Roccus7

Maine Real Estate Boom

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@PSegnatelli @Teepeerock, hope you gentlemen were able to find your dream house in Maine.  Looks like it'll be costing a bit more as of late.  

 

Maine home sales jump 23%, driven by out-of-state demand

 

By Glenn JordanStaff Writer October 22, 2020

Danielle Filosa closed on her dream house in Bristol late last month and moved in with her dog, Echo. Filosa, 29, had lived in Portland for two years starting in 2014 but returned to California after her father became ill.

Maine’s red-hot residential real estate market shows no signs of cooling, thanks in part to increased interest from out-of-state buyers.

 

Through the first nine months of 2020, sales of existing single-family homes were running 2.6 percent ahead of last year’s record pace, according to a report released Thursday by Maine Listings, a subsidiary of the Maine Association of Realtors.

 

The median price of Maine homes sold in September was $273,500 – a whopping 19.56 percent higher than during the same month a year earlier, when it was $228,750. The median price means half of the homes sold for more money and half sold for less.

 

In addition, sales volume went up by 425 homes, an increase of 22.8 percent from September 2019. The total number of Maine homes sold in September (2,291) is the highest of any month in recent memory, according to Tom Cole, president of the Maine Association of Realtors and managing broker of Better Homes and Gardens Real Estate/The Masiello Group in Brunswick.

 

Cole said demand is driven by historically low mortgage rates “combined with the allure of Maine’s quality of life and response to COVID-19 from across the country, while the supply of for-sale properties also remains historically low.”

 

“With more buyers than sellers in most markets, we are seeing strong competition, faster sales and increasing pricing,” he said.

 

The September sales data closed out a third-quarter rebound following a pandemic-induced pause this spring that saw sales in April, May and June drop below levels set in 2019, which turned out to be Maine’s highest year ever in terms of both sales volume and median price.

 

Even with the pause, the state had seen 347 more homes sold through the first nine months of this year (13,647 in all) than had been sold over the same stretch of 2019.

 

Cole said out-of-state buyers typically account for about one in four home purchases in Maine, but that ratio has risen to roughly one in three. Last month, 735 homes went to buyers from out of state, compared with 445 in September 2019.

HousingSales102220.jpg

One such out-of-state buyer is Danielle Filosa, who returned to Maine after four years living in Los Angeles.

 

Filosa closed on a home in Bristol in late September after writing a heartfelt letter to the seller, Peter Knauss, who had built the place himself in 1978 after taking a class at the Shelter Institute.

“Just a marvelous, sweet letter,” Knauss said. “It moved me to tears.”

 

Filosa, 29, had lived in Portland for two years starting in 2014 but returned to California after her father became ill. While on the West Coast, she started saving money and kept dreaming of one day putting down roots in Maine.

 

Her father’s death two years ago hastened that process, but her criteria (she wanted a pond on the property) and the fast pace of Maine’s residential market – “Houses I would look at, the next day they would be gone.” – worked against her.

 

Lauren Jones, associate broker with F.O. Bailey Real Estate in Falmouth, had been looking at homes online with Filosa since November. In August, Jones scheduled a day to visit five properties in person with Filosa, and shortly before her arrival, the house in Bristol appeared on the market.

20395436_20201022_DreamHouse_3-1024x683.

Danielle Filosa closed on her dream house late last month and moved to Bristol with her dog, Echo, from Portland, after writing a heartfelt letter to the seller, Peter Knauss, who built the house in 1978 after taking a class at the Shelter Institute.. Derek Davis/Staff Photographer

 

They saw it first thing one morning, and Filosa immediately wanted to cancel the rest of her tour. There are two ponds on the wooded 3.7-acre property, located not far from Pemaquid Point Campground.

 

“I walked in,” Filosa said, “and was like, ‘Yeah, this is it.’ It had this sense of a soul and purpose. It just kind of stole my heart.”

 

By evening, she had made a full-price offer of $335,000 and Knauss accepted it. He even showed up for the inspection, pointing out all the home’s quirks, and wound up installing a new heating system (swapping out propane for kerosene) to supplement the wood stove, and updating the water system as well, refinishing a floor in the process. Also at the inspection, Filosa presented Knauss with a friendship bracelet she had made, incorporating the home’s primary colors of brown, beige and green.

