Thursday, April 24, 2014
The number of existing homes sold in Maine surged during July, outpacing gains seen in previous months.
SOUTH PORTLAND — Sales of existing single-family homes in Maine surged more than 31 percent in July over the same month last year, outpacing strong gains in both the Northeast and nationally for the same period.
In this 2011 file photo, a sale pending sign is set outside a house in Bath, Maine. Sales of existing single-family homes in Maine surged more than 31 percent in July 2013 over the same month last year, outpacing strong gains in both the Northeast and nationally for the same period. (AP Photo/Pat Wellenbach)
Prospective buyers who had been on the fence were motivated to buy by rising mortgage interest rates, Realtors said.
In July, 1,426 homes were sold in Maine, up from 1,086 homes sold in July 2012, according to data released by Maine Listings, a subsidiary of the Maine Association of Realtors.
The gains in July far outpaced the 6.4 percent year-over-year increase in June and the 17 percent increase in May.
Maine's median sale price -- half the homes sold for more and half for less -- increased 4.86 percent to $179,000.
For the three-month period from May 1 to July 31, 3,967 homes were sold in Maine, an increase of almost 18 percent over the same period a year ago.
In York County, sales rose 20.6 percent, while sales in Cumberland County rose 17.8 percent.
Elizabeth Liscomb of Durham had been trying to sell her custom, 4,000-square-foot home in Durham for about a year, but prospective buyers didn't show strong interest until April and May.
"Activity and interest really picked up in the spring," Liscomb said. "The right buyer came along. You have to have a lot of patience and listen to your real estate agent because they know the market."
Nationally, sales in July were 16.4 percent higher than last year. The median sale price in the U.S. was $214,000, a 13.5 percent increase over 12 months, according to the National Association of Realtors.
Sales in the northeastern United States jumped 20.3 percent over last year and the median sale price rose 6.7 percent to $271,200, according to the National Association of Realtors.
"Sellers have reacted strongly to buyer interest this summer, and have placed homes on the market at a steady pace. Homes that are priced according to the local market continue to sell faster than others who are 'testing' the market waters," said Bart Stevens, president of The Maine Association of Realtors. "Buyers continue to be price sensitive and want the fairest deal possible."
Home sales that closed in July went under contract in April and May, when families often shop for new homes in the hope of moving during the summer school vacation, said Ed Gardner, a broker with Ocean Gate Realty in Portland.
"This new market surge we've seen in the late spring and early summer was driven by the perfect storm of low inventory, relatively low interest rates and buyers sitting on the fence until now," Gardner said. "We're seeing a mix of first-time home buyers and resales as people trade up. There's a domino effect as the higher-end home market opens up and people are able to trade up."
Liscomb needed to sell her home for family reasons. She wanted to move to Bar Harbor to be closer to her mother, who recently moved to an assisted living facility. The buyer of her home was moving to be closer to family in a nursing home.
"We're seeing a lot of 'sandwich generation' families making moves to juggle family responsibilities. People are moving for a variety of needs and reasons," said Tina Lucas of Lucas Real Estate in Portland.
Some home buyers have been spurred to buy before interest rates climb any higher, Lucas said.
According to Freddie Mac, the national average rate for a conventional 30-year fixed-rate mortgage rose to 4.37 percent in July, up from 4.07 percent in June. The rate was 3.55 percent in July 2012.
Homes sales could slow if interest rates continue to climb, but low inventories of homes for sale should keep prices rising, according to National Association of Realtors Chief Economist Lawrence Yun.
"Mortgage interest rates are at the highest level in two years, pushing some buyers off the sidelines," Yun said. "The initial rise in interest rates provided strong incentive for closing deals. However, further rate increases will diminish the pool of eligible buyers."
Interest rates have risen amid speculation that the Federal Reserve might rein in its efforts to stimulate the economy.
Still, Stevens, owner/broker with Century 21 Nason Realty in Winslow, said sales activity in the fall in Maine generally remains strong and he expects the market to continue to move along at a "comfortable pace."
Staff Writer Jessica Hall can be contacted at 791-6316 or at: