S ara Cressey and fiance Andres Kenney have been thinking about buying their first home for a long time, but recently started looking earnestly because of more favorable interest rates.
“For a number of reasons this seemed like a good time to do it,” Cressey said.
The couple has made five offers on homes in greater Portland in the last month and a half, including several above market value.
And each time they struck out.
“It’s frustrating,” Cressey said. “It’s also a learning process.”
Cressey and Kenney’s struggles are not unique, according to Portland-area real estate agents.
Rebecca Kingsley, an associate broker at the Hatcher Group of Keller Williams Realty who specializes in helping clients from out of state, said while home sales are down, prices are rising, likely because of a decrease in inventory.
“People are still buying,” Kingsley said, even with the coronavirus pandemic keeping people in their homes. “They’re doing virtual walkthroughs.”
Kingsley said she has seen an increase in buyers from outside Maine – a trend she doesn’t expect to change soon.
Every day, she said, she hears from clients in cities like New York City and Boston, or more densely populated states like California, who want to get out of those places. She said the growing ability of people to work remotely at home, rather than being in an office, is helping to boost the attractiveness of Maine.
“If they are working remotely, why not bring that national dollar to Maine and be able to continue on with their Chicago salary?” Kingsley said. “As working remotely has become so much more accepted, the attention turns to the quality of life, and they are turning that attention to our little city.”
She believes the trend is generally a good thing for the state.
“To me, having outside influences only enriches our culture here,” Kingsley said. “But what does concern me is we Mainers are going to be priced out of affordable housing. I think there are pros and cons for sure.”
Cressey and Kenney, meanwhile, said they’ve rarely received feedback about why their offers were rejected because sellers and agents are bound by confidentiality agreements.
“Our impression is there have been a lot of cash offers beating us out,” Cressey said. “It could be that the offer is the same dollar value as ours, but we’d have to take out a mortgage.”
“We easily can go 10 percent above the asking price,” Kenney added, “and have no security that would be the highest offer or the best offer.”
Sales decline, prices rise
According to the Maine Realtors Association, Maine had 194 fewer homes sales in April than April 2019, a decline of just over 15 percent. But the median sales price increased more than 12 percent, to $235,800.
In Cumberland County, sales from Feb. 1 to April 30 dipped more than 9 percent, from 723 in 2019 to 653 this year. In 2019, the median sales price during that period was $304,900; this year it was $334,900, an increase of more than 9 percent.
MRA President Tom Cole said the statistics reflect the beginning of the impact of the pandemic.
“Recent statistics show that Maine’s for-sale inventory is down 19 percent compared to a year ago,” Cole said in a press release. “Realtors from across Maine indicate that buyers are plentiful and multiple-offer situations are prevalent due to the historic low mortgage interest rates and the constrained inventory levels. Values remain strong.”
Kingsley said buyers with cash are altering the landscape.
“We’re seeing it shake out in all sorts of ways,” she said. “Some buyers who are under contract had to pull out because of financing changes. We’re seeing people who are cash buyers and are afraid of the stock market, so they invest in real estate. It’s just wonky, it’s just shaking out in all sorts of unexpected ways. I’m curious about what it means for us here in Portland. The values will continue to hold strong because we have a lack of inventory.”
Dava Davin, the principal broker at Portside Real Estate Group, said while there was a lot of uncertainty and concern about the housing market when the pandemic hit, the market has actually been “bananas.”
“What we’re seeing now as we’re into the latter part of May is increased activity,” she said. “We have more buyers than we have inventory, period. That creates a supply and demand issue, and a little bit of a frenzy when something comes to the market that’s priced well and in good condition.
“The market is good,” Davin said. “We need inventory for sure. Without it we’ll continue to see prices go up.”
She said part of this may be seasonal, but it’s also because Realtors are still only recently getting back to work after being labeled nonessential during the early stages of the pandemic.
“We’ve been in this wonderful seller’s market for years,” Davin said. “But it’s like that on steroids.”
She also echoed Kingsley’s assessment that out-of-state buyers are driving up demand.
“I think that will continue for months, years, as people discover Maine,” Davin said. “Many studies have been done about people actively looking to move out of dense cities into areas like Maine, with open spaces to walk and fresh air. I do see that trend now, and continuing.”
‘It’s been a whirlwind’
Meanwhile, potential buyers like Cressey and Kenney are left on the outside looking in. They want to stay in the area but are thwarted by homes that often attract a dozen or more offers.
“It’s been very competitive,” Cressey said. “Even getting a showing can be very difficult.”
Last week, the couple managed to see five homes for sale. They made an offer on one and were turned down. There was another house on their list to see that day, but they ultimately decided not to go; it had 50 showings scheduled for the weekend.
“It’s been a whirlwind,” Cressey said. “When a really nice house comes on the market, it gets attacked by everybody.”
Showings will usually begin late in the week, she said, and unless you are on your toes, you may not get one in time.
“We’ve been told we have a strong offer in place, and it’s just somebody beating us out,” Kenney said. “We’re not told why, and the only reason we might be beaten out is a cash offer.”
“We have learned a lot in the process,” Cressey added. “You go into the next one anticipating what the deal-breaker was (the last time), or how far above asking price we need to go.”
Kenney agreed, saying the market today is a new playing field for everyone.
“It’s an experience for us, and our Realtor is learning because the things we’ve been doing, in any other market, she believes would work,” he said. “It’s more competitive, it’s an experience we have to continue to learn from every day.”