 

“Peter is such a kind person,” Filosa said. “He ended up fixing so many things that I didn’t even request.”

 

After the closing, Filosa’s mother treated everyone to a lobster dinner, including Kathy Leeman, the selling agent with Legacy Properties Sotheby’s International Realty based in Damariscotta. It was Leeman who had decluttered the home, which hadn’t been used as much since Knauss moved to New Zealand three years earlier.

 

“We became close friends,” said Knauss, soon to be 74. “We sort of went around Kathy, who told me this is not the way real estate generally works.”

20395436_20201022_DreamHouse_5-1024x683.

Danielle Filosa closed on her house in Bristol last month, but she sees real estate as more than just a financial investment. Derek Davis/Staff Photographer

 

Jones, who had sold real estate in New York City for three years before moving back to her hometown of Falmouth in December, said she has been involved in deals valued as high as $53 million in Manhattan.

 

“And this was the coolest transaction I’ve ever worked on in my life,” she said. “The whole thing was just a great Maine story.”

 

The July-through-September sales increases were most prominent in Maine’s rural counties. Franklin, Hancock, Knox, Lincoln, Somerset, Waldo and Washington counties all saw gains of more than 30 percent over the third quarter of 2019. Prices over the same third-quarter stretch rose in every part of the state, from a low of 9 percent in Aroostook County to a high of 27.6 percent in Washington County.

 

“Those numbers are not typical at all for rural Maine,” said Aaron Bolster, president of Allied Realty, with offices in Rangeley, Wilton and Skowhegan. “It has been the wildest ride ever in 2020.”

Bolster said Franklin County includes many single-family, owner-occupied homes in the county seat of Farmington, as well as a substantial number of second homes in and around the Rangeley Lakes region. He said both markets are equally strong.

 

“There’s so many buyers circling, waiting for a home to become available,” he said. “It creates this big excitement right when it hits. That’s why you’re seeing multiple offers, sight-unseen offers and offers above the asking price.”

 

Two years ago, in September 2018, the median price of a home sold in Maine was $215,000. The jump in value to the current $273,500 represents a gain of 27.2 percent. Over the same stretch, the S&P 500 stock index rose by 15.4 percent.

 

Across the Northeast, sales rose by similar levels, up 22.9 percent over September 2019 to go along with a 17.8 percent price increase to a median of $354,600. Nationally, sales in September rose by 21.8 percent compared with the same month a year earlier, and the median price of $316,200 reflected an increase of 15.2 percent.

 

Of course, real estate is more than merely a financial investment. Just ask Danielle Filosa and Peter Knauss.

 

“To go and do something this big and have it be this wonderful really solidified the feeling that it’s the right move for me,” she said. “I’ve told him he is always welcome here.”

Leeman has been selling real estate for a dozen years. She believes it can be helpful for buyers and sellers to meet and talk before closing, but had never seen such a friendship blossom so quickly.

 

“Of course we have this crazy market, so I almost didn’t know whether to trust whether she was truly as enthusiastic as she was,” Leeman said. “But the letter was just a real expression of Danielle, of who she was and what it meant to her.”

 

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Down here in Southern Maine it's a circus.   "Tear down" houses or those needing extensive renovations are going for over $400k.  Many sales are for over the initial asking price with several bidders involved.    It's only a matter of time that we'll be reassessed and see higher taxes.   My biggest problem is that many of these homes are being bought as rental properties and leased out by the week to people who have no respect for the neighborhood or the permanent residents.    

Edited by MartyK
correction

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21 mins ago, MartyK said:

Down here in Southern Maine it's a circus.   "Tear down" houses or those needing extensive renovations are going for over $400k.  Many sales are for over the initial asking price with several bidders involved.    It's only a matter of time that we'll be reassessed and see higher taxes.   My biggest problem is that many of these homes are being bought as rental properties and leased out by the week to people who have no respect for the neighborhood or the permanent residents.    

I'd hope that most of the Pandemic refugees will not be offering their properties for short-term rentals.  With prices rising, the lure of low price rental properties should dissipate.  But the re-assessments are a real issue.  At least at our recent re-assessments, the total value of assessed properties went up to cause a drop in the mil rate so it was pretty much neutral for me.

 

Regardless, from my view I hope that that "What happens in Southern Maine (Northern Massachusetts), stays in Southern Maine (Northern Massachusetts)"...

 

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25 mins ago, Roccus7 said:

Regardless, from my view I hope that that "What happens in Southern Maine (Northern Massachusetts), stays in Southern Maine (Northern Massachusetts)"...

Look at your chart.   While the baseline prices down here were inflated to begin with, the largest recent percentage increases are from up north.   

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1 min ago, MartyK said:

Look at your chart.   While the baseline prices down here were inflated to begin with, the largest recent percentage increases are from up north.   

Should have been more clear.  The re-assessments will come, but if the town is fiscally responsible, they'll keep the budget in line, which will offset the increased total town-wide assessment value by reducing the mil rate accordingly.  That's what happened here 3 years ago.  My assessed value went up by ~20%, but it was offset by the ~20% reduction in mil rate.  I actually saw a $55 decrease in my taxes that year.

 

Fiscally irresponsible towns/cities will keep the mil rate constant, plundering their taxpayers.  The more southern coastal Maine towns always seem to have their hands out...

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That I agree with.   Property around here goes up 20% and they drop the mil rate 10% and are proud of it.   Admittedly, it isn't so much the money I'm concerned about as much as the "element".  We're getting more obnoxious, entitled people who think those of us who have lived here much longer were put on earth to serve them because they now have bigger and better property, plus they supposedly come from more sophisticated areas.   They pull that crap on me just once.   

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36 mins ago, MartyK said:

That I agree with.   Property around here goes up 20% and they drop the mil rate 10% and are proud of it.   Admittedly, it isn't so much the money I'm concerned about as much as the "element".  We're getting more obnoxious, entitled people who think those of us who have lived here much longer were put on earth to serve them because they now have bigger and better property, plus they supposedly come from more sophisticated areas.   They pull that crap on me just once.   

ABSOLUTELY!!  The NY Post ran an article recently about the NY to ME exodus and the last line was a classic that PFAs have to heed...

 

One taciturn Mainer told The Post his opinion on the subject, if not his name. “We’re fine with people moving up here,” the long-time local drawled. “It’s just when they want to change everything that we could have a problem.”

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In 18 months those prices are going to come crashing back to earth once city folks realize winters are very very long and very very cold in the sticks.  They will pull the rip cord and run.   

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I can attest, our 800 sq ft cottage on an island was a god send this summer, with 3 little kids, amazing weather and no little league, dance, school, or CCD to keep them busy. We used and loved this place more than we probably ever will be able to again within a single season. I get why people want that... however, two places are now fore sale on the island for 2-2.5x what we paid 3 years ago our neighbors are “city folk” who paid top dollar this spring, who carry duraflames for the campfire and worry if the solar can support the toaster oven, hair dryer and microwave at the same time. I give them one more year, because Island life is pricey when all the chores are outsourced.  But it is waterfront for the common man.  
 

so Yes, this whole thing is an apparition, because the prospect of selling big is offset with having to buy bigger. You don’t get to win on both sides of the deal. It will fall as fast as it arose, once Nyc comes back to life, Sunday night traffic revitalizes, and Mills starts locking out folks again. 
 

thst said, the island is seasonal, have been looking for something for the winter.... places are selling on the day of listing for 20% rover asking, no contingencies and virtual (zoom) showings. It’s tough to keep up with the $$$ coming in as a common man. Should have pulled the trigger on a rental property LAST year. 

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I don't understand any of it.  Unemployment is the highest since the great depression.  Food prices are INSANELY hi, no one has a clue if they will have a job next week, and seriously?  Maine home prices have been increasing?  Please dumb that down for me.

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12 hours ago, MartyK said:

My biggest problem is that many of these homes are being bought as rental properties and leased out by the week to people who have no respect for the neighborhood or the permanent residents.    

