Courtesy / Benchmark Real Estate
Tom Landry
January 20, 2022
Portland real estate shattered records in 2021, and could do it again this year
Courtesy / Benchmark Real Estate
A house for sale in the West End of Portland, which broke records for home sales.
By Jessica Hall
The Portland residential real estate market broke records for price increases in 2021, driven by suburban single family homes located off the peninsula, new luxury units, urban condos and smaller apartment buildings. And there is no sign of a bubble bursting any time soon.
“Every adjective you could throw at it isn’t enough. Even industry veterans who have been doing this for 40 years have never seen anything like this,” Tom Landry, owner of Benchmark Real Estate, told Mainebiz in an interview.
“We saw people paying well in excess of asking price. No inspections. Rent back for free. Buyers on their ninth, 10th, 11th try.”
While Portland has been highlighted on national lists of the “best” places to retire or raise a family for years, that created a relative trickle of buyers coming into Maine. The pandemic, however, accelerated and amplified that trend and brought 20 years of growth in a year-and-a-half, Landry said.
Across all segments of the market, the median sales price increased by double digits in 2021 over 2020.
Of all residential segments, single-family homes saw the largest increase in value this past year. And, according to data from the Maine Real Estate Info System, it was the largest 12-month increase ever in recorded history.
This was driven by significant price appreciation in homes off Portland’s peninsula. In neighborhoods such as Back Cove, Deering Highlands, Deering Center, Stroudwater and North Deering, some homes went for nearly twice the amount they might have the year before, Landry said.
In Portland overall, the median sale price for single-family homes jumped 42.2%, to $515,524. On the peninsula, the median sale price rose 13%, to $715,000, while off the peninsula, prices jumped almost 29% to $445,000.
“The artificial lines that locals may see as ‘on peninsula’ versus ‘off peninsula’ aren’t seen by people from away. They don’t see those divisions and they realize they can get a yard, a garage and extra space in other neighborhoods,” Landry said. “We may have a point where we have parity on and off the peninsula.”
The desire for space and amenities held true for Mainers and those moving from out of state, even those coming from major urban centers, Landry said. They sought distance from neighbors and space for a patio, a fire pit or a swing set. And since many of them would be working from home for the foreseeable future, they also wanted a little more space inside for an office, a home gym and a family room.
“I see these trends continuing,” said Landry. “A house has to do more for us than it used to.”
In the condominium market last year, Landry said that newer, more urban, high-end, high-rise buildings with views and amenities saw high demand and prices Portland had never experienced.
“The fact we’re seeing these very expensive condos being built and selling over $2 million and now $3 million dollars, points to future high-end condo projects coming online,” said Landry.
While the median sales price of the Portland condo market increased 10.9% to $469,530, the number of sales at $1 million or more increased from 10 to 44. Also, the number of sales at $2 million or more increased from none in 2020 to eight in 2021. Portland also had its first two sales over $3 million, Landry said.
In the Portland multi-unit segment, the median sales price rose 15% to $670,500 from $585,000.
“Rent control seems to have had an impact, especially on buildings with five or more units. Real estate agents believe they sold for less per unit then they would have in previous years. And with several large apartment buildings in the planning stages, Portland could soon have a rental surplus,” Landry said.
More projects could be on the way as developers of new buildings aren’t restricted by rent control when they set their initial rental prices. Another impact has been condo conversions with many owners selling apartments as condos instead of taking lower rents.
While larger Portland multi-unit buildings showed somewhat disappointing numbers, the opposite was true for smaller-sized buildings. Buildings with four or fewer units sold well in 2021 and set new price per unit records.
This seems to have been fueled by owner occupants looking for a single-family home or condo alternative. “These smaller buildings garnered sales prices that would have been inconceivable just a few years ago,” said Landry. “And there were more of them.”
Landry said that the data showed that in 2021, Portland had 21 sales of buildings that contained two to four units priced over a million dollars. Before 2021, only 11 had ever sold over that amount ever.
Landry expects 2022 to remain busy with a hectic spring selling season ahead.
“We predict history repeating,” Landry said. “Now that Portland is on everyone’s short list, the spring market could be very busy.”
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