Housing
This section of the BDN aims to help readers understand Maine’s housing crisis, the volatile real estate market and the public policy behind them. Read more Housing coverage here.
Home values in Portland and other southern Maine cities are expected to grow slower over the next year than in other parts of the state, according to data from Zillow.
The real estate site predicts that while swaths of central and northern Maine, particularly the satellite communities around Augusta and Bangor, are expected to see growth of between 5 percent and 7 percent in home values by next year, southern Maine municipalities from Portland to Kittery will see between 3 percent and 4 percent growth.
While more homes have recently come onto the market in southern Maine, experts don’t think that’s what’s driving slower growth in home values. It’s more likely that demand is still increasing, but some buyers might be prohibited from entering the market because values and prices are already higher in this region.
“We may begin to see some leveling off … as buyers continue migrating north in search of affordability,” Dava Davin, founder and owner of Portside Real Estate Group, said.
Slower growth in southern Maine could not only be because people are shut out of the market. Many who are willing and able to relocate to these communities might have already moved there by now, suggested Jeff Levine, a former Portland city planner who now teaches at the Massachusetts Institute of Technology.
“The slower growth in demand Zillow projects is not a decrease in demand, but a slowing of how much that demand is going up,” he said.
If Zillow’s predictions are based on 2024, Derrick Buckspan, broker-owner of RE/MAX Shoreline, said that it’s not surprising that southern Maine forecasts may be a little slower. Right around the election, Buckspan said the real estate market really cooled.
“Typically, I find that when there’s big headlines and a big election, people just kind of hold off on making big decisions, housing being one of those,” the real estate agent said.
Buckspan remains optimistic about growth in the southern Maine real estate market this year, and said he was buoyed by an atypical wave of homebuyer activity in late November and December last year.
But the agent warned that interest rates that went back above 7 percent this week are still higher than buyers would like, something that could be barring more home buyers from entering the market, particularly in pricier regions like York and Cumberland counties.
“People are definitely feeling pain in the market over the rates being higher, there are some people being priced out. But for a lot of people that’s not dire, they can still do something,” Buckspan said.
