Maine's red-hot housing market cooling off

Maine's red-hot housing market cooling off

Roger Pettingell Sarasota Real Estate

(The Center Square) – Maine’s red-hot housing market appears to be cooling with sales of single-family homes dipping last month, according to a new report.

The latest monthly report from the Maine Association of Realtors found sales of single-family homes in the state fell by 9.89% in August from the same month last year.

But the association said values remain high, with the median price for a single-family home in the state rising by 9.68% to $340,000, with 1,420 transactions recorded.

“Demand for single-family homes in Maine remains strong,” said Madeleine Hill, the association’s president. “While still historically low, active for-sale listings have been on an upward trajectory for the past six months.”

Hill said with the additional for-sale inventory, prices are leveling in some areas of the state.

“Buyers are approaching these market trends in a more strategic fashion, with contract contingencies and seller concessions becoming more common,” she said.

Locally, Washington County reported the biggest decline (26.29%) in housing sales between June 1 and Aug. 31, according to the report. The northeastern county, which sits along the Canadian border, also had the largest increase in home prices last month (48.44%), the report noted.

Housing sales in the Northeast dropped 13.7% in May with a regional median sales price of $413,200 – a 1.5% rise in prices compared to August 2021, the association said.

Nationally, the median housing price increased by 7.6% to $396,300 in August, while sales declined 19%, according to the National Association of Realtors.

Mortgage rates have surged to the highest level since 2008 – rising from 3.22% to 5.81% since January – following the Federal Reserve’s decision to hike interest rates to cool record high inflation.

On Wednesday, federal policymakers unanimously agreed to raise the central bank’s benchmark overnight interest rate to a range of 3% to 3.25%.

Federal Reserve Chairman Jerome Powell cited the need to correct an “imbalance” in the nation’s “red hot housing market” as part of broader efforts to bring down inflation.

“What we need is supply and demand to get better aligned,” Powell said at a press briefing. “We probably in the housing market have to go through a correction to get back to that place.”

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