2022 SPRING UPDATE
UNHINGED - that was the word used in a recent report by Fed Analysts to describe the real estate market during the pandemic. Prices throughout Maine accelerated over 19% from February 2021 to February 2022, and in certain towns the price jumps were even higher. This month’s report takes a deeper dive into that phenomenon by putting these numbers in context. One interesting way to look at the way values have changed is to look in 5 year chunks at the median price shifts in Portland. For example, if you bought a home in 2001, the median price was $151,000 and five years later in 2006, the median price was $232,500. On paper your equity and wealth increased $81,500. Conversely, if you bought a house in 2006 at the median value of $232,500 and then sold in 2011 when the market was at a low point, your home could have been worth $219,000. At that time some sellers had to bring money to closing! After 2011 and up to the present day, the market rebounded. From 2011 to 2016 the median price went from $232,500 to $262,000 – an equity gain of $43,000. But then from 2016 to 2021, the curve turned up sharply and a home purchased for $262,000 in 2016 could have sold for $460,000 in 2021. The rapid escalation in home prices fuels the sense of a feeding frenzy. Buyers who miss out on multiple offers also believe they are missing out on opportunities to grow their wealth through homeownership and low interest rates. The goal post keeps moving on them. Sellers are reaping the rewards. Imagine if you bought a home in 2011 in Portland and then sold it in 2021 – in addition to any money you put down, and money you paid toward the principal, your check at closing could be in excess of $240,000 in profit. Based on information from Maine Real Estate Information Systems, Inc. (d/b/a Maine Listings) figures pulled on April 4, 2022 for the period of January 1, 2001 through December 31, 2021.
HOME APPRECIATION IN 2021 One strange and fascinating way to look at price accelerations in another context is to compare the annual price appreciation - which compares home equity gained to the average salaries earned in the area. In other words - how much money did your house make last year compared to how much you made? In 2021, home value appreciation exceeded median wages in 25 of 38 major metropolitan areas across the country. In 11 areas, home values went up over $100,000. The most startling change was in San Jose, where the median salary is $93,000, but the prices of homes went up a shocking $229,277 over the course of a year. For that area, that is close to what an oral surgeon earns.
AVERAGE HOME EQUITY GAINED Q1 2021 VS Q1 2022 County: Cumberland
$46,000
York
$47,200
Androscoggin
$44,750
Sagadahoc
$33,000
Maine never quite compares to the excessiveness of California however. Looking at the largest counties in Southern Maine, the increases in equity are very close to the statewide median income of $57,000. And in Androscoggin County the appreciation from the first quarter of 2021 compared to 2022 was $44,750, almost exactly equal to that of a dental assistant’s annual pay. For more on your town, see the following page. For more on your house, give me a call and I can send you a market analysis report. You may very well be surprised.
-Based on information from Maine Real Estate Information Systems, Inc. (d/b/a Maine Listings) figures pulled on April 4, 2022 for the period of January 1, 2021 through March 31, 2021 and January 1, 2022 through March 31, 2022. -“Occupational Employment and Wage Estimates, 2021.” Interactive Occupational Emp & Wage Estimates, https://www.maine.gov/labor/cwri/oes1.html. -Zillow Research on Mar. 18, 2022. “Skyrocketing Home Values out-Earn Salaries.” Zillow Research, 18 Mar. 2022, https://www.zillow.com/research/home-value-appreciation-incomes-30862/.
MEDIAN PRICE OF A HOME FIRST QUARTER 2021 VS 2022 Greater Portland Portland South Portland Westbrook Windham Gorham Gray Cape Elizabeth Scarborough Falmouth Cumberland North Yarmouth Yarmouth Freeport
Southern Maine
Q1 2021
Q1 2022
$475,000 $337,500 $300,000 $318,132 $350,000 $302,000 $622,500 $490,000 $534,011 $455,000 $489,000 $644,000 $459,900
$455,000 $435,000 $385,500 $415,000 $446,250 $405,000 $695,456 $606,921 $663,294 $509,574 $434,000 $645,500 $525,000
% Change
-4% 28% 28% 30% 27% 34% 11% 23% 24% 11% -11% 0% 14%
Midcoast Brunswick Topsham Harpswell Bath Phippsburg Georgetown Wiscasset Boothbay Waldoboro Thomaston Rockland
Saco Biddeford Buxton Standish Kennebunk Kennebunkport Wells York Sanford Waterboro
Q1 2021
Q1 2022
$371,700 $360,950 $305,000 $293,400 $486,300 $750,000 $382,500 $550,000 $243,250 $290,600
$358,000 $378,000 $310,000 $341,000 $579,000 $1,500,000 $451,250 $570,000 $277,251 $330,000
% Change
-4% 4% 1% 16% 19% 100% 17% 3% 13% 13%
Central Maine Q1 2021
Q1 2022
$328,900 $340,000 $450,000 $260,000 $375,000 $320,000 $272,000 $398,000 $197,500 $188,750 $217,500
$325,000 $425,000 $495,500 $357,500 $497,500 $485,000 $330,000 $495,000 $226,000 $251,000 $299,000
% Change
-1% 25% 10% 37% 32% 51% 21% 24% 14% 32% 37%
Augusta Hallowell Gardiner Belgrade Manchester Winthrop Readfield Vassalboro Dresden Whitefield
Q1 2021
Q1 2022
$178,750 $255,000 $185,000 $283,500 $364,000 $187,000 $275,000 $225,000 $202,000 $174,750
$208,000 $275,500 $205,000 $297,000 $332,500 $250,000 $280,000 $170,250 $344,200 $352,500
% Change
16% 8% 10% 4% -9% 33% 1% -24% 70% 101%
Lakes Region and Lewiston-Auburn Raymond Casco Naples Bridgton Harrison Sebago Oxford Poland Lewiston Auburn
Q1 2021
Q1 2022
$340,000 $260,625 $315,000 $254,500 $249,900 $242,250 $229,900 $290,250 $180,000 $185,000
$400,000 $370,000 $300,000 $311,400 $278,350 $383,950 $220,000 $310,000 $246,700 $225,000
% Change
17% 42% -5% 22% 11% 58% -4% 6% 37% 21%
Based on information from Maine Real Estate Information Systems, Inc. (d/b/a Maine Listings) figures pulled on April 4, 2022 for the period of January 1, 2021 through March 31, 2021 and January 1, 2022 through March 31, 2022
ABODE SALES FIRST QUARTER 2022
38 HOMES SOLD 22 HOMES PENDING
$27.7 MILLION in VOLUME