Real Estate Spotlight - A New Normal?

Real Estate S P O T L I G H T May 2022 | Vol. 58

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Volume 58 - May 2022 Issue Editorial by: Chris Lynch Design & Graphics by: Dana Whitney

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Edited by: Chris Fortunato Andy Lynch Joanna Buffum

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For a more detailed Market Analysis, please contact your Legacy Properties Sotheby’s International Realty sales associate.

Nothing Compares.

The New Normal?

Are we ready to accept that the current Maine real estate market conditions are indicative of a “new normal?” Is there actually a definition of normalcy that could be broadly applied and accepted or is it just a touchpoint along the up-cycle and then again for the down-cycle? My sense is that normal (“old normal”) is a concept supporting near-perfect conditions with affordable mortgage rates, stable prices, supply/demand equilibrium, ample inventory, seasoned product with 30 +/- days on market, and consistent results with comparable sales to support pricing. At the moment, the only condition we still enjoy, at least for now, is historically attractive mortgage interest rates.

When it comes to market cycles, Maine is usually at the end of the line.

Historically, we have had the benefit of market information from New York and Boston before such trends actually reach us in Maine and New Hampshire.

Given the massive shift in consumer behavior primarily driven by the pandemic, de-urbanization, and now the proliferation of the remote workplace, it is nearly impossible to create an apples-to-apples market comparison based on the past.

The prevailing market dynamic is simplistically characterized by the fact that there are too many buyers in Maine chasing too few homes for sale. While this has been the case for some time, when we analyze daily, monthly, quarterly, and

annual sales statistics, each period, both current and historical, is influenced by uniquely disruptive elements such as restrictions, mandates, openings, closings, and the like. These disruptive elements make data analytics less useful.

We have done extensive research and analysis on the changing dynamics with respect to capital flows into Maine for real estate purchases. In my last newsletter, I looked at where the money was coming from by state and some of the notable changes in the last few years. This month, I would like to highlight another interesting and statistically significant change in our evolution toward a new normal.

Looking back to 2019, it is safe to say that 2019 was a terrific year for Maine and New Hampshire real estate. It was a relatively “normal” year with an assist from rapidly plunging mortgage rates, which pushed the market to new alltime records for unit sales and dollar volume. As I refined the numbers for the first quarter of 2022, I was struck by the dramatic downdraft in the dollar value of real estate sold in coastal counties when compared with neighboring counties to the north and west. For Q1 2019, Maine coastal counties accounted for $76 of every $100 spent on real estate statewide, and more than 50% of the total was targeted at coastal cities and towns. In sharp contrast, only 69% of all dollars were spent in the coastal counties and 46% in the coastal communities in Q1 2022. For perspective, the capital flows to non-coastal

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counties grew by more than $80 million in the first quarter alone, which is reflected in the rising prices experienced in northern and western Maine.

A long-used real estate cliche that value is all about “location, location, location” still carries the day as a key component, but somewhat less so as our market evolves. Interestingly, access to reliable high-speed internet is now among the most sought-after amenities on a homebuyer’s list.

Privacy is also a top buyer desire and tends to be more difficult to come by in the coastal cities and towns. Buyers are substituting beautiful lake and pond locations for more historically desired ocean-related properties.

Furthermore, affordability has become a very significant issue for many who would have been previously destined for one of Maine’s coastal towns.

The relative rise in prices has been consistent, with average selling prices showing significant double-digit increases since 2019. But, the relative increase in the average home sales price in Maine is not the only important factor to consider. The average selling price statewide for Q1 2022 was $383,000, compared to the Q1 2019 average of $251,000.

That is a 52% rise between comparable time periods. The gap between statewide numbers and coastal towns has also increased as the average sales price in coastal communities for Q1 2022 rose to $596,000.

The last major factor in the migration of capital away from the coast is the availability of inventory. The supply and demand imbalance has been most exaggerated in the southern and eastern counties and communities. The first quarter is typically the low point in the inventory cycle, and this year was no exception. I am pleased to report that we have recently seen an uptick in new listings more consistent with expectations and seasonal cycles. We are hopeful that this will have a moderating effect on the extreme market gyrations and push us closer to a welcomed market equilibrium. We are still on a path to finding a new normal and it is unclear when we will find it, but we are clearly not there yet.

