Portland, Maine housing market is a “full-on frenzy”
Portland, Maine, has emerged as a popular destination for current homeowners and prospective buyers looking to move out of metro areas into more spacious secondary cities.
A recent report from Redfin showed that 14.9% of movers leaving Boston, Mass. were heading to Portland in January and February of 2021. But the East Coast seaside town was gaining popularity way before then – millennials, especially, began flocking to the Portland housing market in 2020 to take advantage of the city’s growing startup scene of biotechnology, bioscience and biopharma. With the added push of COVID-19, which allowed millions to work from home, competition for new and existing lots in Portland skyrocketed.
“It’s one of the hottest cities to move to in northern New England,” said Dava Davin, a principal broker at Portside Real Estate Group in Portland. “But it’s not random – people come to Maine on vacation, or kids go to summer camp here, or people grew up here and they have craved recreating those joyful memories. COVID just gave them permission to make Maine their permanent home when remote work became the norm.”
Diving into the housing numbers, Davin said Portland’s current absorption rate is 0.98 – meaning agents have less than one month of inventory of residential properties. A balanced market, Davin said, requires five to six months. With demand that high, homes for sale are going under contract 24 to 36 hours after they are put on the market.
Last summer — usually Maine’s busy season – saw a 25% decrease in the number of properties that came on the market compared to 2019.
“It’s not surprising to see dozens of offers on one property,” Davin said. “It’s a full-on frenzy for buyers to secure a home.”
And that low inventory is driving prices higher. In June 2020, median sale prices in Maine had jumped by more than 6% year-to-year – reaching nearly $250,000, according to the Maine Association of Realtors. The median listing price is now $435,000 — up 8.9 year over year. But the actual sales prices are much higher — up 31.4% from February 2020, according to Davin.
“It’s incredible,” Davin said. “Maine has never seen prices like these.”
The market was already hot in Maine before the onset of COVID-19, per Jason Kern, a designated broker investor and owner of Kern Real Estate in Portland. He said he anticipated things to cool down when the virus hit, but it was “like adding fuel to the fire,” he said.
“Buyers became more and more motivated – almost desperate – to get into a home,” Kern said. “Right now, in Portland, there’s not enough builders, not enough homes to buy, and not even enough places to rent. It’s very normal for a house under $300,000 to get 20-plus offers.”
Added Janet Peruffo of Maine’s CSM Real Estate, who has been a broker since 1992: “I’ve been doing this for 30 years, and I’ve never seen this much activity for every Maine town and every type of lot. Our neighbor bought their home for around $300,000 and are selling it for around $600,000. And they didn’t even make any big changes to it. We’ve actually had a few buyers from Texas that have bought places up here site-unseen. Literally, when they moved in it was the first time they had seen the house.”
On the building side, Maine has an advantage that much of the country doesn’t: its close proximity to Canada has made getting lumber easier, according to Nate Ross, owner of Stonewood Builders.
“It would be pretty tough to do anything down here without lumber, so it’s been nice to still be able to get that,” he said. “We haven’t had much of an issue getting materials, either, but we do have to play a ways out. Windows and doors that I used to get in a couple of weeks now take eight to 10 weeks to arrive.”
Ross said plenty of out-of-state movers are wanting to build their own homes, but there just aren’t that many buildable lots right now.
“People are valuing their existing homes really high, and locals know that people moving in from out of state are going to pay top-dollar for their home if they put it up for sale,” he said. “So that’s driven a lot of people to build, but the problem is there isn’t any land to build on, which has driven land prices up.”
He added that suppliers have told him cheap goods are about to become hard for builders to get – with prices still pointing upward.
“That’s concerning,” he said. “Sheeting, plywood products, vinyl siding, plastics — those are all about to be more expensive.”
And still, the movers are flocking to Maine.
Boston, as noted, is seeing an exodus of people leave and put down roots in Portland – but several Portland-based realtors said Massachusetts, in general, is the main state people are leaving when they move to Portland. It’s understandable that many New Englanders are taking the short hike to Portland if they move, but other states representing the most movers include the aforementioned Texas and California.
As a Maine resident, Davin said newcomers to the area have no shortage of activities — especially if they like the outdoors. Portland is close to a plethora of boating, hiking, and skiing opportunities, and the local food scene is dynamic, she said. And Kern added that exposure to the city is even greater now that cruise ships dock in and out of the city.
“Plus, Portland is just a friendly city,” Davin said. “It’s really easy to make this place home.”
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