Fewer Maine homes sold for more money last month as high demand and low inventory continued to drive up prices even as real estate professionals say there are signs the state’s red-hot residential market might be cooling down.

Maine real estate agents sold 1,143 homes in April, a decrease of almost 21 percent from April of 2021, the Maine Association of Realtors reported Thursday.

April marked the 10th consecutive month of year-over-year sales declines, and seven of those months also showed a decline in homes for sale, said Madeleine Hill, president of the association and designated broker at Roxanne York Real Estate in Harpswell.

“The supply and demand for single-family housing is out of balance,” she said.

The homes that did hit the market last month sold for 25 percent more than in April 2021. The statewide median sales price for homes sold last month was $346,000. The median indicates that half of the homes sold for more money and half sold for less.

In Cumberland County, the median price was just shy of $500,000 for the three-month period ending April 30 – an increase of 20 percent from the same period a year earlier.

The Realtors Association also looks at three-month data for county-by-county comparisons to get a larger sample size of sale transactions.

March and April saw a slight uptick in for-sale listings, which Hill said is a sign that some of the squeeze on the market might be loosening.

“An increasing supply will continue to address the pent-up demand and may relieve some of the upward pricing pressures,” she said.

The number of homes sold between January and April of this year was higher than during the same period in 2019, she noted, which was the state’s top year for real estate sales prior to the coronavirus pandemic.

“Despite the constrained for-sale inventory, Maine’s real estate markets continue to be strong due to sustained demand,” Hill said.

Nationally, home sales declined by about 6 percent in April compared with a year earlier, while the median sales price rose 14.8 percent to $391,200. April marked 122 consecutive months of year-over-year price increases, the longest-running streak on record, according to the National Association of Realtors.

Across the country, the housing supply is improving but at a sluggish pace, said Lawrence Yun, chief economist for the national group.

“The market is quite unusual as sales are coming down, but listed homes are still selling swiftly, and home prices are much higher than a year ago,” he said.

Yun expects that sales will continue to fall as higher prices and mortgage rates deter buyers. The prime rate for mortgages has increased by three-quarters of a percentage point since January and now sits at 4 percent. More increases are expected in the coming months.

“We’ll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two years,” Yun said.

In the Northeast, though, the number of sales bucked the nation’s downward trend and instead rose 1.5 percent compared with April 2021, while the regional median sales price rose by about 8 percent to $412,100.

SIGNS MARKET IS EASING

Jane Millett, a real estate agent with Re/MAX Riverside in Topsham, said everything still seems to be full steam ahead, but that it may be easing soon. 

Anecdotally, Millett said she’s heard some homes are sitting on the market longer before getting snapped up, and she expects to see more inventory as Maine transitions into the warmer months. 

At the very least, Millett believes prices will start to hold steady rather than continue the dramatic increases the industry has seen over the past few years.

Derrick Buckspan, a RE/MAX Realtor in Portland, said he’s noticed more sellers reducing their list prices, something typically not seen until the fall, when houses are harder to sell.

It’s a difficult figure to get hard data on, he said, but it indicates that market dynamics may be shifting and prices may soon come down.

Inventory remains a problem, though Buckspan said he’s seeing the inventory deficit decreasing a little.

Foreclosures are rising in Maine and across the country – an anticipated increase following the end of an emergency foreclosure moratorium last July – which could add some housing stock back into the market.

The number of home foreclosures in the state jumped by 23 percent last quarter, with foreclosure filings involving 373 properties between Jan. 1 and March 31, according to real estate tracking company ATTOM. Foreclosure activity is still only at about 57 percent of what it was in the last quarter before the moratorium began, ATTOM said.

Though the foreclosures will add some inventory, Buckspan doesn’t think they will make much of a dent in the market overall.

“Maine is one of the toughest states to foreclose in,” he said. “It still felt like such a small part of our market (during the recession) in ’08 or ’09, I have a hard time envisioning (foreclosures will have) a big impact in Maine.”

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