Mainebiz Special Editions

V O L . X X X N O. X I X 18 Fact Book / Doing Business in Maine Q UA L I T Y O F L I F E H igher interest rates, changes in migration patterns, higher prices, less inventory — none of these factors stood in the way of a surging real estate market in Maine. roughout the past year, real estate has contin- ued to be hot property. Here is a look at some different real estate- related trends. The median home price in Maine breaks the $400,000 mark for the first time e median price of $406,000 during June was an increase of 5.45% compared to the figure for June 2023, according to Maine Listings. May's median sales price, $398,250, had previously been the highest recorded in Maine. Across Maine, 1,291 homes sold during June, a decrease of 10.03% compared to June a year ago. "For the fourth consecutive month, we're seeing a notable improvement in the number of homes for sale in Maine," said Paul McKee, president of the Maine Association of Realtors and a broker with Keller Williams Realty in Portland. It's been 35 months since the inventory of homes for sale surpassed the current level of 4,400. "While the number of sales is down in June, for the first six months of 2024 homes sales are up 2.4% compared to January through June 2023," said McKee. "e improving for-sale inventory level is good news for buyers." Nationwide, sales decreased 4.3%, comparing June with a year ago, according to the National Association of Realtors. Prices increased 4.1% to a national median of $432,700. Regionally, sales in the Northeast eased 6% while the median price rose 9.7% to $521,500. Affordable housing continues to be a concern for residents and employers Maine's housing shortage has hit a fevered pitch. MaineHousing said in its annual report that afford- ability remains one of the biggest challenges in meeting housing demands. Maine will need at least 84,000 new homes within the next seven years, the state housing agency said in a report that came out in October 2023. e housing agency said at least 38,000 homes just to meet the current demand. e figure exceeds the current inventory by 5%. In its report, MaineHousing doubled down on the goal of providing affordable housing. "e challenge of creating enough safe, warm and affordable homes for all Maine people has never been more daunting. e costs of building materials, labor, land and capital are all at historic highs. e latest U.S. Census data shows us that Maine continues to hold the dubious demographic distinction of being the 'oldest' state in the nation," Daniel Brennan, director of MaineHousing, wrote in his introductory letter in the annual report. He cited a bright spot: Maine's population is "rebounding as we see a steady uptick in people choos- ing Maine for their new home, drawn to our high quality of life and in search of something better for themselves and their children." Last year, MaineHousing's home-ownership department purchased $172.7 million in loans, or 820 total loans. e average loan was $210,611, while the average purchase price was nearly $230,000. "is allowed buyers to obtain properties in good condition and ready for occupancy," MaineHousing said in the report. It's harder and harder to find affordable houses. While Maine's median sales price topped $400,000 for the first time in June, Maine Listings data shows that the most expensive homes are in two of the most popu- lous southern Maine counties, Cumberland and York. In 2023, 751 units of affordable housing were added at a total of 19 projects, MaineHousing said in its annual report. is year 1,852 units are under construction. Significant funding for affordable housing is coming from various sources, MaineHousing said, citing programs like the Rural Affordable Rental Housing Program, created under Gov. Janet Mills' Maine Jobs and Recovery Plan. e program is part of an investment of $1 billion in American Rescue Plan funds for a wider range of economic develop- ment, including job creation. e first project coming to fruition under the Rural Affordable Rental Housing Program is 55 Weston Ave. in Madison — a project that has an added bonus of using insulation manufactured at the new TimberHP plant elsewhere in Madison. e American Recovery Plan also helped fund the Affordable Homeownership Program, which is using $10 million in funding channeled through the Maine Jobs and Recovery Plan. Also last year, MaineHousing awarded a contract to the Brunswick-based Genesis Community Loan Fund to assist municipalities, economic development groups, cultural organizations and others in developing new housing, particularly in rural areas. Luxury and 'turnkey' houses still fueling the housing market Despite the need for affordable housing, the sale of a three-bedroom "cottage" in Falmouth Foreside shows that Maine's housing market, though cooler, can still command high prices. e house, at 36 Old Mill Road, sold for $1.425 million, according to Benchmark Real Estate, which brokered the sale. Despite economic factors, Maine real estate continues to be hot property B y L a u r i e S c h r e i b e r a n d P e t e r V a n A l l e n MONTHLY MEDIAN HOME PRICES, 1 2010–2023 1 Sales of existing single-family homes, based on real estate broker transactions. S O U R C E : Maine Real Estate Information System Inc. $400K $350K $300K $250K $200K $150K $100K $50K $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

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