Lack of inventory hurt Maine home sales in September

Maine’s housing inventory crunch may have lessened in September, but it was not nearly enough to counter the high buyer demand and interest rates that have kept prices up and sales down since the start of the pandemic.

Just 1,410 homes changed hands last month, a decline of more than 25% from last September, according to data released Thursday by the Maine Association of Realtors.

The statewide median sales price increased by more than 14% to $376,750.

The median is the price at which half the homes sold for more money and half sold for less.

The overall number of homes for sale last month increased by 2% from August and was up slightly from the previous year. It’s a positive sign, but it’s peanuts compared to what’s needed.

An October report from the state and MaineHousing found that the total number of homes in Maine – not just the number of new homes being built – needs to increase by about 11%. The state needs to build up to 84,000 new homes in the next seven years to accommodate its existing population and the people expected to move to Maine.

“Our advocacy efforts at the Maine State House and local Town Halls are focused on the production of additional housing units. Whether through new construction or adaptive reuse, we are focused on creating a more balanced market regarding supply and demand,” said Carmen McPhail, president of the Maine Association of Realtors.

There were 3,855 homes for sale in September, a whopping 57% below the more than 9,000 in September 2019.

McPhail, who is also an associate broker at United Country Lifestyle Properties of Maine, said the number of buyers continues to outpace the number of sellers.

Last month, homes sat on the market for an average of nine days, but rising interest rates have tamped down some buying power. According to mortgage buyer Freddie Mac, the 30-year fixed-rate mortgage averaged 7.63% Thursday, among the highest rates in over 20 years.

McPhail urged prospective homebuyers to be patient, persistent, and positioned to act quickly when opportunities arise.

Nationally, sales dropped almost 16% compared with the same month last year and are down 21% through the first nine months of the year versus the same period in 2022.

The median price nationally increased 2.5% to $399,200.

Existing home sales nationally fell 2% last month from August to a seasonally adjusted annual rate of 3.96 million, the National Association of Realtors said Thursday. That’s just above the 3.9 million unit pace that economists were expecting, according to FactSet. But it’s the slowest sales pace since October 2010, when the market was still choked by foreclosures following the housing bust several years earlier, The Associated Press reported.

The trend was mirrored in New England, where sales fell 16.7% and prices climbed 5.2% to $439,000.

The Maine Association of Realtors also looks at three-month data in county-by-county comparisons to get a larger sample size of sale transactions. Between July 1 and Sept. 30, home sales dropped 21%, while prices rose about 10% to a median sales price of $375,000, compared to the same span the previous year.