2020 condo market in Portland ‘took off like a skyrocket’

Real estate professionals are hoping for a strong 2021, but fear supply will not be able to keep up with demand. Contributed / Maine Listings

A year ago when they were forced to suspend showings of condos, real estate broker Elise Loschiavo and many of her colleagues thought the pandemic might bring their sales to a halt.

But as Loschiavo, an associate broker with Vitalius Real Estate in Portland, soon found that wasn’t the case.

“Many of us in the business thought we’d seen the last sales of the year in March. To the contrary, once the state allowed condo sales to resume in late April, the market took off like a rocket,” she wrote in her Portland Condo Report: 2020 Market Review and 2021 Forecast.

Fifty-four fewer condos were sold in Portland in 2020 than in 2019, but those on the market, both on and off the peninsula, went for higher prices. That was also the case for single-family home sales in the city.

In 2020, the 334 condos sold averaged 10 fewer days on the market. The average sale price for units on the peninsula increased 8% from $445,000 to$480,500, and the average off-peninsula condo sale price rose 6.5% from $270,000 to $287,500.

“Although single family homes saw the most price gains and the fiercest competition, off-peninsula condos saw a nice 14% bump in price per square foot. We believe this is due to a new COVID-fueled desire for larger condos with outdoor space and room for a home office,” Loschiavo’s report reads.

New condo construction was down in 2020, with only 20 new units constructed in downtown Portland, a decrease of 60 from 2019.

“Last year if it wasn’t already under construction, it got delayed,” Loschiavo told the Forecaster.

The inventory of condos is low right now, but Loschiavo expects more than 175 new units to go on the market this year, including 31 at Verdante at Lincoln Park, 86 at Hobson’s Landing, 21 at Stevens Square, 16 at Hammond House and 23 at The Goodwin.

“We expect a push to list condos during the normally ultra-hot sales season in April and May, and robust condo sales through the end of the year,” Loschiavo wrote.

She said she is already seeing that increased sales activity since she released her report last month.

“The demand has been overwhelming,” she said. “Everything I put on the market in the past month has gone for well above asking price with multiple offers.”

That high demand is reflected throughout the state’s real estate market.

Overall, 2020 was “a year like no other for residential real estate in Maine,” said Aaron Bolster, president of the Maine Association of Realtors.

“The sales year ended with historic highs for the number of reported transactions (19,921) and median sales price ($256,000) since we began compiling data more than 20 years ago,” Bolster said in the Maine Real Estate Statistics – December Housing Report.

Statewide, residential real estate transactions were up by 1,781, or 9.8%, more than the 18,140 reported in 2019 and nearly 11.5% and 13% more than in 2018 and 2017, respectively.

Activity in Cumberland County was less intense, with only a 1% increase in real estate transactions (4,130 versus 4,086 in 2019). That, Bolster said, is due to the limited supply of homes on the market in the county. According to Maine Home Connection, single-family home sales in Portland were down last year, falling from 596 in 2019 to 547. The median sales price, $362,000, increased by $33,000 over 2019 figures.

The median price of a single-family home in the county, however, rose a bit more dramatically, increasing by more than 12%, or $40,000, going from $325,000 in 2019 to $365,000 in 2o2o. By comparison, the median home prices in Cumberland County in 2019 increased by 5.3% or $18,000.

The fact that 14 of the 16 Maine counties saw double-digit growth in median home sale prices Bolster said, was something he has not seen before in his 21 years in real estate.

Large appreciation, he said, is typically seen in the southern or coastal parts of the state.

“When you see that in rural parts of Maine that’s astounding. That just doesn’t happen,” said Bolster, broker/owner of Allied Realty in Skowhegan.

Bolster said he expects another strong year for real estate transactions, but “the issue will be this year, the supply will not be able to keep up with the demand.”