Mainebiz

W W W. M A I N E B I Z . B I Z 25 J U LY 2 6 , 2 0 2 1 F O C U S R E A L E S TAT E / C O N S T R U C T I O N / E N G I N E E R I N G How Maine stacks up Maine makes up a significant portion of the New England housing market, with 2,697 building permits through May, compared to 16,040 for the six- state region as a whole, or 16.8%. Massachusetts has far and away the largest share of new housing, with 7,800 permits issued. At least in New England, Maine leads Connecticut (2,139), New Hampshire (1,933), Vermont (864) and Rhode Island (607). Nationally, with 2,697 permits issued through May, Maine falls short of Mississippi (3,810), Kansas (3,730), New Mexico (3,647) and South Dakota (3,127), but ahead of Montana (2,301), the District of Columbia (2,231), West Virginia (1,858), North Dakota (1,459), Hawaii (1,398), Wyoming (947) and Alaska (663). Maine has seen a surge of new residents in the past 18 months, as people look for safer, more wide open areas to raise families and/or ride out the pandemic. While Mainers are still the leading buyers of existing Maine homes, according to Maine Listings, out-of-state buyers surged in from Massachusetts, New Hampshire, New York, Florida and California. Maine's hot market for existing homes is creating more pressure for new construction. Home sales were up 28% through May, matched by a 28% increase in the median home price, according to Maine Realtors. e median price is now $305,000. No slowdown this year At least for this year, the housing boom shows no sign of slowing down, though both In Maine and nationally, new construction has been hampered by high lumber costs and shortages of certain materials. e price of certain plywood, including oriented strand board — the particle board used for the basis of roofs, sheathing and subfloors — has gone up fivefold, the National Association of Home Builders reported in mid-July. Amid the building boom in south- ern Maine, Falmouth was already reaching its cap of 65 housing permits in April, as Mainebiz reported. Longer term, Damicis, who stud- ies demographics and the economy, says the fate of the housing boom will likely rest on several factors, including interest rates and the availability of construction workers. "How high it goes is difficult to predict but it will be tempered by pro- jected moderate growth [nationally] in the economy over the next five years, rising interest rates," he said. "Also some of the rapid increase is a surge following lack of supplies to build and lack of people putting their homes on the market. Some of this will recede as areas now open up. Jobs and employ- ment are more stable and more people may be willing to make a change and put their house on the market." A shortage of construction workers Both Damicis and Lawton said the building boom will have trouble matching the numbers from the early 2000s because the number of con- struction workers has struggled to get back to levels seen at that time. Maine consistently had more than 30,000 construction workers during the ear- lier building boom, but that number fell to 24,100 in 2009, according to the Bureau of Labor Statistics. Most recent BLS numbers show Maine has 27,700 construction workers. "e housing bust after 2005 dev- astated the construction industry in Maine," said Lawton. "Many went out of business, some moved away. e 'go to college' mantra cut enrollment in trade programs, thus exacerbating the demographic imbalance." But by 2020, "the stay-at-home impact of the pandemic added to the demand in Maine — particularly southern Maine," Lawton said. "I think the pressure to build will con- tinue to grow and that the shortage of workers will continue to push prices up and that the pressure to fill labor shortages will continue to struggle with the NIMBY attitude of many neighborhoods and towns will con- tinue to force prices up." P e t e r Va n A l l e n , M a i n e b i z e d i to r, c a n be r e a ch e d a t p vanal l e n @ mainebiz.biz and @ MainebizEditor SUCCESSFUL PROJECTS START FROM THE GROUND UP ME 207-286-8008 • NH 603-427-0244 • MA 508-623-0101 WWW.RWGILLESPIE.COM CONSTRUCTION MATERIALS TESTING AND INSPECTIONS Soils, asphalt, concrete, masonry, fireproofing, and steel: Reduce potential delays, defects, unexpected costs, and repeated maintenance. ENVIRONMENTAL CONSULTING Groundwater, landfills and tank removal monitoring GEOTECHNICAL ENGINEERING AND EXPLORATIONS You see what's on top, we'll show you what's below. Serving Maine and New England Since 1974. 207-725- 4304 P O U L I N C O N S T R U C T I O N M E . C O M C O N V E N I E N C E S T O R E S R E S TA U R A N T C O M M E R C I A L / P U B L I C R E TA I L C U M B E R L A N D FA R M S WAT E R B U RY, C T How high it goes is difficult to predict but it will be tempered by projected moderate growth [nationally] in the economy over the next five years, rising interest rates. — Jim Damicis Public policy expert

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