 

Have fun with that.  A very fine way to really mess up a neighborhood.  

 

Best of luck. 

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Hi Scott, I will try, but I am sure I will ruffle a few feathers. 
 

Unemployment is high, in lower paying jobs. Hospitality, retails, etc. However, trades are BOOMING (try to get an plumber/electrician or builder on the phone). What is fascinating is these Impacted industries have adapted to online and takeout which is keeping the lights on, but without the cost. Profitability at the expense of less Human expenses.  
 

Corporate America, where everyone can work anywhere with a WiFi connection, is doing just fine, but it was a good excuse to clean house a little bit, but this combined with nearly free lending is fueling the stock market. 
 

Groceries are up but overall household spending is down 30% a month, it is in my house too. Less gas, dinners out, movies, shopping, so people have more cash on there hands because it is hard to go out and waste it. 
 

So, the people who have the jobs (corporate) now have the cash (+30%) a month, plus the stock market (sell high), but to me, the big differentiator is... people have TIME, there is nothing else To do. They have the time to stop and think about “what would be better than my 700 sq ft flat In Hoboken.  Hence, trades are busy because people have the time to think about all the stuff they deferred for years, second home real estate is up because people are saying “what can I do with my kids next summer”. People who can’t shop, travel, spend, etc are finding new hobbies and this is it. 
 

Now, these are not the waitresses and cashiers who are really feeling the pinch, but I suspect it was never really them anyway, it is now just a story of supply and demand. 
 

I am not a big subscriber to this concept, but this is the time that the rich are getting richer, and those are the ones that have the “over asking price, no contingency” resources to play with. 
 

 

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5 mins ago, TGIF Harpswell said:

Hi Scott, I will try, but I am sure I will ruffle a few feathers. 
 

Unemployment is high, in lower paying jobs. Hospitality, retails, etc. However, trades are BOOMING (try to get an plumber/electrician or builder on the phone). What is fascinating is these Impacted industries have adapted to online and takeout which is keeping the lights on, but without the cost. Profitability at the expense of less Human expenses.  
 

Corporate America, where everyone can work anywhere with a WiFi connection, is doing just fine, but it was a good excuse to clean house a little bit, but this combined with nearly free lending is fueling the stock market. 
 

Groceries are up but overall household spending is down 30% a month, it is in my house too. Less gas, dinners out, movies, shopping, so people have more cash on there hands because it is hard to go out and waste it. 
 

So, the people who have the jobs (corporate) now have the cash (+30%) a month, plus the stock market (sell high), but to me, the big differentiator is... people have TIME, there is nothing else To do. They have the time to stop and think about “what would be better than my 700 sq ft flat In Hoboken.  Hence, trades are busy because people have the time to think about all the stuff they deferred for years, second home real estate is up because people are saying “what can I do with my kids next summer”. People who can’t shop, travel, spend, etc are finding new hobbies and this is it. 
 

Now, these are not the waitresses and cashiers who are really feeling the pinch, but I suspect it was never really them anyway, it is now just a story of supply and demand. 
 

I am not a big subscriber to this concept, but this is the time that the rich are getting richer, and those are the ones that have the “over asking price, no contingency” resources to play with. 
 

 

+1

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13 hours ago, Roccus7 said:

I'd hope that most of the Pandemic refugees will not be offering their properties for short-term rentals.  With prices rising, the lure of low price rental properties should dissipate.  But the re-assessments are a real issue.  At least at our recent re-assessments, the total value of assessed properties went up to cause a drop in the mil rate so it was pretty much neutral for me.

 

Regardless, from my view I hope that that "What happens in Southern Maine (Northern Massachusetts), stays in Southern Maine (Northern Massachusetts)"...

 

If you are anywhere near Damarascotta then you are for all intents and purposes in Southern Maine. Anywhere near the coast is subject to the Southern Maine Syndrome you are describing. Every summer people eat up the Maine coast line, I guess you can't blame them thats why you emigrated. People have been steaming up from New York since way back: Sebago Lake, Rangeley, Campobello. 

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