Years ago, on a business trip to San Francisco, I told the cab driver I was from Maine. He replied with, “is that part of Canada?”
Well today, it’s safe to say that most everyone knows exactly where Maine is on the map. The Pine Tree State’s popularity accelerated during the pandemic, bringing in more out-of-state buyers and pushing real estate prices way up.
More people ‘from away’
While Mainers still make up the lion’s share of home purchases, the percentage of out-of-state buyers is increasing. According to the Maine Real Estate Information Systems (MREIS), 29.71% of single-family buyers in all of 2020 came from outside of Maine. In the first quarter of 2021, that percentage rose to 34.29%. That same data shows that for the past two years the top 10 states they moved from were, in order from highest, Massachusetts, New Hampshire, New York, California, Florida, Connecticut, New Jersey, Pennsylvania, Texas, and Virginia.
Where are they moving to?
While Maine-based buyers often have a certain town or neighborhood in mind, those from outside the state are looking for specific amenities. Given the pandemic, many of those coming from metropolitan areas are interested in moving more suburban. Close to an urban center, but where they can have lawns, swing sets, gardens and privacy.
Compared to where they’re moving from, towns like South Portland, Falmouth and Westbrook would be part of the metro region or even part of Portland itself. Many out-of-state buyers don’t care whether they are in Falmouth or Scarborough if they have proximity to the city and a home that provides the amenities they want. Price conscious buyers that don’t need quick access to downtown will go out even further. Others are more specific. Buyers with children are choosing towns where schools show higher test scores, and those for whom money is little object are choosing coastal, waterfront communities.
For the first quarter of 2021, MREIS reported a statewide median price increase of 14.41% over 2020 for single family homes. Over that same period, prices in Greater Portland — Cape Elizabeth, Cumberland, Falmouth, Freeport, Gorham, North Yarmouth, Portland, Scarborough, South Portland, Westbrook, Windham, Yarmouth — were up 20%. In Portland itself, the median sales price jumped 39% over last year. Why? While lower inventory and increased buyer demand were the primary drivers, an increase in buyers from outside the state drove it home.
These buyers come from larger markets where similar homes might sell for double or triple the asking prices in Maine. They often have reverse sticker shock. With cash from a recent sale and the ability to bring their remote city salary job with them, they’re prepared to pay well over-asking prices.
Most Realtors expect that upward trend to continue well into 2021, creating a seller’s market with low inventory, robust buyer demand, and competitive offer situations. With the proliferation of work from home opportunities and baby boomers choosing to retire and purchase second homes in Maine, our real estate prices, and the percentage of buyers from away will likely continue. Just how long is anyone’s guess, but for the moment, most in the real estate industry believe it could be a while.
Tom Landry, owner of Benchmark Real Estate and CornerStone Building and Restoration in Portland, is a Realtor in southern Maine and develops and renovates residential and mixed-use properties.