Maine’s real estate market has been on a wild ride since the early days of the COVID-19 response, according to four Lincoln County real estate brokers.
Dunham Realty broker and Maine Association of Realtors treasurer Sherri Dunbar said for the 20 years MAR has been paying attention to trends, this is the first year there has been a significant jump.
“It's been crazy, very crazy. The market's been really good anyway for the last couple years before COVID. In March, no one could predict what was going to happen. We just didn't know how it was going to impact real estate or anything else … but it’s not as much as what you get talking to everyone on the street.” Dunbar said contrary to rumors, there are equal numbers of Maine and out-of-state buyers. Maine has had a trend of out-of-state buyers for years especially for the summer and early fall. Statistics for July showed 5% more out-of-state buyers and August showed 9.7% compared to one year ago, she said.
Tindal and Callahan broker Jonathan Tindal said real estate was like most businesses in the first days of the COVID-19 response. When real estate was deemed an essential business, property activity ramped up even among out-of-staters who were not allowed to travel to Maine or who were required to self-isolate for 14 days upon arrival.
Tindal said Multiple Listing Services (MLS) data released Sept. 1 showed less improvement than expected on the peninsula compared to a year before. However, by Oct. 15, statistics reflected many closings which began in July and August.
“Total sales volume on the Boothbay peninsula – Edgecomb to Southport – is up 146% compared to the same time period in 2019 … The jump was incredible as far as our total sales volume between Sept. 1 and Oct. 15. That really can be attributed to a tremendous boost in activity in July and August … which translated to huge sales volume in September and the first part of October.”
Tindal said the median home price is up 114% and Dunbar said there were 20% more homes sold this year than last year. Median sale price for Lincoln County is $282,345, Dunbar said.
Sotheby’s International broker Dennis Gleason said higher priced properties are following the same trend as lower priced ones. Sotheby’s Portland office had a buyer offering cash for a $2.5 million house with multiple offers, and none of the buyers had seen the home other than online, he said. “We just had some local folks in who put a cottage on the market on a Friday. They had four offers, three of them sight unseen, by Monday.”
Gleason said if there is any metric for determining the health of local real estate, it’s by taking a look at the local schools, which have seen a large increase in enrollment. “The schools have almost 100 new students, Southport also has almost double their school population … If people can make it through a couple of winters and feel like they belong here, then they'll probably stick around.”
Harbor Realty broker Larry Colcord said he believes that while there has been an uptick in buyers from out of state, Mainers also seem to be discovering the value of living on the Boothbay peninsula. “All around, I think a lot of people to the south of us are realizing the attractions the Boothbay region has and I think this could possibly continue ...”
Dunbar has met several families staying through January or beyond who would normally leave for winter. Besides Maine buyers, who are always most of the market, buyers are coming from mostly Massachusetts, New Hampshire, New York and Florida. The other states and international buyers make up 9.6% of out-of-state buyers, Dunbar said.
People are not choosing the Boothbay region by throwing a dart at a map, said Tindal. They have been vacationing in the region for years, even generations, or perhaps have other family history in the region.
While all the brokers acknowledged a greater trend in homes selling at asking price or even higher, if a home is priced appropriately, it will sell quickly.
Tindal said, “We've also seen buyers who are willing to take more risk in securing the property. Price is just one element of the overall terms of a contract.”
Buyers are waiving inspection processes and even entire due diligence measures typical of boilerplate contracts. Other ways buyers are getting creative include paying cash, not opting for any financing contingencies or large earnest money deposits. Said Tindal, “There's all sorts of ways strategically that buyers are attempting to get a seller's attention and convey their sincerity to buy the property … (that) they don't want to be denied and they're willing to accept the risk that issues or defects may exist and will be reckoned with after closing.”
Dunbar said real estate is always a cycle and the trends will change at some point no matter what the coronavirus does, but while interest rates are at a historic low, there is still a driving force to buy. Tindal said interest rates are so attractive, buyers with means are opting for financing because the stock market is performing well, the price is right and borrowing is at its cheapest.
Said Tindal, “Why liquidate invested funds in a well performing portfolio when you can get 3% financing from a local bank? On one hand, you're trying to make your offer as attractive as possible, but on the other hand people are saying ‘How can I pass up these incredibly low interest rates?’”
Colcord hopes the summer activity is priming the market for continued interest in the region. All the realtors said they hope families will continue to move into the area.
Said Gleason, “I have enough evidence to know it's a trend, but it's hard to say if it will continue … (Some) say we could be cannibalizing the normal fall season, front loading, so it'll be interesting to see if that bears out.”