Brian DuBois of DuBois Realty Group stands outside an Auburn home that went under contract before the home was even offered on the public listing. DuBois said low inventory of homes for sale is driving a good market for sellers. Daryn Slover/Sun Journal
AUBURN — Travis Bashaw’s most recent listing hit the market on a Thursday. Within 72 hours, it had hosted 10 showings, received five offers and sold for well over the asking price.
For Brian DuBois of DuBois Realty Group, a home recently went under contract before it had even been officially posted. Both of the homes are in Auburn, in a county that had seen minimal growth in the preceding years.
“I’ve sold real estate for 32 years, and I’ve never seen it like this,” Steve Morgan, a Lewiston-based agent with Maine Real Estate Pros, said.
Many expect the official numbers to grow even more as summer sales figures are released, but anecdotal evidence is piling up that the typically tight southern Maine housing market is creeping northward into Androscoggin County.
According to local real estate agents, the recent activity has been caused by a convergence of factors heightened by COVID-19: limited inventory on the market, a pent-up demand for affordable homes, and the ability to work from home, which is luring out-of-state buyers or those priced out of southern Maine.
Between April 1 and June 30, the median sale price in Androscoggin County ($191,500) rose nearly 14% while statewide growth was 6%.
“That’s incredible,” said Bashaw, an Auburn-based agent with Better Homes and Gardens/The Masiello Group.
He said the large jump in sales prices compared to a year ago is a “direct reflection of qualified buyers competing for limited inventory, resulting in homes selling for over list.”
That means multiple offers on homes within days — so much that most agents are now using offer deadlines (“all offers due by Sunday at 5 p.m.”) to make the process more clear.
While overall sales are down in Maine so far this year compared to 2019, sale prices are up. DuBois said when statewide figures from July are released later in August, he expects to see an even bigger jump in local prices.
Morgan sells homes in a large swath between Lewiston-Auburn, the Portland area and the Brunswick area. He said while homes have been selling quickly in Cumberland County for years, it’s now happening in Lewiston-Auburn.
“It’s come right up into Androscoggin County, and it’s crazy. Crazy is the thing to say,” he said.
Tom Cole, president of the Maine Association of Realtors, said that while the statewide numbers have not yet reflected a surge of out-of-state buyers — it’s still hovering around 25% — he expects they will in the coming months.
Cole believes people with plans to eventually move to Maine are “accelerating that process” due to COVID-19 and the ability to work remotely. And they’re adding to the already stiff competition from Maine residents.
“It’s almost a perfect storm for real estate in Maine,” he said.
COMPETITION
Cole, as president of the statewide association, said he checks in routinely with regional presidents. Some are seeing things they’ve never seen before, and in places like Lewiston-Auburn, Augusta, Waterville and Bangor.
“In really a whole section of Maine, it’s amazing how much activity there is,” he said. “Some are telling me they’ve never had to call before arriving at a property to make sure it’s still on the market.” Now they make sure they do.
Cole said he’s had recent clients make several offers on homes in the Lewiston-Auburn area, “some of them just crazy numbers,” and they still didn’t get them.
DuBois said depending on the price point, but typically under $300,000, “it’s really an aggressive market right now.”
“Especially for a new buyer, they might lose out on two, three, four properties before they realize they have to go at it differently,” he said. “The idea that you’re going to pay more than list price is just beyond a lot of people’s comprehension.”
DuBois said the sheer number of offers on each home is forcing buyers to “get creative,” because offering list price, or even over, might not make the difference.
“You may be offering over list price and still lose out on the bid because your competition is being more creative,” he said.
That means considering things like the length of the closing period, inspection timeline, a personal letter, and more. Due to historically low interest rates, DuBois said appraisers are inundated with requests for refinancing, making turnaround times for closing more difficult.
Morgan said he’s been working with a young woman who has already bid on three houses, including two offers over the asking prices, and has still lost out.
“I’m competing on almost every offer, and it’s been that way for the last two to three months,” he said.
