In 30 years of selling real estate, Peter McPhail has never seen anything like what’s going on with farm sales in Maine right now.
McPhail is co-owner of Lifestyle Properties of Maine, a real estate company based in the state and a history of large land parcel and farm listings. The company currently has 142 farm properties listed for sale on its website.
And the few farms that are on the market are selling fast, sometimes before they are even officially listed.
“Supply and demand is way out of balance,” McPhail said. “That’s why sales are actually down — not because of the demand, but because of lack of inventory.”
Maine’s housing market has been red hot in the state for the last two years, with nearly 1,200 homes sold in January 2022 alone, the second-best January on record. While no hard data is kept on the numbers or prices of farms selling in Maine, realtors who specialize in farmland say the demand similarly has never been stronger, causing the price of farmland to surge for those who manage to find a farmer willing to sell.
“There is just a really low inventory for those types of properties on the market,” according to Adam Bishop, farmland protection program director with Maine Farmland Trust. “Many of those properties are not even making it to the market — it’s not that they are not transferring ownership, it’s just happening really fast and there is not a lot for buyers to choose from.”
To be classified as a farm in Maine, a property must be five acres or more in size and produce a marketable crop, according to the Maine Department of Agriculture, Conservation and Forestry. In 2017 there were 7,600 farms in Maine averaging 172 acres each. Just more than 1.3 million acres were farmland, according to the United States Department of Agriculture five-year census.
The average price of an acre of farmland in Maine in 2017 was $2,200, according to the same census.
Current listings for Maine farms at least five acres in size all exceed that price. A 62-acre farm in Knox County is going for $5,600 an acre. A 267-acre Cumberland County farm is going for $10,861 an acre. In Oxford County, a 29-acre farm is listed at $21,500 an acre.
“I have seen farms and the price of land in general going up,” McPhail said. “Historically Maine has been the cheapest place in the country per acre, but we have seen land prices almost double in the last two years.”
The demand is being driven at least in part by buyers who are coming from farther away than before, according to McPhail.
“In a typical past Maine real estate market we would see a lot of out of state buyers, but mostly from Massachsuettes, Connecticut or New York,” he said. “I have never seen the influx like we are seeing now from the west coast [states] like California, Oregon, Colorado, Washington and Nevada.”
And they are coming ready to buy, cash in hand.
“Even though we have seen a 20 percent appreciation of farmland in Maine over the past couple of years, someone in California can sell their house out there and pay cash for land here,” McPhail said.
Maine has become attractive to these buyers for several reasons, McPhail said.
Large west coast cities like San Francisco, Portland and Seattle have seen increases in violent crimes over the last several years.
Also on the rise out west are wildfires, something farmers and homesteaders in western states are dealing with more and more each year due to drought conditions and climate change.
“There are still unknowns in Maine for farming’s future in the face of climate change,” Bishop said. “But we are still attractive because we are not far from the large markets in Boston and other urban centers, we still have plenty of water, and we have a supportive agricultural community.”
The pandemic has also driven an urban out-migration, McPhail said, with more people able to work remotely from home.
Some of those looking for farmland in Maine have turned to social media, pleading their cases and posting real estate wish lists in the hopes someone will have a farm for sale.
Maine Farmland Trust maintains a page on their site called Maine FarmLink that connects sellers and buyers. There are currently 22 properties listed there.
Not a real estate service, Maine FarmLink works with both buyers and sellers in a sort of farm matchmaking arrangement. These matches end up as final sales, leases or other arrangements such as work-to-own agreements.
There are currently 55 “farm seekers” from all over the country listed with Maine FarmLink, complete with profiles including photos, desired acreage and farming background.
The site currently has 14 farms listed for sale.
Bishop said it’s crucial for Maine’s future that farmland remains in production.
“One of our primary aims is working with people who want to not only acquire land, but also protect it,” Bishop said. “We know that an important piece of that is the viability of the farm.”
Groups like Maine Farmland Trust or The Maine Organic Farmers and Gardeners Association work with newcomers to Maine Farming to help them get going.
“If a farm is making money and paying the bills through agriculture, we know [farmers] won’t be inclined to sell that farm if a developer comes knocking on the door,” Bishop said. “Then farms won’t be chopped up and resold for development.”
McPhail sees the demand for farmland in Maine remaining high throughout the rest of 2022.
“Even with inflation as bad as it is, it does not hurt the people from the west coast as much as the blue collar workers here,” he said.
“I feel bad for the first-time buyers here that are getting priced out of the market — I have never seen anything like it.”