Maine's real estate sector continues to outpace last year's performance, but slowed in recent months.
The Maine Real Estate & Development Association, which held its spring meeting in Portland on Tuesday, told several hundred participants that the MEREDA Index stood at 91, dropping from a peak 2015 rating of 110. The index has risen 5.2% in the past year, but only 1% in the past six months, MEREDA reported. Residential growth, including sales of existing homes and new mortgage originations, helped set the pace.
The previous index was bolstered by the sale of three commercial properties. Those sales bumped the index to levels unseen since 2006-07. The index climbed as high as 110 in the past year, after two years when the index dropped as low as 80.
"While the MEREDA Index appears to have dropped from the previous two releases, that relates to the effect of the three large transactions — One and Two Portland Square and 100 Middle St., all in Portland — primarily felt in the commercial component of the Index and, more specifically, square footage sold. However, the actual dip in commercial, exclusive of these very large sales, was small. The residential component was a primary positive driver; sales of existing homes and new mortgage originations both saw strong increasing trends," Michael O'Reilly, MEREDA's president, said in a prepared statement.
"The lack of existing housing stock is driving demand for new residential construction in both the single family and condominium market," said O'Reilly, who is a senior vice president at Bangor Savings Bank. "While the construction industry continues to deal with a workforce shortage, the construction component of the Index is exhibiting a gradual rise."
Drew Sigfridson, managing director and partner at CBRE|The Boulos Co., reported that there continues to be "tremendous demand for investment product, but there is a leveling out of pricing." Commercial tenants are paying top dollar for "good quality properties," he added, but lesser quality spaces are still seeing prolonged vacancies.
Data is collected from the Maine Association of Realtors, CBRE|The Boulos Co., the Maine Department of Labor, the Mortgage Bankers Association, the U.S. Census and Moody's Analytics.
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