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January 22, 2024

Twice today's inventory is needed to fill Maine's shortage of homes

house with gray side and trees Courtesy / Benchmark Real Estate A six-unit property dating to 1850, at 245 Preble St. in South Portland, illustrated a continued price escalation when it listed at $999,000 and sold for $1.23 million. The transaction was brokered by Benchmark Real Estate and Coldwell Banker Realty.

The real estate market in Maine remains robust, but a lack of inventory and higher interest rates continue to create an unbalanced market for single-family existing homes. 

Maine Listings on Friday reported that the median sales price of homes increased 6.21%, to $350,500, in December 2023 compared to the same month a year earlier. The MSP is the price at which half the homes sold for more and half sold for less. 

The number of sales was down 6.14% in December compared to a year earlier.

“The 2023 sales year ended with 13,622 residential transactions and a median sales price of $360,000 — up 7.46% from a year ago,” said Paul McKee, 2024 president of the Maine Association of Realtors and a broker affiliated with Keller Williams Realty in Portland. 

McKee said that, throughout Maine, real estate markets continue to be affected by growing interest rates and sellers’ reluctance to list. That, in turn, has prolonged a shortage of homes available for sale.

“We’re beginning to see more homes on the market than a year ago, yet at a 2.7-months’ supply of available for-sale inventory, we will need more than twice the current inventory to reach a more balanced market — which is indicated by a six-month supply,” said McKee. 

Issues around supply and demand can be tackled through the development of affordable and accessible homes, he added.

National and regional

The same trends are happening at the national and regional level.

According to the National Association of Realtors, sales of single-family homes nationwide were down 6.1% in December. The national median sales price of $387,000 represented a rise of 4% from December 2022. 

Regionally, sales in the Northeast decreased 9.6% and the regional MSP reached $428,100, a rise of 9.4% compared to December 2022.

“Looking forward to the new year, we expect buyer demand to remain strong,” said McKee. “Move-in ready, properly priced properties continue to receive multiple offers in most areas of Maine.”

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