August was another month of falling home sales and rising prices in Maine, but real estate agents say the market is starting to stabilize.
The number of single-family home sales in Maine fell nearly 10% last month from August 2021, according to data released Wednesday by the Maine Association of Realtors.
The statewide median sale price for homes sold last month was $ 340,000, a 9.7% increase from August 2021, but a slight decrease from the July median of $ 354,000, according to the association data. The median is the price at which half of the houses sold for more money and half sold for less.
Demand for single-family homes in Maine remains strong, and while active listings are still historically low, they have been on the rise over the past six months, said Madeleine Hill, a broker with Roxanne York Real Estate at Harpswell and president of the real estate association. state.
About 1,850 homes in Maine changed hands in August, a nearly 25% increase from July.
“With the additional inventory for sale, we are seeing a leveling off in some areas of Maine,” he said. “Buyers are approaching these market trends more strategically, with contractual contingencies and seller concessions becoming more common.”
Holly Mitchell, an agent with Keller Williams in Portland, is seeing the same.
Inspections, which practically disappeared during the pandemic, are back on the agenda. Buyers ask for repairs or negotiate a little more. They are taking a little longer to make a decision.
“It’s a bit more of a reasonable market,” he said. “There’s a little give and take.”
Some buyers who used government loans, such as FHA or VA loans, were previously excluded from the market, unable to compete with cash offers of thousands of dollars above the asking price. But now, sellers are more in favor of different types of financing, allowing buyers to put in less money and still have offers accepted, Mitchell said.
But homes continue to sell fast and he doesn’t expect prices to drop dramatically any time soon.
Mitchell also does not expect inventory to rise, especially as interest rates rise.
The average rate included in the buyer contracts for a conventional 30-year fixed rate mortgage it was 5.22% in August, down from 5.41% in July, according to the National Association of Realtors.
The relief didn’t last long: not only are mortgage rates back on the rise, but they are also the highest since 2008.
The average 30-year mortgage rate jumped to 6.02% last week, according to mortgage buyer Freddie Mac. A year ago, the rate averaged 2.86%.
The recent rate hike will continue to hold back demand and put downward pressure on house prices, but stocks remain inadequate, Freddie Mac said in a press release. Because of this, the declines in house prices will likely continue, but they won’t be large.
Mitchell estimated that somewhere around 50% of the country has interest rates below 4%, and many of those who bought during the height of the pandemic are stuck at significantly lower rates. Those homeowners will be extremely reluctant to sell, she said.
“Even if you sell the house you live in and buy it back, your monthly payment could be hundreds of dollars more,” he said.
This is also a national concern.
Lawrence Yun, chief economist of the National Association of Realtors, said rising inflation has hampered the housing market.
“The real estate sector is the most sensitive and suffers the most immediate impacts from changes in the Federal Reserve’s interest rate policy, ”he said. “Some homeowners are unwilling to negotiate up or down after locking historically low mortgage rates in recent years, increasing the need for more new home builds to boost supply.”
COUNTY, NATIONAL DATA
In Cumberland County, the median price was $ 503,500 for the three-month period ending August 18. 31 – an 11.6 percent increase over the same period last year and the highest median price in the state.
The real estate association also looks at three-month data for county-by-county comparisons to get a larger sample of sales transactions.
Washington County had the biggest drop in sales, a 26.9% drop, but it also saw the highest price hike. Between early July and late August 2021, Hancock County homes sold for an average of $ 160,000. In the same three-month period this year, they sold for an average of $ 237,000, an increase of 48.4%.
Sagadahoc County is the only county that saw an increase in sales during the three-month period. 135 homes were sold between July and August last year. This year there were 150, an increase of 11%. Prices rose at a similar rate, 11.3 percent, from $ 355,000 to $ 395,000.
Sales were stable in Piscataquis County, with 104 homes changing hands in both years, but prices jumped nearly 18% from $ 172,500 to $ 203,450.
Kathleen O’Toole, a Kennebunk-based agent with Coldwell Banker, is seeing slow changes in the market.
Many sellers are still listing their homes at pandemic peak prices, which is no longer feasible, he said, so price adjustments are more common.
“Interest rates will continue to force sellers to lower prices and be more realistic,” he said.
He also noted more homes listed as “back on the market,” which he attributes to mortgage rate hikes.
Buyers are getting excited and diving in, but then they realize that with the rates, the mortgage isn’t cheap. It’s not the theft they thought it was, then they walk away from the deal.
It is a speech for many people, especially for those who buy a home for the first time.
“People join in looking for buyers and are disappointed with what their money can afford,” O’Toole said. But it’s not hopeless.
“You just have to be lucky and you have to be creative to make anything happen in this market,” he said.
Nationwide, sales fell nearly 20% last month from August 2021, and prices rose 7.7% to an average of $ 389,500, according to the National Association of Realtors. While still up from a year ago, the August average price breaks up a three-month period of domestic sales in excess of $ 400,000.
Regionally, sales fell 13.7% last month from a year earlier, while the average price in the Northeast rose slightly by 1.5% to $ 413,200.