We’ve enjoyed a truly gorgeous stretch of fall weather – Indian summer at its best – but now, crews are covering the schooners, yachts are being hauled, and the harbors are emptying out.
To say that this has been an incredible year for real estate sales in the Midcoast would be an understatement. The wave of sales that engulfed southern Maine and the greater Portland area in 2020 headed Downeast over the winter and swept along the coast this past spring and summer. This activity absorbed the inventory at the top of the market and all brokers are now scrambling for new listings to show buyers, frustrated at missing out on deals and not finding the property that fits their Maine dream.
This was true for properties in all prices ranges. See the following chart.
As you can see, there’s been a dramatic increase in Midcoast sales both above $1M and $3M. We were pleased to do our share in both price ranges, especially with seven of the seventeen sales above $3M. There has also been a dramatic decrease in available inventory when comparing October 2021 to October 2020.
Overall, we have seen an approximate 30% “Covid” bump in value over the past 12 to 18 months, especially in the market under $3M. This is true for all our markets in rural New England. We are seeing buyers from our traditional market – the Boston to Washington megalopolis – as well as a new group from the western states who, looking into the future, have decided that the rural New England states are appealing; lots of elbow room, plenty of water, no extensive forest fires, and a civil society that appreciates privacy, community, and Yankee values.
Who knows when this market dynamic will change? At present, there is clearly a backlog of buyers who are ready, willing, and able to step up and purchase their Maine retreat. They are paying prices that many times have been higher than appraisers can substantiate; appraisers being constrained by a backward focus on sales.
Given the overall political dysfunction in the country with problems constantly appearing over the horizon, the legs of the ongoing market may be getting tired. On the one hand, societal and technological changes are fueling this ongoing movement to rural areas and on the other, a crash in the equities markets or other crises might bring everything to a halt. It appears that real estate may also have been riding the wave of liquidity provided by the Federal Reserve and this wave may be approaching the shore – there are lots of unknowns ahead.
With the lack of existing residential inventory, we would expect to see more interest in undeveloped waterfront land parcels as that sector has been lagging the market. Buyers are recognizing that patience is called for as all contractors are booked well into next year and are being selective regarding future projects – new builds or substantial remodels. Per-square-foot building costs and all development costs have also increased dramatically. This is helping to substantiate the value of existing residences, especially those that are well-designed, maintained, and in desirable locations.
This has been an exciting year for us with activity inland to Jefferson and along the coast from Surry and Blue Hill to South Bristol and islands in-between. We were very pleased to broker the recent sale of Sheep Island to a conservation-minded buyer who is working with Maine Coast Heritage Trust to preserve the island for public use into the future. Sheep Island is an undeveloped 60± acre island with lovely beaches located within sight of Owls Head Harbor. It is just south of 225± acre Munroe Island and north of 47± acre Ash Island, both of which are owned by MCHT and are open to the public with hiking trails and spectacular shorefronts to explore.
As always, we look forward to hearing from you if we can be of assistance.
Best Wishes for a Lovely Holiday Season,
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