Real estate professionals see market equilibrium ahead

YORK COUNTY — Interest rates are rising and the inventory of existing homes for sale is lower than ever, contributing, according to the Maine Association of Realtors, to fewer home sales statewide in 2022 per compared to 2021. Still, median prices increased statewide to $335,000 or 12.04% from 2021.

In York County, home sales were down 16% in 2022, but the median sale price was $450,000, down from $398,750 the previous year, according to the real estate association.

York County Council Chair of the Maine Association of Realtors, longtime realtor Teri Woods, said she feels positive for the year ahead.

“I don’t have a crystal ball for where things are going, but I think it will become a more balanced market, which is always healthier,” Woods said in a recent phone interview.

Woods, who got his first license in 1986 and works in central to southern York County and New Hampshire, acknowledged that York County has a tighter market than other counties in Maine – low inventory is a important factor and particularly affects first-time home buyers and those hoping to downsize.

“Current housing supply in York County remains low and unable to meet market demands,” she said. “Right now there is a 1.6 month supply of homes currently for sale. A more balanced market would be a six month supply.

Recalling 2019, she said the December 2022 inventory of existing homes for sale in York County was 56% lower than that pre-pandemic year. And, she says, the fact that interest rates have been low over the past few years has meant that some sellers have taken their homes off the market and refinanced them, and buyers have made purchases, which contributed to the decline in inventory volume.

Maine Association of Realtor President Carmen McPhail said statewide 2022 ended with more than 16,800 homes sold and a median sale price of $335,000, the latter down 8 .5% since its peak in June.

“Overall, the numbers reflect the impact of mortgage rate increases, the typical fourth quarter seasonal slowdown and a continued shortage of homes for sale,” McPhail said. For the month of December alone, McPhail noted that statistics collected by Maine Listings indicate an increase in the median sale price of 8.9% to $ 330,000 statewide compared to December 2021. Sales throughout the declined 36.6% statewide, comparing December 2022 to December 2021.

Back in York County, Woods said upward pressure on prices was easing a bit due to higher interest rates and buyer constraints. She said the properties have been on the market for more days than in the recent past – and that’s not all.

“We’ve started to see bids below the purchase price and fewer multiple bid situations,” she said of the York County market today – recalling that at its peak, the people would see their house go under contract a day or two after hosting an open house. .

It’s now common to see a home on the market now for 35 to 40 days, whereas in the recent past 7 to 10 days tended to be the norm, she said.

Woods also said she’s also starting to see more demand for generational housing — apartments for in-laws or multi-family housing — a trend she said she’s heard about nationally.

Around Jan. 21, interest rates, depending on the borrower’s qualifications, were hovering around 7.5% on a 30-year conventional loan, Woods said. But she noted that there are new products on the market offering 3-, 5-, and 7-year adjustable mortgages for a few points less. She noted that mortgages stay at the figure shown for the period, then adjust when they expire.

Similar mortgages got a bad rap during the 2008 recession, but Woods pointed out they were one- or two-year programs. With the new offerings, one could either sell — typical homeowners stay in their homes for seven years, she said — or refinance under a fixed program.

McPhail, who works in the east, said agents across the state are experiencing a small pause as buyers and sellers adjust their expectations due to today’s funding conditions. But she too had a positive attitude. “As we move forward into 2023, we expect potential buyers to re-engage with the market and demand for residential real estate to remain elevated,” McPhail said. “Conditions are favorable for a gradual rebalancing of the real estate market.”

She said a balanced market is better “for everyone, buyers and sellers.”

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