Housing
This section of the BDN aims to help readers understand Maine’s housing crisis, the volatile real estate market and the public policy behind them. Read more Housing coverage here.
A Maine town of just under 400 people had 17 homes on the market as of Friday valued at $1 million or more, including several built on spec.
But Newry, which is known for the Sunday River ski resort, is not a typical small town. It has long had local builders putting up fancy vacation homes for sale. But the luxury housing market boomed during the pandemic, raising prices for homes that once were in the $500,000 range as well as demand for them on small plots on or near the mountain.
It is leading to some concern in the western Maine town. It will hold a public meeting Wednesday to consider writing an ordinance that would regulate vacations rentals, although town officials have already decided against capping them as some other popular Maine tourist towns including Kennebunkport and Bar Harbor have done in recent years.
“Newry is a resort community and we welcome our visitors,” Joelle Corey, the town’s code enforcement officer, said. “We just want to balance our small-town neighborhood feel, which I’m told is why people love it and can’t wait to build a second home or primary home.”
The impact of the influx of new seasonal or part-time residents to Newry has been mixed but is likely a net positive for the town. Between 25 and 30 permits for new homes have been issued every year since 2020, Corey said. The property tax base has expanded so much over the past decade that Newry has been able to cut rates to one of the state’s lowest levels.
But this unchecked growth in an area with no zoning has strained the town’s subsurface wastewater disposal systems, which were not always designed to such handle heavy use during peak summer and winter months, Corey said.
Construction debris from luxury homes has the Bethel transfer station overflowing, Newry town administrator Loretta Powers said.
The volunteer fire department has also been “toned out at all hours of the day and night” to deal with safety issues and triggered alarms that guests don’t know how to switch off, Corey said. Excessive traffic, parking issues and noise complaints have beleaguered the town, too. In many cases, Corey said she can’t get in touch with the property manager or owner to solve issues.
There is also a long-term problem: The proliferation of luxury housing and short-term rentals has made it impossible for young people to gain a foothold in the Newry real estate market.
“It’s sad. My kids … I was born and brought up here, and they want to stay, but … they can’t afford land,” Powers said.
The growth in Newry has been remarkable. Its property tax base grew 15 percent over inflation between 2013 and 2023, according to state data. That was double the rate of growth statewide. Yet local restaurants and businesses haven’t reported much increased traffic because vacationing residents often bring what they need and stay home, Powers said.
“The ones that have been here forever, they’re not crazy about all the development. But what are you going to do if you don’t want development? You’ve got to buy the land yourself,” Powers said, referencing the fact that empty lots sell at premiums in Newry, too.
In neighboring Bethel, the town proposed a short-term rental cap that was dropped due to local opposition in 2023. Newry won’t be pursuing restrictions beyond registering units and ensuring they comply with health and safety regulations. That’s amenable to short-term rental property managers like Stephanie Cayer, who co-operates Maine Ski Lodging Co.
“The majority of the proposed regulations align closely with the internal policies we already have in place to prioritize the health and safety of our guests,” said Cayer, who added that the number of properties she manages has increased during the pandemic.
Demand for the luxury market in Newry has softened slightly, Margie Finley Camden, a broker with Sunday River Real Estate, said. Some homes have gotten price cuts. But buyers continue to show a strong interest in spec homes. While some neighborhoods on the mountain are built out, Camden said developers are “nowhere near” maximizing the area’s potential.
Multi-million dollar spec homes are sitting on the market for longer, but Camden said that’s a bit deceptive. Most buyers like to wait until homes are nearly finished construction to pull the trigger on a sale, she said. When they do buy, they’re often looking for one thing in particular.
“Many potential spec home buyers inquire about rental potential as they weigh the option of renting their second home when they’re not using it,” Camden said. “This can be an important factor in their purchasing decision, especially in a popular ski resort area like ours.”