2024 Market Forecast

2023 Review & 2024 Market Forecast NORMAL is not really a word that can apply to the real estate market. Who even knows what normal can mean anymore as the market feels like the weather trends these days which are now better described as historic, or wonky. But the market is a bit easier to manipulate as the Fed finally achieved the goal of slowing down the pace of sales with rate increases. As the interest rates climbed, and the prices did not fall, homes became less and less affordable. A mortgage on a 400k home with 10% down in October of 2023 would have a monthly payment of $3,088, while the same mortgage in October 2022 would have been $2,668, and only $2,023 the year before.

Now, as rates drop into the 6% range, it is creating a thaw in the market. Buyers are feeling more optimistic and sellers are a bit less reluctant to sell. However in 2023, there were a lot less sales than in 2022, an already historically low year. Leading the pack in southern Maine was Androscoggin County, which has been ticking up in price as buyers are priced out of Greater Portland. However, while prices rose in the double digits from 2021 to 2022, the pace in many counties slowed to under 10% in 2023, with some coming close to the traditional rate of 4%.

Coincidentally, 4% was the price increase number that was projected for 2023, but only Sagadahoc county complied. So where are we headed in 2024? No one predicts there will be prices dropping, but returning to 20% or more annual increases is even more unlikely. Additionally, Maine remains a very attractive place for buyers.

This year Maine was the #1 place for inbound moves for Atlas Van Lines.

Portland appears in multiple Top 10 lists of places to live and also is in the nationwide top 10 for markets with the most pent-up buyer demand. Many analysts are predicting a strong spring market.

NUMBER OF SALES

2022 vs 2023 5,000 4,000 3,000 2,000 1,000

2022 2023

2022 2023

2022 2023

2022 2023

York County

Androscoggin County

Sagadahoc County

Cumberland County

Based on information from Maine Real Estate Information Systems, Inc. (d/b/a Maine Listings) figures pulled on January 8, 2024 for the period of January 1, 2022 through December 31, 2022 and January 1, 2023 through December 31, 2023.

Looking Ahead at 2024 When scanning the changes year-over-year by town as seen on the opposite page, there are some wildly high price jumps - the median price of a home in Gorham went up 22% in 2023. It is also important to look at towns that have similar appeal to buyers, especially out-of-state buyers, who often focus on ranking reports. Falmouth, Cumberland, Cape Elizabeth and Yarmouth all have median home prices in the 700k range. Across all 4 towns, there were only 47 homes that sold between 700k to 799k and they were about 2,200 sqft in size and not a single one was new construction. In 2019, about the same number of homes sold in this price bracket but they were about 1,000 sqft bigger. These size and quality homes would now be priced over 1 million.

Across the state as a whole, home price appreciation from 2019 through the third quarter of 2023 was 64.9%! Maine prices accelerated higher than any other New England State. Coastal towns experienced some of the most dramatic accelerations.

So if you sold, or even own, a home in Boothbay or Kennebunkport, your value may have increased even more. The lack of inventory, expected to notch up a bit this year, may slow prices down a bit, but the decrease in mortgage rates may very likely offset that. The 2024 real estate market in Maine will likely be yet another one that favors sellers.

Home Prices in Southern Maine 2022 vs 2023 2022

2023

% Change

Cumberland

$465,000

$510,000

9%

York

$414,950

$439,000

5%

Androscoggin

$265,000

$290,000

9%

Sagadahoc

$365,000

$382,000

4%

County:

Based on information from Maine Real Estate Information Systems, Inc. (d/b/a Maine Listings) figures pulled on January 8, 2024 for the period of January 1, 2022 through December 31, 20212 and January 1, 2023 through December 31, 2023.

Median Home Prices 2022 vs 2023 Greater Portland Portland South Portland Westbrook Windham Gorham Gray Cape Elizabeth Scarborough Falmouth Cumberland North Yarmouth Yarmouth Freeport

Southern Maine 2022

2023

% Change

$476,500 $450,000 $410,000 $425,000 $450,000 $430,000 $720,000 $585,000 $736,500 $703,500 $579,000 $730,000 $567,500

$545,000 $470,000 $430,000 $445,000 $550,000 $425,825 $777,000 $646,000 $862,000 $792,500 $675,000 $755,000 $637,500

14% 4% 4% 5% 22% -0.97% 7% 10% 17% 12% 16% 3% 12%

Midcoast Brunswick Topsham Harpswell Bath Phippsburg Georgetown Wiscasset Boothbay Waldoboro Thomaston Rockland

Saco Biddeford Buxton Standish Kennebunk Kennebunkport Wells York Sanford Waterboro

