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No Maine city or town has been unaffected by the housing crisis, and the ones that have been hit hardest by the spikes in value over the last decade may surprise you.
Home values have skyrocketed everywhere here since 2014, so much that the real estate market of 2014 is completely unrecognizable to a Maine homebuyer today. Behind that is a low supply and record-high demand for homes, experts say, driven in part by an influx of new residents and investors who flooded Maine’s market during the pandemic.
Here are four takeaways after analyzing 10 years of Zillow data on the value of typical homes across Maine. The latest data on properties goes back to April.
Central and western Maine saw more dramatic increases than southern and coastal regions.
The most expensive homes are generally in wealthy southern and coastal areas. Yet the fastest-growing values in the last decade were in the rural, inland regions of central and western Maine, particularly the Augusta and Lewiston areas.
Realtors say that’s in part because the cost of living in those traditionally desirable regions of Maine are untenable for the average Maine homebuyer.
“Portland prices are so unreachable that, for some people, the next move is central Maine,” Hoa Hoang, broker-owner of Augusta-based Hoang Realty, said. “It’s a natural migration.”
Suburbs saw more growth than cities.
There’s generally more demand for suburban communities than cities. Hoang lives in the Augusta suburb of Hallowell. The same home she could sell for $485,000 in Hallowell would only go for $315,000 in Augusta “on a good day.”
While homebuyers like the access to the interstate, commerce and public services that a city center affords, many would rather invest in a suburb, Hoang said. They still live only minutes from those amenities, but often get to enjoy quieter areas closer to recreational opportunities.
“It’s a different kind of life,” Lynda Hebert, designated broker-owner of Hebert Realty Group in Rumford. “Some people moved here from out of state to just get out of the city, they wanted more of a country, four-season area to live in.”
Looking in a city? Get some Bang(or) for your buck.
The Maine city where the middle-class homebuyer has the best chance at affording the average home is Bangor. While the Queen City has seen a 97 percent increase in home values in the last decade, that’s still less growth than in other cities. The typical home is valued at just under $268,000.
Financing a home at that price would take an annual income of around $57,000, according to Zillow’s affordability calculator. That’s just above Bangor’s average household income, which is just above $52,000, according to Census data.
In Portland, Lewiston and Augusta, home values have shot up by 133 percent, 156 percent and 137 percent in the last decade, respectively. Those markets are hot by comparison.
Once upon a time, Portland was affordable.
In 2014, the typical home in Portland was valued at just $237,000. Today, that’s roughly equal to a home in Strong, a town in rural Franklin County. Now, the typical value is more than $553,000.
It goes to show how inflated the current market is and how Maine’s biggest city was recently open to middle-class homeownership. Decades ago, Portland wasn’t seen as a very attractive city to live in, Brit Vitalius, designated broker at Vitalius Real Estate Group, said.
“It was a pretty rough city, and Congress Street was kind of a scary place and all that. That has changed, the desire for people to live downtown has changed,” Vitalius said. “The housing stock was not as nice. Neighborhoods that were kind of nothing special are now becoming more attractive.”
Vitalius suspects the Portland market might have peaked, though. He and other brokers are finally seeing some more inventory. If that trend continues, prices will begin to at least level out.
“Whether it’s interest rates are finally being absorbed, if it’s a macroeconomic thing, if people are feeling less good about spending money, or simply they’ve hit the affordability ceiling, we’re feeling it,” he said. “We are not going to keep pricing things higher and higher.”
