Crazy 3.0

As Kenneth Roberts never said, the future is trending into Maine real estate.

BY SOFIA VOLTIN

There used to be a saying,” says realtor John Hatcher of e Hatcher Group. “Ten showings, ten days, and no o ers? en the house is overpriced. I think this still holds up, with exceptions if the house is totally singular and unique, or in terrible condition.”

Impatience has streamed through the real estate market for the past three years. A seller’s anxiety may skyrocket if the rst weekend passes with no o ers in hand. Worries escalate when they’re reminded of when the neighbor’s house sold in less than a day last June. Buyers have been through the wringer, too, and are eager for this market to shi ey’re on the edge of their seats, waiting for prices to drop and the power balance to swing in their favor. Luckily, Maine real estate experts predict the housing market will nally stabilize in 2023, balancing out between buyers and sellers.

Carmen McPhail is an associate broker with United Country Lifestyle Properties of Maine, and the newly elected president of the Maine Association of Realtors. “ is market isn’t going to change into a buyer’s market overnight,” she says. “Yes, home values are decelerating. But they’re not depreciating. ere’s still a surplus of buyers.”

“And we have even less inventory,” Hatcher says. “ ere’s still a backlog of people who’ve been waiting to nd inventory, and we just don’t have enough. We’re still seeing multiple o ers on homes priced under $400K in Cumberland County.”

“ e big story is we’ll see fewer homes trading in 2023,” says Dava Davin, founder and CEO of Portside Real Estate Group. “In 2020 and 2021, Maine saw a surge in sales due to a variety of factors related to COVID.”

With few homes on the market and an abundance of quali ed, eager buyers, “ ere has been a year-over-year increase in prices,” Davin says. “In 2022, the sale price of single-family homes rose by 13 percent compared to the previous year, following a 20 percent increase in 2021.” In the years leading up to 2020, a 3–6 percent increase in value year to year was average.

Now, Hatcher says, “in Portland and South Portland, the National Association of Realtors predicts an increase up to 10 percent by the same time next year.”

“Overall, the market in Maine has remained strong, with prices reaching record highs,” Davin says. “ e intensity of the market will so en. It will become less competitive, with homes remaining on the market for a bit longer, fewer instances of bidding wars, and more contingencies built into the o ers.”

Managing Expectations

Sellers still think they can put their house on the market and safely receive 10 percent above asking,” Hatcher says. But a change of perspective is needed as we enter this new market. “ ey need to understand that market was unsustainable.

is doesn’t mean sellers missed the boat. It may not be the frenzy of multiple o ers, but we’re still going to see the list-to-sale-price ratio exceed 96 percent. e house may sell overnight, or it may take 2–3 months.”

“ e great news for sellers is that home prices remain at an all-time high and haven’t yet decreased,” Davin says. “Homes that are well-maintained and appropriately priced are likely to sell quickly, and cream-pu listings will still become the subject of bidding wars.”

“Purchasing a home is becoming more pleasant,” Davin says. “Home prices are stabilizing, and the slowing pace of the housing market will be a welcome change.”

McPhail says, “It’s good for both buyers and sellers. Sellers can list their proper- ty without worrying about nding their next home, while buyers will have more inventory from which to choose.”

Davin considers the most recent challenges facing buyers: “It’s increasingly important for buyers to consult with a lender to nd the best options for their speci c circumstances. Some creative solutions, such as seller-paid points or closing costs, and adjustable-rate mortgages, may be available to help o set the higher interest rates.”

The national average interest rate for a 30-year xed mortgage was about 3.5 percent at the beginning of 2022. Early this year, it opened at 6.5 percent. Hatcher says, “I’m hearing a lot of people say they’re going to wait for interest rates to drop back down to 2.5 to 3 percent. ey won’t. ose numbers aren’t something we’re going to see again anytime soon.” According to tradingeconomics.com, the rate “averaged 5.42 percent from 1971 un- til 2022, reaching an all-time high of 20 percent in March of 1980 and a record low of 0.25 percent in December of 2008.”

“ e increases we see now are moderate when viewed over the long run,” McPhail says. “From a historical perspective, today’s rates are still good.”

Hatcher says, “Interest rates may still be at 40-year lows, but houses are also at 40-year highs in price.”

“Buyers and sellers are adjusting,” McPhail counters. At the end of the day, “the right time to sell your home is when you’re ready. A more balanced market may mean a lower price for your home, but it also means a better price for your next purchase.”

Hatcher says, “ is business isn’t like a lot of other industries. People need housing. ere’s an old saying in real estate: there’s no time better than now, if you can a ord to do it.” n cummingsprinting.com

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