Maine home prices have recently shown signs of cooling, opening up more opportunities for prospective buyers – but the state’s lack of inventory threatens to ice them out instead.
Just 758 homes in Maine changed hands last month, a 30.5% decrease from December and a 35% decrease from January 2022, according to figures released Tuesday by the Maine Association of Realtors.
For-sale inventory remains historically low with 63% fewer homes on the market last month than in January 2020, before the pandemic.
The low sales numbers are the result of several factors, according to Carmen McPhail, 2023 president of the association: low inventory, high mortgage rates and the holiday season.
McPhail, an associate broker at United Country Lifestyle Properties of Maine, encouraged sellers to list their homes now, rather than waiting until spring.
“In most communities across Maine, buyers need more for-sale housing inventory,” she said. “Qualified buyers are searching now.”
Home sale prices have continued to creep upward and January marked the first time in several months that year-over-year prices again increased by double digits. The statewide median sales price for homes sold last month was $325,000, an 11.2% increase over the price in January 2022, but a decrease from the December median of $330,000.
The median is the price at which half the homes sold for more money and half sold for less.
The average rate in buyer contracts for a 30-year, conventional fixed-rate mortgage was about 6.28% in January, down from 6.4% the month before. Rates peaked at 7.1% in mid-November and have generally been declining since. The average rate in January 2022 was 3.33%.
Nationally, sales fell 36% from January 2022, and prices inched upward by less than 1% to a median of $363,100, according to the National Association of Realtors.
Similarly, regional sales fell 36% last month from the year before, while the median price in the Northeast rose by 0.3% to $383,000.
“Home sales are bottoming out,” said NAR Chief Economist Lawrence Yun. Parts of the country with lower home prices are seeing modest sales growth, he said, but in more expensive regions like the Northeast, sales are declining.
The national lack of inventory isn’t good, but Yun said there are positive signs the market is turning.
“Buyers are beginning to have better negotiating power,” he said.
Properties were on the market for an average of 33 days in January, up from 26 days in December and 19 days in 2022.
Yun said that homes that sit for more than 60 days can often be purchased for 10% less than the original list price.
COUNTY DATA
All 16 Maine counties experienced fewer sales, but five counties bucked the long-running trend and saw prices dip for the three-month period ending Jan. 31. (The real estate association also looks at three-month data for county comparisons to get a larger sample size of sale transactions.)
Prices fell 0.76% to 6.84% in Franklin, Lincoln, Piscataquis, Somerset and Waldo counties.
In Cumberland County, the median price was $450,000, an increase of 5.9% over the same period a year earlier, and the highest median price in the state.
Washington County saw the largest price increase, 22%.
From November 2021 through January 2022, Washington County homes sold for an average of $180,000. In the same three-month period this year, they sold for an average of $220,000.
Sales declined most sharply during that period in Lincoln County, which experienced a 44.5% drop from 148 homes to 82. Washington County also saw a substantial 43.5% decrease from 147 to 83 homes.
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