SOUTHWEST HARBOR — Only about half of the homes in Southwest Harbor are occupied by year-round residents.
That estimate comes from an interim report on housing by the town’s Sustainability Committee’s Working Group on Housing, delivered to the Select Board on Oct. 14.
Additionally, the committee found that housing prices remain out of reach for many people.
“Our median homes cost more than three times as much as what our median families can afford,” said Emily Samuel, a member of the volunteer working group that spent hundreds of hours inventorying the town’s housing stock.
The median cost of a house in Southwest Harbor is $550,000.
“To afford that, a family would need an annual income of $192,000” compared to the current annual household income of $62,000, Samuel said.
“This mismatch led to the natural question of, well, then who is buying the houses? So, we investigated what has been selling recently,” Samuel said.
According to the report presented Tuesday, one third of the households are renters who earn 80% or less of the median income.
The group looked at home sales in town between September 2022 and September 2024. Only 29% of the 59 homes sold in those two years are now occupied year round. And then, 26% of the year-round homes that were purchased became seasonal. Approximately 15 of the homes sold are short-term rentals, the group believes.
“An increased number of short-term seasonal vacation rentals appear to be reducing supply of year-round rentals and ownership opportunities that MDI residents can afford,” the committee’s report said.
Southwest Harbor is not alone. According to a housing analysis by Bar Harbor in 2020, Hancock County had 24,116 year-round occupied homes and 14,493 seasonal homes. The same report found that Mount Desert had the most seasonal housing, then Bar Harbor. Some of these homes aren’t weatherized for all seasons, but many are.
Homes that MDI workers earning that median income might be able to afford aren’t available, and affordable year-round rentals are in short supply.
Currently 15 homes are for sale in Southwest Harbor according to the real estate site, Zillow. Five of them are under $600,000, and prices range from $295,000 to $6.8 million. A 2025 study by the Musson Group and MDI Housing Initiative speaks to factors in the MDI region that are impacting the ability for people to find homes.
“Driven by lifestyle changes and remote work opportunities, the state has attracted professionals and many new residents to the Seacoast. During this same period, MDI Region has continued to see an aging population.”
The report also found that much of the housing stock in the MDI region is single-family homes, with limited rental options and low vacancy rates. At the same time, rising housing costs and competition for homes, driven by seasonal and short-term rental conversions, have displaced many year-round residents, a change that disproportionately affects lower-income households and essential workers.
“In the 1970s, there were 60 year-round households, of which 40 had someone working in Southwest Harbor. Another 10 worked on MDI or in Hancock County,” said Mary Ellen Martel, who has lived in town since 1972.
Now, she said, there are about 25 year-round dwellings in that neighborhood.
“The children that grew up in Southwest Harbor then, cannot afford to live there now,” Martel said.
Select board member Natasha Johnson said that what popped out to her when reading the committee’s interim report was the balance between being able to work in Southwest Harbor and being able to live in Southwest Harbor.
“And when you drive through downtown, it’s starting to become a disturbing trend to me to see open storefronts and to see the decrease in the number of commercial businesses that are here and the variety of those kinds of businesses that are here,” Johnson said, adding that the change presented a question of what is needed first.
“Is it affordable housing to be able to provide people to work in those local jobs? Or do you need those jobs to start to exist so that people can make the income locally to buy a house here to live here?”
John Bennett, a Trenton selectman and real estate agent, at a League of Towns meeting last year, said that certain dynamics of the housing issues facing the region are hard to change, which is wealthy out-of-state buyers who are used to higher home prices.
“They sell a home for $1.5 million, come to Bar Harbor and see a house for $700,000 and that’s a deal. That’s what pushed this out of control,” he said.
Though many local people feel like a $700,000 house on Mount Desert Island is excessively expensive, people from wealthier states and urban areas think it’s a bargain.
Then there are building costs.
“Affordable houses don’t exist anymore” when it comes to building starter homes, Linda Farnsworth Higgins who has been a realtor and broker at LS Robinson since 1987 told the Bar Harbor Story last year.
Higgins said one reason is the cost to buy land and then to bring in septic, utilities, and putting in a well. Even a home without upgrades like granite countertops is coming in around $350,000 or $400,000 to build, she said. With currently increasing interest rates, that’s putting those homes just out of reach for a lot of buyers.
Later this month, the League of Towns will meet. One of its discussion points is looking at a regional approach to finding more year-round homes for people.
This story was originally published by The Bar Harbor Story. To receive regular coverage from the Bar Harbor Story, sign up for a free subscription here.