Maine housing market shows signs of cooling with July sales down 5 percent

By Lori Valigra, Bangor Daily News Staff

Existing home sales in Maine showed signs of cooling in July, even though sales outpaced pre-pandemic numbers, according to data from state and national real estate groups.

About 2,000 Maine homes changed hands in July, down almost 5 percent from the previous year, according to data released Monday by the Maine Association of Realtors. The median sales price was $315,000, up almost 24 percent compared to last July. The median sales price means half of the homes sold for more than that price and half for less.

That’s the third month in a row in which the sales and median price saw year-over-year gains slow. Sales still are ahead of pre-COVID-19 numbers, up 7 percent compared to July 2019.

Kennebec, Piscataquis and Somerset counties all saw sales decline from May through July in 2021 compared to 2020. Knox County saw sales rise 40 percent in the three-month comparison period and the median sales price rose 50 percent to $360,000, both the highest numbers in the state.

Prices across the country grew by double digits for most of the past year and while still high, they are growing more slowly as home inventory rises. There still is a shortage of homes for sale. 

“Having a lot more inventory is the key ingredient towards restoring balance to the market,” George Raitu, senior economist at the real estate website Realtor.com, said. “We’ve had so many buyers get tired of the continual bidding wars and property price escalation clauses.”

But with a cooler market, he expects buyers, especially those purchasing homes for the first time, to have more housing choices in the fall.

In Maine, single-family sales listings were up almost 8 percent in July compared with June and up 67 percent from the inventory low in March of this year, the Maine association said. Demand for homes in Maine still outpaces the number of homes for sale, so prices are rising, Aaron Bolster, president of the association, said.

Nationally, the inventory of unsold homes nationally increased 7.3 percent to 1.32 million from June to July, according to the National Association of Realtors. Properties stayed on the market for 17 days in July, the same as in June.

Existing home sales in the U.S. rose 2 percent on a seasonally adjusted annual rate from June to July, according to the association. The median existing-home price rose almost 18 percent to $359,900 in July compared to the previous year.

There still are too few starter homes, although first-time buyers accounted for 30 percent of sales nationally in July, Lawrence Yun, chief economist at the association, said. Individual investors or second-home buyers bought 15 percent of the homes, up from 14 percent in June, with all-cash sales making up about one-quarter of the transactions.