The Portland, Maine, housing market should increase at a very high rate compared to national averages. In the past, slowing increases have worried buyers and sellers. It's important to understand if you're dealing with a balanced market or have a low inventory of homes for sale. Today, you'll learn more about that.
Portland Housing Market Trends
The metro areas of Portland and South Portland could likely see a median price increase of 10.3 percent for existing homes. Realtor.com released its 2023 Housing Forecast to showcase this number. Overall, the predicted growth is only second behind Worcester, which is in Massachusetts. Likewise, it's one of the 100 largest metro areas in the country.
Despite the high ranking, projected increases for Portland real estate won't see what it did when the pandemic came to play. There are modest estimates that reinforce a cooling period in the market.
Most Maine home sales are slowing because prices are increasing, and there's a limited inventory. Plus, recent mortgage surges are now forcing sellers to lower home prices and expectations because buyers have less power and are hesitant to jump. However, investors with their financials in order could get on the bandwagon and scoop up real estate for great deals.
Factors Affecting the Portland Housing Market
There could be positive signs for investors hoping to gain their footing in the Portland area. However, they must understand the factors that might affect the market here and in the future.
Median Sales Price
The Maine Association of Realtors released home sales data for Cumberland County in November of 2022. It shows that the median price in the three months increased by 11.5 percent over that same period of 2021. However, the number of units sold declined by 19.7 percent.
Realtor.com indicates that there will be a 23 percent national increase for inventory in 2023 and beyond. However, Maine real estate agents don't feel that it will be anywhere in Maine. There's simply no inventory available.
Larger markets do have developers willing to build full neighborhoods and offer incentives to buyers, but that won't happen in Maine. In fact, developers are hesitant to build here because they're afraid buyers won't have the money available.
Tie that in with fewer people wanting to move from Portland, and you have a conundrum. There are higher interest rates, so downsizing might give a higher monthly mortgage payment, and no one wants that headache.
Sellers will think harder before deciding to sell, and the limited inventory brings prices up. Open houses will be few and far between.
Downtown Portland isn't the most expensive neighborhood, but it's up there at $895,000. If you want to be in the East End, you're looking at prices of over $1 million. However, the West End isn't too bad at $517,000.
The least expensive area is North Deering, and homes are often listed for $430,000 or more.
Will the Housing Market Crash in Portland?
Overall, experts feel that the market will slow down, though it's not likely to crash because there's so little supply. In a sense, it's a housing bubble because of the inflated home prices, high mortgage rates, and low inventory.
When this happens, it could take years for the bubble to pop, but it will happen. That still won't crash the housing market, but it will lower prices exponentially. Buyers might want to wait, especially if they're looking for rental properties.
Portland Housing Market Statistics
- The Maine Association of Realtors saw the median price rising six percent year-to-year in June 2020, which meant homes were about $250,000.
- Benchmark Real Estate owner, Tom Landry, claims that the housing market could crash because it's unfriendly toward buyers and sellers. Likewise, the Benchmark Real Estate owner believes that there's a standoff between both parties, which should continue throughout 2023.
- There should be a 6.4 percent decrease for home sales in 2024, though there are no specific estimates for prices or sales volume.
- The average rent price for a Portland apartment is sitting at $1,495. There's no change for the market compared to previous years.
- The median listing home price per square foot is $625.
Housing Market Predictions
Most experts are expecting a tepid market in 2023. There's less demand and inventory, so you're seeing fewer homes for sale. Those that are on the market will take longer to move in most cases. However, there will be a few cities and states that will increase sales because of where they're located.
Portland Housing Market Predictions
Demand is pretty low for Portland homes compared to last year, 2022, and 2021. Likewise, the average price has gone up. Therefore, people think it's a frenzy right now, and it's hard to say what the rest of the year might bring.
Renting is at an all-time high because many homeowners are afraid they won't be able to make their mortgage payments. However, with the demand, there aren't enough places to rent. This trend should continue upward, though investors might have to focus on foreclosures or even new builds to make it work.
Buying and selling a home is challenging, and it's even more so in Portland, Maine. The average price is extremely high compared to last year, and there are expected to be fewer homes available. Renters are still prevalent, but they have nowhere to rent.
Should I Invest in Portland Real Estate Now?
If you're financially stable, this could be the best time to purchase a house or build an apartment complex.
Will the Real Estate Market Values Continue Falling?
It's possible. If mortgage rates continue rising and houses stay on the market longer, the values will drop. This might be great for real estate investors, but it's hard to say right now.