Higher prices and limited inventory made 2021 another tough year for Mainers trying to find an affordable place to live.
Prices for single family homes have continued to rise this year, despite declining sales in recent months. Comprehensive rental data is not yet available for the year, but experts say housing costs in all sectors have continued to be burdensome for many Mainers throughout 2021.
“It hasn’t gotten any better,” MaineHousing Executive Director Dan Brennan said. “We’re still in a very tenuous position and the stress on lower income households in Maine is still very high, [for] both rental and homeownership.”
Maine’s affordable housing problem has been simmering for well over a decade, especially in coastal communities and more urban areas, like Portland. So when the pandemic made Maine a more attractive place to live to out-of-state buyers, real estate demand and prices ramped up, worsening the existing affordability problem.
Last year was a historic one for Maine’s real estate market, with a record number of homes sold and record prices.
While homeownership affordability data is not yet available for 2021, monthly reports from the Maine Association of Realtors indicate that prices have continued to rise over last year. Monthly sales have been declining since the summer, though have generally still been higher than pre-pandemic numbers.
In November, the median sales prices for existing single family homes reached $300,000, an 11 percent increase from the $270,000 median price in November of last year, according to the Maine Realtors Association. However, with low inventory and high demand, sales were down by about 8 percent compared with November of last year.
“Maybe in some markets it’s stabilized but it is stabilized at a high rate, which is not where we want to be. We can only hope that the single family market will come back to somewhat of a normal,” Brennan said.
The competitive real estate market has created trickle down problems in the state’s rental market, with renters who in normal circumstances might be shifting into the homeownership market being forced to stay put due to high prices. In some instances, changes in rental property ownership have also led to increasing rents, which have either displaced or financially stressed existing tenants, Brennan said.
As the pandemic has worsened the state’s affordable housing problem, Brennan said both the federal and state government have increased the amount of funding available to address the issue. He said MaineHousing is working on incentives for developers to create more single family homes and that in 2022 the agency will continue to focus on making home ownership more affordable in Maine.
“I just think if we can continue to enjoy the level of investment that we’ve had these past couple of years for the next 20 years we really might be able to do something about improving housing stock so that gives me hope, it really does,” he said.