Maine home sales fell by more than 21% in May
Sales of single-family existing homes in Maine fell by a staggering 21.3% in May from a year earlier, nearly matching the most recent comparable one-year decline of 21.4% following the Great Recession, in June 2011.
The number of home sales in the state dropped from 1,598 in May 2019 to 1,257 last month, according to Maine Listings, which is owned by the Maine Association of Realtors.
Over the same period, the median sales price rose by 3.4% to $237,900. The median price indicates that half of homes sold for more money and half sold for less.
May's sales figures come on the heels of an April report that saw a 15.4% drop in sales from the same month a year earlier.
Since precautions aimed at halting the spread of COVID-19 infection took hold in March, showing homes has become more challenging and many would-be sellers have been hesitant to put their houses on the market.
"I'm definitely seeing a change," said Portland-based realtor Eric Flynn, a past president of the Greater Portland Board of Realtors. "We have boomers who want to downsize and millennials who don't want to buy a giant McMansion. Now they're competing for the three-bedroom, one-bath home and no one's building that. It's two massive population groups competing for the same thing."
Maine Listings said the number of single-family homes for sale in May was down 27.5% statewide compared with a year earlier. Since March, houses have sold 30% more quickly, according to Maine Listings, with 17 days being the average time on the market in May, down from 24 days in April.
Last year, Maine homes averaged 46 days in April and 20 days in May before going under contract.
Across the country, similar trends are playing out. In the Northeast, sales fell 29.9% from last May while prices rose 7.8% to $327,900, according to the National Association of Realtors. Nationally, sales dropped 24.8% and prices edged up to $287,700 over the same time frame, a rise of 2.4%.
Aoife O'Brien and her husband, Chris Cavanaugh, are currently renting a two-bedroom apartment in Brunswick and have been searching for a home to buy for more than a year. They have a 2-year-old son and are expecting a baby in late August. Because O'Brien works as a nurse midwife, they need to remain close to Mid Coast Hospital.
Five times they put offers on available homes, once even bidding 10% above the asking price.
"The closest we came," O'Brien said, "was second place."
Earlier this month, O'Brien had planned to take a break from the home search because she was beginning a 48-hour on-call weekend shift. Four houses in their price range came on the market. She tried to arrange showings for a Monday, but by Sunday night three of the four already were under contract.
"In the Brunswick area," she said, "anything that comes on the market and looks anywhere decent is under contract in 24 to 48 hours."
They recently reached an agreement to purchase a home in Brunswick Landing, however, and walked through the place in person Monday.
"The closing date is set for July 31 and the baby is due Aug. 28," O'Brien said. "Our hope is that we'll be in there and somewhat settled before this one arrives."
Marie Flaherty, past president of the Maine Association of Realtors and owner of the Flaherty Group, said this is a challenging time for first-time buyers because of growing demand and a low supply of available houses. She said multiple offers are commonplace in the more affordable price ranges, but she's also seeing some in higher price ranges.
Liz Grear and her husband, Alan Seabright, have lived and worked abroad and liked the flexibility of renting in case they wanted to travel or relocate.
"Now those options don't seem as appealing," Grear said. "Also, we want to have a yard because we can really only get together safely with friends outdoors."
The pandemic prompted them to start a home-buying journey in late May in Portland and South Portland. On their first day, they decided to bid on a modest home in South Portland and offered 7% over the asking price of $260,000. They didn't get the house.
"We asked if we could be a backup offer and the seller said, 'No, I don't want you to get your hopes up,'" Grear said. "We realized quickly that everything you see listed right now is way below what the seller will probably get for it."
Grear said she and her husband will continue to look, in part because interest rates for home loans are at historic lows, making monthly mortgage payments more affordable.
Home sales volume ranged widely around the state, with four counties (Washington, Sagadahoc, Oxford and Aroostook) seeing slight increases of up to 6.6% in March, April and May over the same three-month stretch of 2019. Lincoln County posted the sharpest decline, from 138 sales last year to 89 this year, a drop of 35.5%.
Fourteen of Maine's 16 counties saw median sale prices rise in the March-to-May window, with Franklin County posting a 40.8% increase to lead the way, from $125,000 to $176,00. Median sale prices fell 11.4% in Aroostook County (to $88,500) and 4.1% in Washington County (to $123,000).
Cumberland County home sales fell 17.7% over the same three-month period of 2019, while the median price rose a modest 6.3%, from $319,900 to $340,000.
"It's pretty robust in Greater Portland right now," said Ed Gardner, owner of Gardner Real Estate Group in Portland. "We're seeing probably a perfect storm for sellers right now, both in time on the market until under contract and also for keeping home values up."
Ray Nagel of Brunswick started looking for a new home in March with the thought that perhaps the pandemic might lead to bargain home prices.
"That was not the case," he said. "The process of selling was much easier. Buying was far more difficult."
Nagel eventually found a home in Falmouth and plans to move in later this summer. He listed his four-bedroom, two-bathroom home in Brunswick in early May, had a full-price cash offer the same day, and it went under contract the following day.
"Brunswick's a nice community and the school district here is very good," Nagel said, "but it surprised me that I got full price and I was under contract in 24 hours."