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V O L . X X I X N O. I I I F E B R UA R Y 6 , 2 0 2 3 24 C O M M E R C I A L D E V E L O P M E N T M EREDA's 2023 Real Estate Forecast Conference offered a mixed look at the real estate market for the year. Coming off two red-hot years, the real estate forecast becomes a bit more nuanced going into this year. Construction companies and brokers are busy, projects are underway, deals are still being made, but higher interest rates, tight inventory across the real estate spec- trum, fluctuating construction costs and uncertainty in the economy all bring a measure of caution this year. This year's conference, held at the Cross Insurance Center in Portland on Jan. 26, had a crowd of 750-plus attendees, who were there for the showcase and more than a dozen presentations. "I love seeing you all here," MEREDA President Craig Young, a partner and broker at the Boulos Co., said in his opening remarks. "There's just a buzz in the air." Single-family market expected to level off B y P e t e r V a n A l l e n A fter two crazy years characterized by bidding wars and escalating home prices, the housing boom has already peaked and this year is expected to continue to level off. Dava Davin, principal at Portside Real Estate and presenter of the sec- tor analysis for the single-family home market, said Maine's median home price peaked in June 2022, at $360,825, driven by the pandemic-related buying frenzy. Just five years ago, the median home price was $200,000. She said her office started to see showings taper off by August, and with interest rates spiking above 7% by late year the market cooled noticeably. What didn't cool off were prices. Sellers, she said, are still seek- ing top dollar. Going into the year, she expects strong demand in towns that have seen buying action — much of it in southern Maine, where the median home price is $475,000 — and much of it will be cen- tered around "cream puff listings" that are move-in ready. By contrast, with houses that need work or are less desirable, brokers are seeing listings expire. "If it's going to sell, it's going to sell fast," she said. "Other places are sitting." For this year, she expects to see prices level off. Demand will be steady because there's too little inventory to satisfy the need for housing. She expects fewer transactions than the past two years. She also said there's positive signs that interest rates may head back down into the 5% territory. About 1 in 3 buyers are from out of state. Massachusetts buyers lead the charge, accounting for 8% of the overall market. With the higher home prices, she said "many Mainers couldn't afford the home they live in," which means there are fewer people making lateral moves to other homes. Where people used to move every seven years, that's now every 10 years, she said. Multifamily market still strong — and benefitting new cities B y P e t e r V a n A l l e n P ortland has had a strong multifam- ily market in recent years, but the outlook is somewhat murky. Brit Vitalius, owner of Vitalius Real Estate Group and the presenter of the multifamily home analysis, said rents in Portland at the high end are $3,300 to $3,500 a month. but the higher end of the market is slowing. e middle and lower market, from $1,200 to $3,000, is still tight. On the development side, Vitalius said investors are still cautious after the passage of the Green New Deal, P H O T O / A L E X I S W E L L S Mixed preview of 2023 offered at MEREDA conference Higher interest rates, tight inventory and volatile construction costs present challenges MEREDA hosted more than 750 people at its annual Real Estate Forecast Conference, held at the Cross Insurance Center in Portland. F O C U S

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