The historic Penobscot County mill towns of Lincoln and East Millinocket are expected to see the largest home value spikes in Maine over the next year, according to Zillow data.
Over the past few years, there has been a clear trend of property values rising fastest in the suburbs. Rural towns outside of Bangor and Augusta are generally expected to see the biggest gains over the next year, and those areas have led similar projections in recent years.
“As more people move to Maine, moving from Florida, from Mississippi, from Texas, they’re looking for up and coming towns that aren’t already flooded with homes and people,” Tasha Michaud, an associate broker with EXP Realty based in Millinocket, said.
Michaud said new, year-round residents to northern Maine towns include young families, climate migrants and retirees attracted by lower home prices, the weather and a slower pace of life. She also said home values are increasing in these areas as these new residents, and existing ones, undertake rehabs of existing homes, adding value to their communities.
Home values remain low in these towns. In East Millinocket, Zillow pegs the typical home value at roughly $150,000, compared with $400,000 statewide. Michaud is listing a 3-bedroom, 2-bathroom fixer-upper there for $85,000 that she says would go for exponentially more in southern Maine.
An influx of new residents seeking more affordable housing markets than they are finding around Portland and along the coast is also why homes in suburbs around Bangor and Augusta are rising in value, Cynthia Harding, an associate broker with Dwelling in Maine, said.
“Home [values] have been steadily increasing but we are definitely not seeing the increases that we were seeing a couple years ago,” Harding said. “The Augusta area, it is just probably the influx of people and it being a more affordable area than, say, the midcoast.”
Like Michaud, Harding said the new residents are looking to live in rural Maine year-round but are a mix of young families and retirees. These new residents are targeting the suburbs of Bangor and Augusta because of the nearby amenities, and the convenience of a central Maine location. It’s easy to get to most places in Maine from these central cities, Harding said.
Though values are still increasing, it’s a far cry from the hikes that were taking place in the early years of the pandemic and its related homebuying boom. The market is leveling off, and home prices are steadying or even being slashed in some cases, Harding said.
“The days of the seller testing the market with a price are gone,” Harding said. “Buyers are taking their time, they’re not jumping on anything if they feel it is overpriced.”
More inventory is coming on line, but Harding attributes the cooling market to buyers waiting on interest rates to come down before they pull the trigger on a new home. The effect is going to be a steady progression in home values that more closely resembles a pre-COVID rate.
“Homes typically increase in value year over year,” Harding said. “We’re not seeing huge jumps. What we’re seeing is more normal: 3, 4 or 5 percent.”