2022

2023

% Change

$429,000 $400,000 $355,000 $375,000 $570,000 $850,000 $435,916 $635,000 $295,500 $338,450

$500,000 $430,000 $392,000 $415,000 $615,000 $1,194,000 $450,000 $709,517 $340,000 $366,450

16% 7% 10% 10% 7% 40% 3% 11% 15% 8%

2022

2023

% Change

Central Maine 2022

2023

% Change

$375,000 $400,000 $625,000 $320,000 $525,000 $530,300 $300,000 $497,500 $260,000 $300,250 $317,000

$400,000 $405,500 $745,000 $330,000 $500,000 $635,000 $307,500 $629,500 $284,500 $365,000 $367,500

6% 1% 19% 3% -4.76% 19% 2% 26% 9% 21% 15%

Augusta Hallowell Gardiner Belgrade Manchester Winthrop Readfield Vassalboro Dresden Whitefield

$238,000 $325,000 $251,500 $380,000 $352,372 $255,000 $317,000 $283,750 $330,000 $283,000

$250,000 5% $370,000 13% $249,000 -0.99% $371,500 -2.24% $325,000 -7.77% $311,500 22% $332,500 4% $277,500 -2.20% $239,900 -27.30% $300,000 6%

Lakes Region and Lewiston-Auburn Raymond Casco Naples Bridgton Harrison Sebago Oxford Poland Lewiston Auburn

2022

2023

% Change

$395,000 $372,500 $350,000 $331,550 $350,000 $350,000 $239,500 $319,500 $260,000 $250,000

$478,500 $385,870 $354,500 $376,750 $335,000 $390,000 $323,228 $350,000 $283,250 $280,000

21% 3% 1% 13% -4.29% 11% 34% 9% 8% 12%

Based on information from Maine Real Estate Information Systems, Inc. (d/b/a Maine Listings) figures pulled on January 8, 2024 for the period of January 1, 2022 through December 31, 2022 and January 1, 2023 through December 31, 2023.

Flood Insurance in Maine • Only 1% of homeowners in Maine have flood insurance. The national rate is 4% • Homeowners without mortgages are not required to have flood insurance.

• Typical home insurance does not cover flood damage, or even sump pump failure from power outages.

• Maine laws (currently) do NOT require sellers to disclose flood risk to buyers.

They only need to discourse if they currently have flood insurance.

• FEMA estimates 25% of claims come from areas not deemed high risk.

• On average flood insurance costs $1,306 in Maine -this will likely change!

The winter storms this year have been especially damaging because of flooding.

Buildings that no one can ever remember flooding, took on water. Historic structures, many over 100 years old, were destroyed. There were summer cottages, built before code restrictions on setbacks, that were swept out to sea. Road damage has been extensive and beach erosion has brought the ocean right up to some doorsteps, and in some cases right, over the threshold.

Flood insurance will likely become a significant issue in Maine real estate this year. In California, insurers are raising rates by 20% and not issuing new policies. Costs of insurance in Maine had already been rising to catch up with the dramatic increase in construction. Homeowners should review the coverage they have now and weigh risks and costs of repair and rebuilding. Buyers should be especially careful and consider insurance quotes when making an offer as they weigh costs of ownership.

Typically, the costs of insurance are not determined until just before closing, but it is possible to evaluate the risks and costs before even making an offer.

Sales vs Inventory How Did 2023 Measure up to 2022?

Residential Sales in Units

Residential Sales in Dollar Volume 202 2

2023

2022

2023

$8 .1 Billion

$7 .4 Billion

20 ,100

16,761

-9%

-17%

Units Sold Breakdown Single Family

Condominium

2022: 20,611 1 8 % 2023: 16,941

2022: 1915 9% 2023: 1729

Land

2022: 5963 2 6 % 2023: 4375

Manufactured

2022: 1148 4% 2023: 1247

Land Sales in Dollar Volume 2022:

$492 Million

14%

2023:

$420 Million

Maine’s Best of 2023 From the Mountains to the Coast

Largest Single Family Home SOLD

13,554 Square Feet on Long Lake

Largest Parcel of Land

645 Acres in Jefferson

Most Expensive Listing

$17 Million Mount Desert Most Expensive Condominium SOLD

$2.8 Million in Scarborough

Most Expensive Single Family Home Sold

$11.5 Million in Scarborough

Based on information from Maine Real Estate Information Systems, Inc. (d/b/a Maine Listings) figures pulled on January 8, 2024 for the period of January 1, 2022 through December 31, 2022 and January 1, 2023 through December 31, 2023.

ABODE Sales in 2023 117 Homes $ 5 7 . 8 M i l l i o n i n Vo l u m e