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Lisa Savage and her husband, Mark Roman, decided to stay in Solon after looking unsuccessfully to move closer to their grandchildren in Portland.
The effects of today’s high housing prices, little inventory and inflationary pressures are rippling through their family as well.
Their oldest son, a lawyer who wanted to move his family from Oakland, California, to Portland, looked in vain for a year. Their youngest son, a digital producer in New York City who has a good-paying job with benefits, doesn’t go out because he frets over the $40 copay for a regular medical treatment, said Savage, who ran as an independent in Maine’s hotly contested 2020 U.S. Senate race.
The couple is able to handle their mortgage, tax and insurance payments for now using her union pension and their Social Security and Medicare payments, “but any big expense would sink us,” said Savage, who retired as a school teacher three years ago. Roman, a woodworker, is semi-retired.
They are saving for a $1,000 driveway repair, but if anything went wrong with one of their cars they would probably become a one-car family, she said. They are considering trimming purchases of more pricey organic food.
Savage and Roman are faring better than the many Mainers struggling 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 has lived in since 2015 after it was sold.
He has had trouble finding a new apartment he can afford in Portland, and has looked in his home state of Vermont, where apartment prices in Burlington also are high. He has qualified for a mortgage, but it is not large enough to afford a home in today’s market.
He must leave his current apartment at the end of August, and is facing reinstated payments of $1,700 per month for his student loans in September.
“I’ll probably have to put my things into storage, couch hop and stay with friends,” he said.
Apartment prices have been rising alongside home prices. More than half of Maine’s renters saw their monthly rent rise anywhere from less than $100 per month to more than $500 per month over the past 12 months, according to recent U.S. Census Bureau data.
The median sales price for a single-family home in Maine also has been on the rise, up almost 20 percent from $292,250 in January to $350,000 in May, according to the Maine Association of Realtors. June data is due later this month. A typical community in Maine is seeing home values rise by more than $2,000 in just one month, according to Zillow.
Mortgage rates are up more than 2 percentage points to above 5 percent for a 30-year fixed mortgage since the start of the year, causing some would-be buyers to wait. But it still isn’t clear whether the real estate market is transitioning into slower price growth and less buyer competition, Madeleine Hill, president of the Maine Association of Realtors, said.
For prospective buyers, Cumberland and York counties have the highest home prices in the state, while there are still comparatively affordable homes in Aroostook and Piscatquis, which have the lowest prices on average.
A recent Harvard University study found that a buyer needs a six-figure income to purchase a house in the Portland and South Portland area. But even in the least expensive areas, such as Mexico in Oxford County, home values escalated from $60,000 for a typical home pre-pandemic to four homes in the town selling for more than $300,000 this year.
As a result of rising prices on almost everything, the rental and home markets have seen some unusual behaviors since the beginning of the year.
Some buyers became creative to stand out in a market where multiple offers above asking price became, and still are, the norm. Across the country, they included those who offered sellers Hawaiian vacations or Bitcoin payments to make their bids stand out.
Some sellers, seeking the best buyer to fit their property, attached unusual conditions, like the Down East island owner who wanted potential buyers to first spend a night there to see if they could adapt.
There were also buyers who simply needed a break. Jennifer Wolfe and Chase Dolloff embarked on a house-hunting journey during which they competed with cash buyers offering $50,000 or more over asking prices for homes that sold within days of listing. It took 14 offers until they met the right owner, who wanted to sell to Mainers and liked the couple.
Even the apartment market saw some unusual behaviors. 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 rent, and the remaining months each would be the advertised $1,400. Portland’s tight housing 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 Mainers worry about what the future will hold.
“I don’t know how we’re supposed to live,” Raschick said.