Morgan said people are starting to look into Androscoggin County because “they understand the market,” and its pushing them to find locations outside southern Maine. Commutes are less of an issue, and buyers might be looking somewhere that they are less likely to get outbid.
Shanna Cox, president of the Lewiston-Auburn Metropolitan Chamber of Commerce, said the market conditions in the area are based on a combination of factors that escalated as the pandemic unfolded.
“The tightening of the market in southern Maine was underway before the pandemic. As more people spend more time at home, they are investing in their physical spaces and looking to move. We are seeing an influx of interest from other states to Maine, which is impacting the market all over the state,” she said. “While some are choosing L-A from out of state, a lot of pressure is coming from people priced out of the southern market and looking to buy in the L-A region where their dollars go further.”
Cox also said Maine’s favorable COVID-19 numbers are increasing the out-of-state interest, with the low case count working as “an advantage as people pick vacation spots, areas of respite for remote work, and to relocate.”
“We have heard some reports of families seeking to bring their kids to get educated in Maine, where they believe there is a higher chance of in-person education than their home state, which has higher cases,” she said.
Travis Bashaw of Better Homes and Gardens/The Masiello Group stands outside an Auburn home under contract. Bashaw, of Auburn, said about 40% of his clients are from the Portland area looking to buy a home in the Lewiston-Auburn area. Daryn Slover/Sun Journal
LOW INVENTORY
The other major factor that keeps coming up among real estate agents is the low number of homes on the market, which has amplified competition.
Bashaw said that from a seller’s perspective, “if their house is maintained, priced and marketed correctly, it will sell.”
But, the limited number of homes on the market raises the possibility of homeownership becoming unattainable for potential first-time home buyers, seniors looking to downsize, or those on lower incomes — an issue familiar to southern Maine.
Cole said Lewiston-Auburn, like other parts of Maine, has seen population growth but not many new housing units built, which compounds the inventory problem.
“The challenge that it creates is where is the affordable housing stock for first-time home buyers?” DuBois said. “I don’t know what the answer is.”
As of late July, there were roughly 30 single-family homes for sale in Auburn. DuBois said that’s “like nothing” compared to a typical summer.
He argued that Androscoggin County, and Auburn in particular, should find ways to make single-family development easier, because “there’s no question of demand.”
Bashaw said he’s not sure it’s more difficult for a first-time home buyer, but said “any qualified buyer, no matter the type of financing, has to be aware that there are likely to be multiple offers, especially on well-priced homes.”
Just this week, the Auburn City Council began a discussion on housing growth, and possibilities for rezoning areas that could be dedicated to housing development — a discussion that became a recurring theme during the city’s Agriculture and Resource Protection Zone amendments last year.
Officials agreed that with the demand for houses very high, and little on the market, it’s difficult to attract those considering relocating to Auburn.
“For several years the council and I have believed that Auburn is a premier place to live, work and play, and it’s gratifying to know that others feel the same way as shown by the increase in demand,” Mayor Jason Levesque said. “Our job now is to help build opportunity for more folks to build, buy and develop all levels of housing throughout our city.”
In the weeks ahead, the council will consider options such as allowing development on back lots, allowing a second principal structure on residential lots, tiny homes, cottage units and accessory dwellings.
Several councilors said that as the city considers development options, it must also consider the cost of services.
For real estate agents, there’s some anxiety about the lack of inventory coupled with a continued recession.
Morgan said when the pandemic hit in March, the real estate industry was bracing for catastrophe. Agents were nervous, then the market “just took off,” he said.
Looking ahead, however, he’s worried about a cliff. He said he’s been in the business long enough to know that the market fluctuates and that the prices may not keep rising forever.
He even told his son, who is hunting for his own single-family home, that he might want to wait a year to see how the market progresses.
“I’m a little nervous about a collapse of this market,” he said. “But on the other hand, he wants to be on his own and have a bigger space and I understand that. It’s human nature.”
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