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Courtesy / The Cottages at Pine Meadows
A newly built spec cottage at the Cottages in Pine Meadows development in Saco. Plans are for 24 more, at the former motor court, where seven original ones have also been renovated.
A plan for 32 cottages for owners 55 and older on U.S. Route 1 in Saco is on the fast track to be built, riding the pandemic-driven wave of buyers from out of state flowing into Maine looking for homes in more rural areas.
"There are 10 buyers for every one home out there," said Mark McClure, managing director GenX Capital Partners, which is partnering with Portland developer Ron Goddard on the Cottages at Pine Meadows. "I don't see that slowing down any time soon."
The one and two-bedroom cottages are small — 800 square feet and less — and are aimed at out-of-state seniors who would most likely spend part of the year in Maine and part in Florida, or somewhere else warm. They range in price from $169,000 to $269,000, in a state where the median home price has soared to $273,500.
Though the cottages are small, the price, too, is a draw, McClure said. The previous owners of the site, who got the development process rolling, have a list of 168 potential buyers, all but one from out of state.
"Where in Maine can you find a new build condo for under $200,000 that is only minutes away from the major beaches, restaurants, shopping and highways?" he told Mainebiz. "They don't exist, especially for a 55 and older segment."
The surging wave in home sales to out-of-state buyers has a smaller ripple that the Saco plan is also riding — Maine's old cabin-style motor courts are being scooped up for renovation and sale by investors frustrated with the lack of inventory in the state.
Maine home sales have risen dramatically the last few months, much of it by buyers from other states looking to flee more crowded urban areas as the COVID-19 pandemic keeps its hold. Maine home sales were up 22.78% this September, compared to 2019, and are on a pace to break the record set last year, said Tom Cole, president of Maine Association of Realtors. He cited the "allure of Maine’s quality of life and response to COVID-19 from across the country."
Cole said historically low inventory and more buyers than sellers mean strong competition, faster sales and increasing pricing.
McClure agreed, and said buyers are frustrated with the lack of inventory. Sellers can pick and choose, and offers can soar as high as $50,000 over selling price, he said. It makes it a hot market for developments like the The Cottages at Pine Meadows.
The majority of out-of-staters on the potential buyers list are from the Northeast, particularly Massachusetts, New York and Connecticut, but he said there is interest from all over.
"The corporate and offseason rental market is thirsting for inventory, and this will allow our buyers to enjoy summering in Maine while generating an income if they decide to head South in the winter," he said. "The best part is the continued value appreciation as inventory continues to stall and buyers continue their exodus to Maine."
GenX has its eye out for similar sites, but in the meantime, development of Pine Meadows is expected to take shape fast. The plan was approved in 2018 by the Saco Planning Board for former owners Sandra Murray and Bill Koch, of Old Orchard Beach, and amended in June. It needs change of ownership approval by the board, which is scheduled for Nov. 16.
"We'll have shovels in the ground Nov. 17," McClure said.
While McClure says many owners will likely spend only part of the year at the cottage, renting it out to help cover their mortgage, rentals must be for a minimum of four months, keeping them from becoming short-term rental properties. One resident also has to be at least 55 years old, for both buyers and renters.
Plans are for 24 units to be added to the original seven new builds already on the two acres — a long, narrow lot that stretches from U.S. Route 1 back toward a meadow. The one- and two-bedroom cottages will have finished basements and loft areas for storage or visiting grandkids. The cottages come with dedicated parking spaces, and there is visitor parking as well. The site will be attached to city sewer and water.
Murray and Koch "did a fantastic job" upgrading the seven cabins on site, which date back decades. They also built a two-bedroom spec unit. The condo plan was originally theirs, but they had to sell for personal reasons and GenX and Goddard were happy to snatch it up.
"It's shovel-ready, it's in a great location," he said. Just north of Aquaboggan Water Park, the site is a quick drive to downtown Saco or Old Orchard Beach, and minutes from the Interstate 195 connector to the Maine Turnpike.
The seven renovated cabins, which are nestled in a pine grove, just off U.S. Route 1, are fully rented, and the tenants will have first refusal on buying, McClure said. The new cabins will be built behind them on the narrow lot, away from the road. The lot is surrounded by meadow.
The recent history of the site follows Maine's fast-changing real estate landscape. Once a farm, the seven cabins, shielded from Route 1 by a grove of pine trees, were built in the 1960s.
The motor court was sold in 2014 to a developer who planned a motel. Murray and Koch then bought it, and plans for the over-55 condo development began to form in 2017, with a visit to the Planning Board for contract zoning that would allow that type of development.
This year they asked for, and got approval, to remove a planned community center in lieu of an additional cottage earlier this year.
GenX and Goddard closed on the property Tuesday for an undisclosed price. Murray and Cash Wiseman, both of Keller Williams, brokered the sale.
GenX, based in Miami, Fla., has also partnered on 333 Water St., in Augusta, and the Saco Mill Apartments. McClure said the developer usually has a $10 million minimum, but the cottages offer was too good to pass up, given the surge in the residential estate market in Maine,
The new development will be the same one that Murray and Koch were approved for, with an eye toward speed, given the list of potential buyers.
These homes will be aggressively marketed to Maine seniors for sure
What about Maine seniors looking for 55+ homes? Are they all being built for out of state buyers!?
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