Fewer homes in Maine sold for more money last month as high demand and low inventory continued to push prices up, even as real estate professionals say there are signs the state’s red-hot housing market may be cooling.
Real estate agents in Maine sold 1,143 homes in April, down nearly 21 percent from April 2021, the Maine Association of Realtors reported Thursday.
April was the 10th consecutive month of year-over-year sales declines, and seven of those months also saw a decline in the number of homes for sale, said Madeleine Hill, president of the association and designated real estate agent at Roxanne York Real Estate in Harpswell. .
“The supply and demand for single-family homes is out of balance,” she says.
Homes that went on the market last month sold 25 percent more than in April 2021. The statewide average sale price for homes sold last month was $346,000. The median indicates that half of the homes were sold for more money and the other half for less.
In Cumberland County, the median price was just $500,000 for the three-month period ended April 30 — a 20 percent increase from the same period a year earlier.
The Realtors Association also looks at three-month data for county-by-county comparisons to get a larger sample size of sales transactions.
March and April saw a slight uptick in for-sale listings, which Hill says is a sign that some of the market pressure could ease.
“Increasing supply will continue to meet pent-up demand and may ease some of the upward price pressures,” she said.
The number of homes sold between January and April this year was higher than the same period in 2019, she noted, the state’s peak year for real estate sales ahead of the coronavirus pandemic.
“Despite limited inventory for sale, Maine real estate markets remain strong on the back of continued demand,” Hill said.
Nationally, home sales fell about 6 percent in April from a year earlier, while the median sales price rose 14.8 percent to $391,200. April marked 122 consecutive months of year-on-year price increases, the longest-running streak on record, according to the National Association of Realtors.
Across the country, housing supply is improving, but at a slow pace, said Lawrence Yun, chief economist for the national group.
“The market is quite unusual as sales are falling, but the houses on the list are still selling fast and house prices are much higher than they were a year ago,” he said.
Yun expects sales to continue to decline as higher prices and mortgage rates deter buyers. The prime rate for mortgages has increased by three quarters of a percentage point since January and is now at 4 percent. More increases are expected in the coming months.
“We will likely return to pre-pandemic home sales after the remarkable increase over the past two years,” Yun said.
In the Northeast, however, sales countered the country’s downtrend and instead rose 1.5 percent compared to April 2021, while the regional median sales price rose about 8 percent to $412,100.
SIGNS MARKET IS LIGHTING
Jane Millett, a real estate agent at Re/MAX Riverside in Topsham, said things still seem to be moving at full throttle, but it might slow down soon.
Anecdotally, Millett said she’s heard some homes are on the market longer before picking up, and she expects to see more inventory as Maine moves into the warmer months.
At the very least, Millett believes that prices will remain stable rather than continue the dramatic increases the industry has seen in recent years.
Derrick Buckspan, a RE/MAX real estate agent in Portland, said he has noticed more sellers dropping their list prices, something usually not seen until the fall, when homes are harder to sell.
It’s a difficult figure to get hard data on, he said, but it indicates that market dynamics may shift and prices may fall soon.
Inventory remains an issue, although Buckspan said he sees the inventory shortage easing slightly.
Executions are on the rise in Maine and across the country — an expected rise after the end of an emergency deferral moratorium last July — which could bring some more housing stock to the market.
Foreclosures in the state jumped 23 percent in the past quarter, with foreclosure filings involving 373 properties between Jan. 1 and March 31, according to real estate registrar company ATTOM. Foreclosure activity is still only about 57 percent of what it was in the last quarter before the moratorium began, ATTOM said.
While the foreclosures will add some inventory, Buckspan doesn’t think they’ll put a big dent in the market overall.
“Maine is one of the most difficult states to foreclose,” he said. “It still felt like such a small part of our market (during the recession) in ’08 or ’09. I can’t imagine (forcibles will have) a big impact in Maine.”
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