MidYear Market Recap and Forecast

By Dava Davin
Posted Monday, Jul 8, 2024

Written by Dava Davin, CEO of Portside Real Estate Group

Welcome to Portside Real Estate Group’s 2024 Q1 and Q2 market recap and forecast.
As we delve into the current real estate trends, I’m excited to bring you focused updates and useful information in our beautiful state of Maine.

Market Trends and Performance

Chart Maine Residential Market:

Overview: The Maine real estate market is finding more balance, but continues to favor sellers. Homes are selling at list price within weeks. While unit sales are lower than pre-COVID levels, prices remain robust with growth across nearly all Maine markets. Well-priced homes attract quick buyer interest and often receive multiple offers. Despite this, the market faces ongoing inventory challenges, although new listings are slowly increasing.
Single-Family Homes: The median price for single-family homes in Maine surged by 9.7%, reaching $384,000. Although the number of homes sold has increased by 2.1%, it remains lower than pre-pandemic norms. Single-family homes are selling quickly, with a median selling time of just 13 days compared to 10 days last year.

• Condominiums: The condo market saw a significant 6% price increase, with the median price reaching $429,000, and unit sales increasing by 9.9% over 2023. Sellers are still receiving offers above asking price, though less frequently than in previous years. Notably, Portland has seen an increase in condo inventory, presenting opportunities for buyers despite the high median price of $752,500.

Seasonal Trends

Q2 Improvements: Prices and sales rose in Q2 compared to Q1, culminating in the highest home prices in Maine’s history. While sales volumes mirror 2014 levels, the market is preparing for a competitive summer.
Summer Outlook: Homebuyers are gearing up for a hot summer market with more inventory coming on the market. Multifamily sales remain sluggish due to higher interest rates and stabilized rents.

National Market Insights

National Trends

Overview: Nationally, home prices have risen by 4.8%, with the median price reaching $438,483 in May 2024. The number of homes sold has slightly increased year over year, with 500,253 homes sold in May compared to 498,058 the previous year.
Mortgage Rates: The national average for a 30-year fixed-rate mortgage has increased to around 7%, impacting buyer affordability and market dynamics, but still lower than the historical average.

Housing Inventory Forecast

Inventory Challenges: The inventory shortage remains critical despite more resale homes entering the market. Many homeowners are reluctant to trade up due to ultra-low mortgage rates and high market prices.
New Construction: While new home construction offers some relief, more is needed to bridge the inventory gap, particularly in the entry-level segment, perpetuating high demand and prices.

Market Stability and Projections

Low Probability of Market Crash

Stable Foundations: While concerns about a housing market crash are understandable, the probability remains low for 2024. Today’s homeowners have a stronger financial position than those in 2008, with significant home equity.
Sustained Demand: Factors such as Millennials entering their prime home-buying years, wage growth and increased financial wealth are expected to sustain housing demand throughout the year. Inventory remains tight, keeping prices stable or rising.

Future Outlook

Market Contradictions: Prime properties in high-demand locations will likely experience notable price pushes due to solid buyer competition. Simultaneously, overpriced properties may require multiple price reductions to align with market expectations.
Competitive Market: As we move into the second half of 2024, the market is expected to remain competitive. High-demand properties will see price increases, while overpriced listings may face longer market times and price reductions.

So, there you have it - the latest Maine real estate market scoop!

Portside Real Estate Group continues to excel, achieving our best January to June performance in our 12-year history and maintaining our position as the #2 brokerage in Maine by sales volume. Our dedicated full-time agents drive our success, extensive in-house listings database, and collaborative culture, even in a challenging market.

If you're looking to sell your home for a great price or find your dream home, we're here to help! Don't hesitate to reach out and be sure to follow us on social media for more updates on the Maine real estate market.