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Updated: January 4, 2024

Real Estate Insider Notebook: Housing outlook, Berwick development, Avesta grant

File photo Maine's home market has seen an increase in the median home price but inventory remains tight.

Bank of America’s "Homebuyer Insights Report" finds that prospective homebuyers’ patience may be wearing thin.

Today, 62% of would-be buyers are willing to wait for prices and/or rates to fall before buying a home — down from 85% in April 2023.

The report had some other interesting findings:

  • 53% of survey respondents said homeownership is at the top in the definition of financial success;
  • 63% of homeowners surveyed said owning a home is one of their greatest personal achievements;
  • 54% of homeowners said they’d be prompted to sell if their dream home became available and/or if they found a more affordable area — even if it meant paying a higher interest rate for a new mortgage.

People who are eager to get into a home would make some sacrifices, the report shows:

  • 35% would forgo a brand-new home;
  • 33% would forgo being near family;
  • 32% would forgo public transportation access;
  • 31% would forgo historical charm.
File photo / Tim Greenway
Chris Lynch, owner and president of Legacy Properties Sotheby’s International Realty, outside a Cape Elizabeth home his firm listed for $5.5 million.

One home broker's outlook for 2024

Mainebiz had a chance to sit down recently with Chris Lynch, principal of Legacy Properties Sotheby's International Realty.

Legacy Properties focuses on the upper end of the home market — homes over $600,000 — which right now might include quite a bit of the market, at least in southern Maine. 

Looking ahead to 2024, we asked him for his outlook as we head into the New Year.

"I am very optimistic about the Maine real estate market for 2024," Lynch said. "It is shaping up to be more of a return to the conditions we were enjoying during the pre-pandemic 2018-19 time frame. We will continue to experience an abatement of the unique conditions and circumstances that caused a nationwide feeding frenzy with respect to asset allocation, resource relocation and revived focus on living for today."

We often think of the past three years as being characterized by COVID "refugees" surging into the market, bidding wars, cash offers and the waiving of inspections.   

Lynch said were heading toward a "more normalized" home market. 

"There is no longer a buyer group which feels the need to escape from the big cities," he said. "With lots of government stimulus money still on the sidelines feeding inflation, it has become more difficult to access. The Federal Reserve Bank has reversed its easy money policy with a relatively harsh tightening course of higher interest rates. More offices are bringing employees back into the office to increase productivity and accountability.

"Lastly, many home sellers who have remained on the sidelines due to lack of inventory and/or the comfort of holding a 3% mortgage, will find that they can now afford to sell their home and find a new suitable home than has been previously out of reach."

In October, when mortgage rates surged to a recent high of 8%, Lynch said that was a "showstopper for both buyers and sellers." 

"The home affordability measures were so far out of whack that it seemed like it might take a prolonged period of time to get back to something more tenable," he said.

We're now looking at mortgage rates closer to the 6.5% range for qualified buyers. 

"Although that seemed extremely high on the way up in September, it actually looks quite attractive on the way back down for 2024," Lynch said.

Everyone will be watching the Federal Reserve to see whether rates fall any further this year.

"With more Fed easing expected, the backdrop is in place to achieve a better balance of buyers and sellers looking to make thoughtful and calculated decisions about where they want to live and how they want to live," Lynch said. "With the current market conditions, Maine is always going to be a winner."

cranes tugboats water
File photo / Tim Greenway
Bath Iron Works is a business unit of Reston, Va.-based General Dynamics Corp. (NYSE: GD).

BIW worker housing 

Bath Iron Works plans to develop 85 new housing units for BIW workers, according to a press release this week from U.S. Sen. Susan Collins, R-Maine, who was instrumental in a federal allocation of $34 million for various initiatives at the Bath shipyard. More details on this later.

Onyx Owl
The Edge includes 8 Main St., with two commercial units. The developer is Great Falls Construction.

The Edge (not the U2 guitarist)

The Edge at Berwick, a mixed-used development on the site of the former Prime Tanning Mill site, is moving forward.

Photo / Tim Greenway
Great Falls Construction project administrator Joey Smith

Joseph "Joey" Smith from Great Falls Construction checked in with Mainebiz to let us know that the development is now in the second phase, which will add five new buildings (out of the 12 overall).

Great Falls, which bought the property four years ago, now has a mixed-use building in place and two of the residential buildings now have tenants. 

The only original building dating from the tanning mill days is 12 Sullivan St., which has been converted to eight commercial spaces, all but one of which is leased. 

Businesses there include Badwolfe Butcher & Market, Mint Dental, MUAH Salon, Primal Fit Gym, Tree Frog Learning Center & Daycare and Domino's.

The one remaining space is 4,100 square feet and is available and could be fitted out for a tenant, Smith said. 

Another new building, 8 Main St., was new construction and has two commercial units. One is occupied by Pretty Little Face and the other, at 920 square feet, is available. The building also includes eight one-bedroom, one-bath apartments. Residents are moving in.

Great Falls Construction
At 3 School St., a mixed-use building with two commercial spaces is set to open in the first quarter. The tenants there will be Aroma Joes Coffee House and a chiropractor. The building will have seven apartments, ranging from one bedroom to two.

At 3 School St., a mixed-use building with two commercial spaces is set to open in the first quarter. The tenants there will be Aroma Joes Coffee House and a chiropractor. This building will have seven apartments, ranging from one bedroom to two.

Finally, Great Falls has broken ground on buildings at 16 and 18 Sullivan St. Each building will have 12 living units. 

Rebecca Hatfield holding a hard hat in front of a building site
File photo / Tim Greenway
Rebecca Hatfield, president and CEO of Avesta Housing

Avesta gets boost from Gorham Savings

Gorham Savings Bank has pledged $200,000 to Avesta Housing, the largest nonprofit affordable housing provider in northern New England, to aid in the development of energy-efficient affordable homes and support services for people in need.

The multi-year gift will address two key components of Avesta’s work:

  • Improving access to support services to help residents meet their immediate needs and achieve long term success. Avesta partners with more than 100 organizations to help its residents access essential resources and services, such as food, health care, transportation, education and jobs.
  • Incorporating sustainable building design elements into new affordable developments, with a focus on solar energy, which both reduces Avesta’s carbon footprint and decreases housing costs for residents.

“Safe, quality, affordable housing is needed now more than ever. It’s also more challenging than ever to build and operate. We rely on support from our partners to help ensure that residents not only have a place to call home, but that they have the resources they need to achieve and maintain housing stability,” said Rebecca Hatfield, president and CEO of Avesta.

“This donation from Gorham Savings Bank will help Avesta tackle Maine’s housing crisis, improve lives, and enrich communities for years to come.”

File photo
Steve deCastro, president and CEO of Gorham Savings Bank

Avesta Housing delivered almost 200 new affordable homes in 2023 to people in need in Maine and New Hampshire. It estimates that Gorham Savings Bank’s gift will directly assist 200 to 400 individuals over the next few years.

“We believe helping Mainers achieve housing stability is crucial to cultivating a thriving community,” said Steve deCastro, president and CEO of Gorham Savings.

“Helping our neighbors is one of our core principles and we are proud to support Avesta’s mission in these under-resourced, high-impact areas.”

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