The last few years of the southern Maine real estate market have been dizzying. Looking back to 2018, the median sale price for single-family homes in Cumberland County was $307,488. Today, the median sale price is nearly 60% higher, with 2022’s median sale price closing out at $491,500.
For those of us who have called Maine home for many years, or for generations, this increased demand makes sense. Lifestyles in Cumberland County are highly desirable, offering a “best of both worlds” scenario of urban settings and stunning landscapes. Maine residents have access to beaches and boating, quiet trails for hiking, historic and trendy neighborhoods near downtown life, fine dining, and cultural events.
When we sift through more recent statistics about residential sales, there is no doubt that the housing market is cooling down to varying degrees. This past December, new listings were up 5.1%, as compared to December 2021. However, new listings were down 24.6% from November 2022. Likewise, closed sales were down 34.7% over this time last year, and have fallen 16% since November 2022.
Competition for certain properties has diminished. In 2022, listings spent more time on the market before going under contract, than in the previous year. What remains to be seen is if this is a return to a cyclical pattern or if broader economic forces are nudging the real estate market in a new direction.
Mortgage rates peaked at over 7% last year, diminishing buyers’ purchasing power. Currently, rates are at 6.25% and are predicted to continue to fall.
Meanwhile, the current month’s supply of inventory for Cumberland County is only 1.1. Homeowners are reluctant to move, as they have older, more favorable interest rates on lock. In addition, the lack of inventory could hamper a smooth transition.
If rates continue to drop over 2023, as forecasted by major banks, we expect that inventory will increase along with demand.
As leaders in the Greater Portland community for nearly 70 years, Town & Shore partners are known for their skills, knowledge, and expertise. In our changing market, the best strategy for both home buyers and sellers is to align with the brokers at Town & Shore.
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