Maine’s housing market continued to defy the state’s economic downturn in November, showing the biggest year-over-year rise in residential property sales of any month in what has been a tumultuous year.

The 1,965 single-family dwellings sold in November represent an increase of 31.2 percent from the same month a year ago, according to figures released Tuesday by Maine Listings, a subsidiary of the Maine Association of Realtors.

Coming off a record-breaking year for sales in 2019, Maine realtors saw the market contract in the early months of the pandemic, with April and May sales off by 15.4 percent and 21.3 percent of their 2019 volume, respectively. The pace picked up in June but remained 4.3 percent below the previous June.

“Those are the months when people typically will start to look and to buy,” said Tom Cole, president of the Maine Association of Realtors and managing broker of Better Homes and Gardens Real Estate/The Masiello Group in Brunswick. “This year, of course, things were different. Once we came into July, it really started to ramp up.”

Indeed, the number of statewide home sales rose each month from April through October this year and peaked in foliage season. Year-over-year sales rose 22.8 percent in September and 26.9 percent in October before an even larger jump in November.

October was the state’s highest-selling month on record, with 2,341 houses changing hands, after three consecutive years in which home sales reached their apex in August.

Reduced inventory, low interest rates and heightened interest from out-of-state buyers continued to drive prices higher, with the statewide median value jumping by 20 percent in November to $270,000 from $225,000 in the same month of 2019. The median indicates that half of the homes sold for more and half sold for less.

“One of the biggest drivers in the economy in Maine is real estate transactions and related services,” said Cole, who cited a statistic from a recent National Association of Realtors report estimating the economic impact to be $94,593 per home sale, on average, in Maine.

That figure takes into account commissions, fees, furniture purchases, expenses related to moving and remodeling, and a multiplier effect when contractors recirculate that money.

“Those people buy trucks, they buy things for their families,” Cole said. “That’s the ripple effect.”

Cole said most buyers already reside in Maine, but in-migration continues to rise. In November 2019, buyers from outside the state made up 26 percent of sales, but last month that percentage grew to 36.3 percent.

Dava Davin, owner of Portside Real Estate, said she knows potential buyers looking to relocate to Maine from higher-priced urban areas often have financial advantages over locals.

“They’re coming in with the ability to pay all cash,” Davin said. “They’re coming in with the ability to say, ‘I’ll waive the building inspection because I’ll be able to handle a $10,000 defect later.’ What is this going to do to local Mainers, local folks who are trying to live the dream (of homeownership)?”

A conversation with Charles Colgan, former Maine state economist and a professor emeritus at the University of Southern Maine’s Muskie School of Public Service, assuaged her concerns. Colgan said the pandemic disrupted traditional commuting patterns where people live in a dispersed sprawling pattern around a dense employment center. Remote working changed that, and vaccine or not, we aren’t likely to revert to the old ways anytime soon.

“How he explained it to me was that this is going to open up opportunities in different markets,” Davin said. “It won’t be that Mainers won’t be in homes, they’re just going to buy them in different areas and that’s totally healthy. We’re not losing out. We’re just shifting.”

In August, Andrew McDonnell and Devon Van Demark started looking to buy a home for the first time. They drove to Gray on Tuesday morning but realized the two-bedroom home they visited would not be large enough for a home office and potential children.

Engaged since May, the two Portland-area professionals are hoping to be in their own home before getting married next September. They have cast a wide net, from Wells to Buxton to Windham to Brunswick, with a price range of $350,000 to $450,000. Eight times they made offers.

“They were all approximately 12 to 15 percent above asking (price) and we have had no luck at all,” McDonnell said. “One offer wound up as third backup.”

Initially frustrated, McDonnell, 35, and Van Demark, 31, said they have learned to be patient in this red-hot real estate market. Low inventory – November’s unsold listings represented roughly 2.3 months’ worth of homes compared with 4.9 months in November 2019 – and an influx of deep-pocketed competitors who view Maine as a safe haven have combined to create ideal conditions for sellers, but rough sledding for buyers.

“Devon is a lot better about setting expectations,” McDonnell said. “The first house we lost, when we didn’t win, I was upset. I had already been making big plans. But now we’re in the groove of things. Honestly, we’re just hoping that come spring and with a vaccine that folks start getting more comfortable with moving again.”

The couple have been renting a house in South Portland for more than two years.

“I want something of our own so we can build equity,” Van Demark said. “Renting is the cost of a mortgage, essentially, and we’re not gaining anything. It’s hard to plant a garden or make (renovations) when you know you’re not going to be there for the long term.”

Colgan, the economist, said long-term renting may not be a bad option. Multifamily and rental housing is the way most urban areas manage affordability, he said.

“Renting has some disadvantages,” he said. “You don’t build the equity that is most people’s primary financial asset. But you can also take the money you’re saving and put it into some other equity.”

Nationally, November sales were up 25.8 percent from the previous November, with median prices rising 14.6 percent to $310,800, according to the National Association of Realtors. Total housing inventory shrank to 1.3 million units, enough to last 2.3 months at the current pace of sales.

Over a three-month period from September through November, sales rose throughout Maine’s 16 counties compared with the same stretch of 2019, with Washington seeing the biggest increase (80.3 percent) and Hancock not far behind at 68.5 percent. Lincoln showed the largest median price jump – from $225,000 to $360,000 – as well as a volume rise of 44.1 percent. Piscataquis showed the only price drop, from $129,900 to $125,900, while the other 15 counties all showed double-digit increases.

Cole said Maine remains on track toward its highest-ever annual sales volume. The 17,953 homes sold heading into December this year already surpassed the totals of 2018 and 2017 and are only 187 shy of last year’s total.

“Keep in mind 2019 was our best year ever,” Cole said. “Now it looks like we might eclipse 2019 by 8 percent, if everything keeps going the way it’s been going.”

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