PORTLAND, Maine — In what is promoted as a bellwether for the larger Maine economy, a semiannual real estate industry rating released Thursday showed the housing and construction markets continuing to rebound from their recession woes.
The MEREDA Index — named for the Maine Real Estate and Development Association, which releases it — crept to a score of 77 on Thursday, up from last June’s seasonally adjusted figure of just less than 76.
The number is derived from a formula that incorporates and weighs a range of real estate data, including new construction, sale and lease activity. First released one year ago, the index is updated every six months using research by well-known Maine economist Charles Colgan and his team at the University of Southern Maine’s Muskie School of Public Service.
The latest MEREDA Index was buoyed by strong residential home sales and a robust construction job market, according to the association.
“This is a step in the right direction for Maine — and is just the beginning,” said Drew Sigfridson, association president, in a statement. “Residential construction will likely lead to even more home sales — which are already on the rise. We also see tightening of office and retail space in downtown markets. That spurs commercial construction projects. Additional new construction will be a big relief for the state’s economy.”
The latest index was released Thursday as part of the association’s annual forecast conference in Portland, where real estate professionals and economists from across the state gathered to deliver reviews of the previous year and predict trends.
Arthur Jones, a Maine native who now serves as an economist with the Boston-based CBRE Econometric Advisors, told a MEREDA audience of several hundred that he’s “as optimistic as I’ve been since the recession started” in early 2008.
Jones said that while the Maine economy faces challenges — such as an aging workforce and a lower percentage of residents with college degrees than its neighboring states — there are signs of hope.
One comes in a sector considered for years to be a drag on the state’s economy in recent decades.
“Twenty or 30 years ago, Maine was a manufacturing powerhouse, whether it was ships at Bath Iron Works or the paper mills, most of which have now closed or downsized,” Jones said. “[Manufacturing] is growing at a rate of 0.6 to 0.7 percent in Maine, and it hasn’t done that since 1990 or before. It may not seem like much, but that’s actually sturdy growth. That’s positive.”
Jones also noted that the state’s housing stock remains among the oldest in the country, and said even a small increase in population — Maine grew by about 100,000 people from 2000 to 2010 — would necessitate the replacement of old homes and boost construction even more.
Speakers from around the state at Thursday’s conference touted 2013 real estate highlights from their respective regions.
“The data we’ve tracked suggests the greater Portland industrial market has fully rebounded from the recession. We’re seeing historically low vacancies and increasing lease rates,” said Justin Lamontagne, a conference presenter and broker with NAI/The Dunham Group, in a statement. “For the first time in years, there is a shrinking divide between buyers and sellers, making deals easier.”
Portland, in particular, is in the midst of what city officials have called a nearly $540 million development boom of public and private projects, including five hotels opening within a three-year span.
Tanya Emery, Bangor’s director of community and economic development, said “mixed-use development in Bangor is hot.”
“With major developments in retail, hospitality and health care, Bangor’s growth is no surprise as the city continues to offer great return on investment as a value market with even more growth potential,” she said in a statement. “And, as inventory shrinks, we expect to see strong opportunities in Hampden, Orono and surrounding areas.”
Emery noted that attractions such as the new $65 million Cross Insurance Center and the high-profile Waterfront Concerts series have helped prod significant retail and hospitality growth in the Queen City. The Bangor Mall area gained seven new stores and restaurants in 2013, and six new hotels have been either built or planned in the city during the last seven years, she said.