Investors are regularly buying more than a fifth of Maine’s single-family homes going on the market, according to CoreLogic, a California firm that tracks real estate data.
It is a national trend that has risen during the pandemic and a housing affordability crisis. The phenomenon has been driven nationally by institutional investors that have focused on southern and Sun Belt states but not on Maine, where individuals look to be seeing opportunities.
But there are many anecdotal stories here about cash-offer investors competing with regular buyers for homes in desirable communities, like cities or towns along the coast. Research from Harvard University has shown that those buyers often compete for lower-cost homes that first-time homebuyers are seeking.
On Friday, one real estate agent said he had just gotten off the phone with someone in Massachusetts who wants to make an investment here because the money it takes to buy a highly desirable home here only buys an OK home there.
“An out of state person says, ‘Wow, there’s so much more opportunity. For $500,000 I can get a fixer upper in Boston or for $500,000 I can get a pretty nice home with land here in Maine,’” said Jeff Mateja with Keller-Williams Realty in Scarborough.
Only 1 in 10 single-family homes were bought by investors in July 2020, but that share ballooned to 24 percent by February and sat above 22 percent in July, according to CoreLogic, which identifies investors as any buyer, person or company, who owns three or more properties.
Nationally, the share of investor-owned housing was above 26 percent. Georgia and Nevada have seen some of the highest rates in the country. In Maine, investors know that despite some restrictions, they can buy a property in a tourism or coastal community and bank on operating it as a short-term rental for part of the year, Mateja said.
Though short-term rentals make up little of Maine’s total housing stock, they make up more of the state’s seasonal homes than they have in previous years, according to a state-sponsored report released this week that called for at least 76,000 homes more statewide by 2030 to support both its existing and future residents.
That report found that homes are becoming less affordable and harder to find in Maine. But many real estate agents said this week that they don’t feel an increased presence of investors in the market, nor do they think Mainers are being pushed out of home sales.
“The majority of purchases in Maine still are local Maine ZIP code purchases,” said Leanne Nichols, a Portland-based realtor with Keller-Williams Realty. “We have seen an increase in out-of-state purchases, post-pandemic, but we’ve always been a large second home or non-Maine ZIP code destination.”
Realtors working inland and further north said that they’re not seeing many investors buying up homes at all. Kelly Webb-Quinn, who works with the Fontaine Family firm in Kennebec and Androscoggin counties, said she couldn’t recall such a sale in the past two years.
Another realtor with Keller-Williams in Portland, Cathy Manchester, said that with an increasingly volatile stock market, more people are indeed choosing to invest in real estate and come to Maine to do it. But that’s not necessarily a bad thing, she argued.
“Those properties also create a tax basis, if they’re using them for short-term rentals, they’re creating lodging tax for the state of Maine,” Manchester said. “And if they’re long-term rentals, they’re creating income tax for the state of Maine.”
