Realtors cite ‘mosh-pit environment’ with recent surge of home sales
Courtesy / Portside Real Estate Group
This house on Harriet Street in South Portland listed for $299,000, and received 11 offers. The property sold June 29 for $351,000 to an out-of-state buyer.
Realtors from across Maine say there is anecdotal evidence of a recent surge of out-of-state home buyers. While the numbers may not back up those assertions just yet, local real estate leaders say they will.
As Maine continues its status as one of the safest states in relation to the COVID-19 pandemic, some realtors from across the state feel the beginning stages of an impending trend of interstate movers from more populated areas of the country.
After a slow spring, Realtors say desirable properties are receiving multiple offers, sometimes from buyers who haven’t seen the property in person. Buyers are using cash to speed the deal and push aside those going with traditional financing. Much of the interest is being spurred by out-of-state buyers who are working remotely anyway.
“I believe they don’t want to be packed up in the city,” Chad Norris, owner of Berkshire Hathaway Northeast Real Estate, told Mainebiz. "We’re more rural here, and this pandemic is driving it obviously. For lack of a better word, they’re trying to flee their area and get to a safer place.”
After a sharp decline of units sold in May — a drop-off of 21.34% compared to May 2019 — sales stabilized in June, according to the Maine Association of Realtors. In June, sales in Maine declined 4.3% from June 2019, but the sales price rose 4.15%.
Dava Davin, principal of Portside Real Estate Group, which has sales offices throughout Cumberland county, told Mainebiz that Maine’s most populous region has been “a tight market” in recent years, and that’s only been made tighter by the influx of out-of-state buyers.
Realtors expressed that it is as desirable as ever to live in the greater Portland area. Demand is not, and likely never will, be met with an adequate amount of housing supply.
“That creates a mosh-pit environment,” Davin said. “It’s like a full-contact sport for buyers to get a home.”
Realtors statewide are reporting similar trends.
In Bangor, Better Homes and Gardens/The Masiello Group sold 490 properties in June, an increase of 30 from a year ago, said regional sales director Denise Reed. Sales prices were up an average of 6%.
In the Damariscotta-Newcastle market, after the spring drop-off, Newcastle Realty salespeople have found it “difficult and challenging” to keep up with the listings, said President Dennis Hilton. There are bidding wars to sell above listing price and many buying houses sight unseen. There is an advantage for people who can buy houses with cash and no financing.
Hilton told Mainebiz that his firm’s sales “took a sharp dive” when the pandemic first hit. The firm shut its physical office, but the business itself never closed. As soon as they transitioned to a remote working environment, the firm of 18 brokers invested in Matterport 3D virtual tours, which helped stabilize the business to match its 2019 sales to date.
“It gave us a leg up regarding how we were positioned relative to our competition,” Hilton said. “You saw a lot of brokers in southern Maine walking through the homes and showing clients by Facetime. We offer videos and we offer drone based stuff, but we found that Matterport Tours really resonated with people looking for homes, knowing that they couldn’t see them in person.”
Back at Berkshire Hathaway Northeast, Norris also saw a similar bump in their properties across the state market.
In a personal example, Norris put his late mother’s Bangor house on the market and had three offers the next day. The house was listed at $155,000 and is already under contract.
Norris said there are many out-of-staters moving to Maine, and he guesses — conservatively — that 75% of recent buyers are from out of state, hailing mainly from New York, New Jersey and Massachusetts.
“As of June 1st, it was like the floodgates opened,” Norris said. “Depending on the price point, we’re seeing anything from $175,000 to $200,000 and below in days.”
The big city defectors are common in the state. According to research from SmartAsset, Maine ranks in the top half of states that in recent years have seen an influx of “rich millennials.”
Interest rates are still low, hovering around 3% for a 30-year fixed mortgage. Last year at this time, Norris said, it was about 3.5% to 4.5% interest rates.
Those numbers help a buyer, sure, as they do a seller. But it is clearly a seller’s market in Maine and it’s not hard to figure out why.
“That’s what it boils down to, just basic economics of supply and demand,” said Davin of Portside Realty. “It’s like it’s on steroids, it’s accentuated this year because of the market and the demand.”
The apparent influx of out-of-state buyers has not yet been reflected in the stats, Maine Association of Realtors reports.
Traditionally, 75% of home buyers in Maine are indeed Mainers. Those numbers ring true this year as well, but that may be changing, said Tom Cole, president of the Maine Association for Realtors.
“I also had seen and heard, anecdotally, that there are a number of people coming to the state of Maine, but it does take a while to buy a house, especially when there is not enough inventory,” Cole told Mainebiz. “ZIP Code data does not get published or matriculated until that house closes. We don’t see much of a difference in that data, but as I think as we look forward, we will.”
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My state is dying. I live in South Portland and cannot wait to get out of this yuppie hell hole. Five years until I can retire.
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