Profits for home sellers are falling in Maine and nationally at the fastest rate in three years, the latest sign of a cooling real estate market.
Investment returns remain at record levels, but sellers got less for their properties in the third quarter of this year from July through September, according to a report released Thursday by real estate data firm ATTOM Data Solutions.
That’s hopeful news for prospective buyers who have been sidelined by rising mortgage rates and high prices.
In the hot Portland and South Portland real estate market, the median sales profit on a single-family home or condo declined 3.9 percent from the second to the third quarters of this year. That means sellers made an average profit of $137,120 instead of $142,623 the previous quarter. However, the profit still was up 15.5 percent compared with a year ago.
“Rapidly rising mortgage rates have not only resulted in fewer home sales but have begun to impact home prices as well,” said Rick Sharga, executive vice president at ATTOM. “It’s very likely that home prices will continue to weaken in many markets in the coming months.”
Median sales prices of homes across Maine also have been declining on a monthly basis, although they are up when compared with last year, according to Maine Association of Realtors data.
Home sales decreased by 11.7 percent for the three-month period ending Aug. 31. And in August the median sales price of $340,000 was down 9.9 percent from July, but up 9.7 percent compared with August 2021.
Maine is mirroring national trends showing the cooling housing market. Profit margins nationally decreased 2.7 percent from the second to third quarters as home prices declined for the first time in almost three years, according to ATTOM. On an annual comparison, U.S. homeowner profits were up 9.4 percent. They were up 28.2 percent compared with two years ago, when the real estate market began its sharp rise.
The investment-return decline during the typically strong summer home-selling season this year was the largest quarterly downturn since 2011, when the aftereffects of the Great Recession continued to dampen the real estate market, ATTOM said.
ATTOM said the third-quarter profit and price trends have emerged during growing headwinds that “threaten to end or significantly cool down the nation’s decade-long housing-market boom.”
