Marcus Groff bought his cozy Ogunquit cottage 10 years ago for $315,000.
Built in 1965, it isn’t much at just 600 square feet. But it is just steps from Footbridge Beach in one of the most desired towns along Maine’s southern coast. Inventory is so scarce that the location alone guarantees it’ll sell for far more than it was worth a decade ago.
Earlier this month, Groff listed the property for $825,000. There are many more of these modest homes that have long dominated Maine’s coastal towns on the market for $1 million or more. Real estate agents and landowners say it marks a generational shift from family owners to wealthier ones who are likely to tear these homes down to build anew.
“Going back a few years, there have been probably four or five [homes] I can think of right on Ocean Street where there was a purchase and then a teardown, or a drastic addition and modernization,” Groff said.
On either side of his cottage, Groff said homes of a similar age have been torn down and rebuilt. One sold for $1.3 million in cash despite no working electricity or plumbing.
That trend has rendered the neighborhood largely unrecognizable in just a decade, he said. The value of a typical Ogunquit home soared by nearly 132 percent from 2014 to 2024, which was among the largest increases in the area, according to Zillow. In May, that typical value sat at $915,000.
It’s a similar situation in Saco, where agent Jim Keithley’s listing on Ferry Beach is a “rare find” as one of only two waterfront properties for sale in the city, he said. The 870-square-foot home is on the market for $829,000, even though it can only be used for three seasons. It was built in 1951 and last sold in 1994 for only $113,000, according to local property records.
“This has been in the same ownership for 30 years. They don’t come along very often,” Keithley, who works with eXp Realty and is also a reporter for WMTW, said. “The big expensive ones being built, they come and are obviously well over a million dollars. But even the seasonal cottages are pushing a million nowadays.”
Another cottage Keithley sold around the corner from his current listing was bought within four days of it being listed sight unseen by people from Connecticut. He said local families may be having a hard time affording taxes and insurance, but families from away see it differently.
“To them, $800,000 is a bargain,” he said.
If these properties are maintained rather than being bought, torn down and rebuilt by new, wealthy owners, they are often rented out. Most people who have expressed an interest in the cottages to Keithley and Groff ostensibly want to make them short-term rentals.
“The market is so crazy, anyone who isn’t independently wealthy is looking for the kinds of properties where rentals can cover their own finances,” Groff said.
That might be due in part to the high costs of new construction, suggested Peter McPheeters, a listing agent with OceanView Properties, Inc.. McPheeters, who has listed a $1.1 million cottage near Middle Beach in Biddeford, said that home sales in these areas have been treated like land sales for all 40 years he’s been in the Maine real estate business.
There’s also the fact that most people who are looking to tear a property down and rebuild it probably aren’t going to announce those intentions at a home’s showing. That said, “a lot” of prospective homebuyers have at least asked about the possibility of expansions, Keithley said.
Though nobody’s asked Groff about that yet, he’s not convinced the option’s off the table.
“When you look at the price point, it begs the question if that isn’t the end game, regardless,” he said.
