balance of buyers and sellers with more homes coming to the market combined with a stabilization in home prices.
We look forward to serving your real estate needs, regardless of where your search takes you.
Happy Spring,
Chris