It has never been more important to have a strong agent represent your interests in pursuing your real estate goals. If you are not currently working with an agent from my team, I would be happy to make an introduction. Please contact me at clynch@legacysir.com.

Warm regards,

President/Owner Legacy Properties Sotheby’s International Realty

Source: Maine Real Estate Information Systems, Inc. (d/b/a Maine Listings).

SELLING THE MAINE LIFESTYLE

Founder Chris Lynch Talks “Selling the Maine Lifestyle” on Chalmers Podcast Chris Lynch, the Legacy Properties Sotheby’s International Realty Founder and President, is featured on the latest episode of “The Community Cast,” a podcast by Chalmers Insurance focusing on in-depth explorations of local leaders and business owners who are giving back to their communities.

In the newest episode “Selling the Maine Lifestyle with Chris Lynch,” host Dottie Chalmers Cutter, the fourth-generation owner of Chalmers Insurance Group, discusses the history of Legacy Properties Sotheby’s International Realty from its founding back in 2006 with

just six agents, to the present day as the third largest real estate company in Maine with more than eighty agents and six offices across the state.

Lynch, originally from Massachusetts, was introduced to Maine as a student majoring in Economics at Bates College. After nearly two decades working on Wall Street, he decided to relocate his family to the coastal community of Cape Elizabeth, Maine, falling in love with the wide range of outdoor recreation and infrastructure to raise his four children.

He recognizes Maine as a global lifestyle destination, and touts the ease of accessibility to amenities like golf courses, beaches, and ski resorts, and the coveted local foods like blueberries and lobsters.

Listen to the episode on the Chalmers website, Apple Podcasts, and Audible.

Chalmers Insurance has locations in Maine and New Hampshire and is a fourth-generation, family-owned, independent insurance agency with a history that stretches back 165 years.

With access to more than 3,500 miles of Atlantic oceanfront, 6,000 lakes and ponds, and mountains with world-class skiing, Legacy Properties Sotheby’s International Realty is uniquely positioned to help you find your dream home in Maine. Simply put, we have the premier portfolio of Maine real estate and waterfront properties for sale.

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Our most recent digital issue received over 250,000 unique impressions.

To receive a copy, either in print or electronically, please email collection@legacysir.com.

3D VIRTUAL TOURS Welcome to the always-open house. Our immersive Matterport 3D Virtual Tours transport you into the finest selection of Maine Luxury Properties and let you explore like never before. Use Dollhouse view to see a whole property at once, switch to floorplan view for a traditional top-down perspective, or walk through like you’re there in person. Our Matterport 3D Virtual Tours are unlike any other real estate virtual tours. They are the most realistic, cutting edge, and comprehensive way to experience a property online. Click on any of the thumbnail images below to experience the Maine Lifestyle from the comfort of your own home.

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651 North Shore Road, North Haven | $6,450,000 Brian Wickenden 207.975.9650

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878 Shore Road, Cape Elizabeth | $5,500,000 Lois Lengyel 207.233.2820

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299 Drexel Lane, Islesboro | $5,000,000 Brian Wickenden 207.975.9650

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65 Lambert Point, Freeport | $3,690,000 Alexa Oestreicher 207.329.9307

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95 Pumpkin Cove Road, Bristol | $2,750,000 Kathy Leeman 207.504.68661 & Cristina Stirratt 773.910.0359

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58 Langsford Road, Kennebunkport | $2,550,000 Betsy Coughlan 207.229.3661

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15 Olympic Drive, Falmouth | $1,800,000 Linda MacDonald 207.749.1215

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9 Granite Point Road, Biddeford | $1,795,000 Bill Gaynor 207.468.3002

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692 Upper Ridge Road, Bridgton | $1,500,000 Sandra Wendland 207.233.7788

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97 & 99 Lopaus Point Road, Tremont | $1,400,000 Nicole Richardson 207.479.7551

