The number of homes sold in Maine last month fell compared with the previous October, but prices continued to rise due to an ongoing tightening of inventory.

Home sales in the state fell from 2,341 in October 2020 to 2,085 last month, a decrease of 11 percent, but prices rose by about 10 percent, from $280,000 to a median of $308,000, according to figures compiled by Maine Listings, a service of the Maine Association of Realtors. The median indicates that half of the homes sold for more than $308,000 and half sold for less.

Realtors say the supply of homes on the market began tightening over the summer, a trend that has continued into the fall, due at least in part to the fact that most homes get snatched up by eager buyers before they’re on the market long.

Demand has remained high, driven in part by out-of-staters buying homes in Maine. Many of those buyers have cited the ability to work from home in the pandemic and the desire for a more relaxed lifestyle among their reasons for deciding to relocate to Maine.

Aaron Bolster, broker/owner of Allied Realty in Skowhegan and president of the Maine Association of Realtors, said buyers from Massachusetts are helping to power the robust market in Maine.

Typically, out-of-state buyers make up about a quarter of Maine home sales, he said, but since the pandemic hit, that number has jumped to nearly 40 percent. He said at least 25 percent are from Massachusetts, where generally higher home prices give those relocating to Maine a lot of buying power.

Michael Sosnowski, owner of Portland-based Maine Home Connection, said at least some of those out-of-state buyers have connections to the state. For instance, he said, on Monday he had a closing for a waterfront home in Saco that was bought by a man and his wife from Massachusetts. The buyer, he said, had grown up in Old Orchard Beach and was eager to relocate here, paying $1.6 million for the house.

Sosnowski doesn’t expect the market to cool much over the winter, which is normally a slack time for home sales and purchases.

Inventories, he said, “have been at historic lows for some period of time” and demand isn’t slackening, meaning prices are likely to stay high. Sosnowski said the high end of the market remains strong, too, and that his agency has handled more properties than ever priced at more than $1 million.

Some potential buyers may have exited the market in recent months because prices were so high, he said, but they will probably come back in after the holidays.

Bolster agreed with Sosnowski and said the tight inventory is likely to keep the market going during the cold-weather months.

“This summer, I really think we were starting to gain in the number of houses for sale, but it was just a little uptick and then went the other way,” Bolster said.

Land sales for new construction are also strong, Bolster said, but contractors are so busy that it will likely be about two years before anyone buying land to build on can get a home built, so that’s unlikely to have a big impact on the overall market in the short term.

In Maine and elsewhere, he said, housing remains tight because developers pulled back during the Great Recession more than a decade ago and never really charged back.

“We’ve under-built homes for so long since the Great Recession” that the national market is about five million homes short of demand, Bolster said.

In October, there wasn’t a great variation in the slowdown in home sales around the state, although two counties – Aroostook and Kennebec – posted modest increases in transactions during the three months from August through October. Median prices increased in all 16 Maine counties during that period, ranging from 3.6 percent in Lincoln County to 34.2 percent in Piscataquis County.

Nationally, home sales fell 5.8 percent in October compared with the same month a year ago, and the median sales price rose 13.5 percent to $360,800, the National Association of Realtors said. In the Northeast, sales declined 13.8 percent and the median sales price rose 6.4 percent to$379,100.

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