The BDN explores Maine’s housing crisis from every possible angle, from how it affects home prices to what it means for Mainers across the state. Read our ongoing coverage here and fill out this form to tell us what you want to know.
Lisa Savage and her husband, Mark Roman, decided to stay in Solon after unsuccessfully trying to be closer to their grandchildren in Portland.
The effects of today’s high real estate prices, low inventory and inflationary pressures also ripple through their families.
Their eldest son, a lawyer who wanted to move his family from Oakland, Calif., to Portland, searched for a year without success. Their youngest son, a digital producer in New York who has a high-paying job with benefits, isn’t dating because he’s worried about the $40 co-payment for regular medical treatment, Savage said, who ran as an independent in Maine. disputed race in the us senate 2020.
The couple are able to manage their mortgage, tax and insurance payments for now using their union pension and their Social Security and Medicare payments, “but any big expense would sink us,” Savage said, who retired as a teacher three years ago. Roman, carpenter, is semi-retired.
They’re saving for a $1,000 driveway repair, but if something went wrong with one of their cars, they’d likely become a one-car family, she said. They plan to reduce their purchases of more expensive organic foods.
Savage and Roman are faring better than the many Mainers who struggle to pay high rents or mortgages in the face of rising utility, gas and grocery costs. But the stories of their family members reflect the severe pressures of today’s real estate market.
Portland resident Justin Raschick, a traveling nurse, is being evicted from the apartment he’s lived in since 2015 after it was sold.
He struggled to find an affordable new apartment in Portland and looked in his home state of Vermont, where apartment prices in Burlington are also high. He qualified for a mortgage, but it’s not big enough to afford a home in today’s market.
He is due to move out of his current apartment at the end of August and faces reinstated payments of $1,700 a month for his student loans in September.
“I’m probably going to have to pack up my things, jump on the couch and hang out with friends,” he said.
Apartment prices rose alongside house prices. More than half of Maine renters have seen their monthly rent increase from less than $100 a month to more than $500 a month in the past 12 months, according to recent data from the US Census Bureau.
The median sale price of a single-family home in Maine also rose, up nearly 20% from $292,250 in January to $350,000 in May, according to the Maine Association of Realtors. June data is expected later this month. A typical Maine community sees home values increase by more than $2,000 in just one month, according to Zillow.
Mortgage rates have risen more than 2 percentage points to more than 5% for a 30-year fixed mortgage since the start of the year, which has kept some potential buyers waiting. But it’s still unclear whether the real estate market is turning into slower price growth and less competition among buyers, said Madeleine Hill, president of the Maine Association of Realtors.
For potential buyers, Cumberland and York counties have the highest home prices in the state, while there are still relatively affordable homes in Aroostook and Piscatquis, which have the lowest prices in mean.
A recent Harvard University study found that a buyer needs a six-figure income to purchase a home in the Portland and South Portland area. But even in the cheapest areas, like Mexico in Oxford County, home values have gone from $60,000 for a typical home before the pandemic to four townhouses selling for more than $300,000 this year.
Due to rising prices on almost everything, the rental and residential markets have seen unusual behavior since the beginning of the year.
Some buyers have gotten creative to stand out in a market where multiple offers above the asking price have become, and still are, the norm. Across the country, they included those offering sellers Hawaiian vacations or bitcoin payments to make their deals stand out.
Some sellers, looking for the best buyer to fit their property, have attached unusual terms, such as the Down East Island owner who wanted potential buyers to spend a night there first to see if they could adapt.
There were also buyers who simply needed a break. Jennifer Wolfe and Chase Dolloff embarked on a home-hunting journey in which they competed with cash buyers offering $50,000 or more off asking prices for homes sold within days of listing. It took 14 offers until they found the right owner, who wanted to sell to Mainers and liked the couple.
Even the apartment market experienced unusual behavior. Portland experienced its first apartment bidding war in April, when a young couple were asked, along with other apartment seekers, to give their best offer for April’s rent, and the remaining months each would be the advertised $1,400. Portland’s tight real estate market can be a nightmare even for those with good credit.
With a shortage of high-priced housing, inflation at a 40-year high, and two bags of groceries costing $100 or more, many Maine residents are worried about what the future holds.
“I don’t know how we’re supposed to live,” Raschick said.