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The number of building permits issued in Maine in the first four months of 2023 is off the pace of recent years — but maybe not as much as might be expected.
Through April, 1,572 building permits have been issued in Maine.
Projected through 2023, Maine is on pace to issue 4,716 building permits, which falls well short of the 7,105 issued last year.
But the number would be right in the thick of pre-pandemic numbers recorded in 2017-19.
Still, there’s a major difference in the housing market from the pre-pandemic years.
One, Realtors continue to say there’s far less inventory than there was prior to the pandemic run-up on real estate. And, as a side note, keep in mind that the median sale price in Maine was $200,000 in 2017, compared to the MSP of $367,500 in April of this year.
The cost of building a home has also increased by double digits, but remains an option within reach of many buyers. Houzeo estimates the cost of a new 2,000-square-foot home in Maine would be $230,000 to $340,000, not including the land, survey fees, site work, permits and related work.
Second, the pandemic brought out legions of cash buyers. So while the federal funds rate went from zero to 5%, sidelining many first-time buyers, in stepped the buyers who didn't need a mortgage — downsizing baby boomers, people moving from more expensive markets. Cash-flush buyers have been ready and willing to go into bidding wars, which continue today on the more desirable properties.
"There is such a high demand for housing, new construction, or otherwise. We have seen builders slow down since the peak of the pandemic, but I don't think that is due to consumer demand," Dava Davin, principal and broker at Portside Real Estate Group, told Mainebiz.
Likewise, New England-regional analyst Tom Dworetsky of Camoin Associates told Mainebiz issues like the cost of materials and lack of construction labor may also be factors in the the slowdown of projects on the board.
"With interest rates remaining high and existing homeowners hesitant to give up the lower mortgage payments they locked in prior to the pandemic, the inventory of for-sale existing homes will remain constrained," Dworetsky said. "New construction will continue to be in demand to supplement inventory available to buyers who may be unable to wait for more favorable rates. That is to say, a lack of demand is not what’s weighing on building permits, but rather issues on the supply side, including labor availability, cost of materials, and difficulty in obtaining financing due to stricter lending requirements."
While much of the development is one-off projects or small developments, Maine's housing stock is being bolstered at the Downs, which has built 500 housing units over five years and plans another 1,500 units, including apartments, senior living quarters, townhomes, duplexes, condos, single-family homes and "tiny" homes of 525 square feet (see image).
A lot can happen before the end of the year, but right now Maine is holding steady.
Kimberly Twitchell, NBT Bank's Maine regional president, has been promoted to a bank-wide position as senior director of affordable housing.
In her new role, Twitchell will be responsible for the strategic direction and execution of NBT Bank’s initiatives and aligning priorities with communities served by the bank. She will direct and advance the activities of NBT’s commercial banking team related to affordable housing and partner with other in-house experts to leverage the bank’s significant investment to date in this area, the bank said.
“Affordable housing is a critical need for the communities we serve across NBT’s seven-state footprint,” said John H. Watt Jr., president and CEO of NBT Bank, “Kim Twitchell possesses deep experience in this area as both a banker and a leader working with affordable housing nonprofits. We are excited to dedicate her considerable knowledge and skills to our affordable housing initiatives and to continue to enhance our positive impact on the communities we serve.”
In June 2022, Twitchell was a leader in the launch of the NBT CEI-Boulos Impact Fund, a $10 million real estate equity investment fund with NBT Bank as the sole investor. The Impact Fund is designed to support individuals and communities with low- and moderate-income through investments in high-impact, community-supported, commercial real estate projects.
Twitchell, who has been Maine's regional president since 2015, also serves on the boards of Avesta Housing, Community Housing of Maine and the Maine Real Estate & Development Association (MEREDA). In addition, Kim recently joined the New Hampshire investment committee for Evernorth.
NBT, which is based in Norwich, N.Y., and has an office at 5 Widgery Wharf in Portland, has financed 130 affordable housing construction projects, $800 million in total, creating 6,000 housing units. It has assets of $11.84 billion and does business in seven states.
The University of Southern Maine Foundation announced that it has received a $25,000 gift from ProSearch, a recruiting and staffing agency in Portland.
The gift will support the completion of the McGoldrick Center for Career & Student Success, now under construction on USM's Portland Campus. It is scheduled to open this coming September.
The McGoldrick Center will be three stories and 42,000 square feet in all. The new McGoldrick Center will serve as the Portland campus crossroads, where students, faculty, alumni and employers can connect and collaborate.
PC Construction is managing the project.
The Boulos Co., a commercial real estate firm in Portland, promoted Sarah Grillo to transaction coordinator. Grillo was previously a marketing and administrative assistant.