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186 Foreside Road, Cumberland | $1,395,000 Linda MacDonald 207.749.1215

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293 Drexel Lane, Islesboro | $1,300,000 Michael Lynch 207.558.3131

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1317 Trim Lane, Islesboro | $1,300,000 Michael Lynch 207.558.3131

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879 Anderson Road, Sebago | $1,250,000 Tammy Ruda 207.831.3164

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550 Ledge Road, Yarmouth | $1,100,000 Marika Clark 207.671.6927

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152 York Street, York | $1,095,000 Mary Jean Labbe 207.337.3661

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12 Elm Street, Kennebunkport | $998,000 Randal Simon 207.590.9656 & Rosane Hirschy 207.467.5792

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00 Hupper Island, Saint George | $995,000 Aaron Crossman 207.322.6638

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18 Beach Road, Lincolnville | $949,000 Kristin Heal 207.542.8890

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62 Black Sparrow Drive, Portland | $875,000 Sandra Wendland 207.233.7788 & Elise Kiely 207.838.1050

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22 Nubbin Reach, Yarmouth | $875,000 Elise Kiely 207.838.1050

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167 Ridge Road, Lisbon | $849,000 John McCarthy 207.522.3638

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19 Glad Farm Road, Saint George | $750,000 Elizabeth Banwell 207.747.9308

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75 Main Street, Richmond | $725,000 Kristie Jorgenen 207.200.5082

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81 Wallentine Road, Bowdoinham | $650,000 Joane Tait 207.751.4124

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555 Gardiner Road, Dresden | $650,000 Joane Tait 207.751.4124

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336 A Oceanville Road, Stonington | $650,000 Laura Farr 207.348.1200

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335 Cape Rosier Road, Brooksville | $599,000 Laura Pellerano 207.266.2941

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47 Bourne Avenue, Wells | $597,500 Jim Nadeau 207.337.3687 & Jane Chase 207.351.7529

GLOBAL REACH REAL ESTATE EXPERTS IN EVERY MARKET The Sotheby’s International Realty network is comprised of more than 25,000 sales associates located in approximately 1,000 offices in 79 countries and territories worldwide. Our listings are marketed on the sothebysrealty.com global website and on local affiliate websites across the world in the markets from which our buyers are coming. This global exposure not only affords our listing clients the widest possible distribution to the highest number of qualified buyers, but it allows all of our clients access to the most experienced and accomplished real estate experts in whichever town, city, or country they may have needs.

THINKING ABOUT A MOVE?

Let us help you find the right agent through our global network at Sotheby’s International Realy. For more information call 207.780.8900 or email info@legacysir.com

THANK YOU FOR YOUR TRUST AND SUPPORT. for all homes sold over $5,000,000 in Maine for all homes sold over $2,000,000 in Maine for all homes sold over $1,000,000 in Maine for all homes sold over $600,000 in Maine

for all waterfront sales in Maine

Legacy Properties Sotheby’s International Realty attributes its success to offering its clients a very strong package of marketing services including: professional photography, Matterport 3D Virtual Tours, glossy print advertising, global property distribution through its exclusive network of agents, and luxury branding through its affiliation with Sotheby’s International Realty.

*Based on information from the Maine Real Estate Inf ormation System, Inc. (d/b/a Maine Listings) for the period 01/01/2021 through 12/31/2021

RENTALS

Maximize Your Home’s Income

There is incredible demand from guests seeking to vacation in Maine and we are looking for outstanding new properties to add to our portfolio of the finest luxury rental homes in all of Maine.

We provide a full-service rental experience, including professional photography, cutting edge Matterport 3D Virtual Tours, unmatched global luxury branding, marketing and distribution, and dedicated support.

Contact us today for an analysis of your home and to discuss how we can help maximize your rental income.

Visit us at luxurymainerentals.com to view our exceptional luxury rental homes or contact Scott E. Dobos, Director of Rental Operations, at rentals@legacysir.com or 207-370-5479 for more information.

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FEATURED LISTING 651 NORTH SHORE ROAD NORTH HAVEN $6,450,000