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.
Maine’s largest metropolitan area was ranked among the top 12 places in the country that are seeing rapid growth in their luxury housing markets.
Realtor.com assembled a list of the 12 U.S. cities seeing higher numbers of million dollar properties in the last year, either due to rising luxury construction or existing homes gaining value. The Portland area ranked 12th on the list, released earlier this week.
The real estate website, which has listings and tracks market data, used the Census definition of the Portland and South Portland metro area, encompassing all of Cumberland, York and Sagadahoc counties. The region covers more than 2,000 square miles and has a population of nearly 572,000, Census data show.
Roughly 14% of southern Maine’s new construction is considered luxury, the report found. This puts it behind the national average of 18% and far lower than places like the Fayetteville region in Arkansas, where 41% of new housing is luxury.
However, more than 21% of homes on the market in the Portland region were listed for $1 million or more over the last year. That’s significantly more than the national average of 13.5%, according to the report.
The data suggests Maine’s growing luxury housing market is fueled by existing homes that are gaining value over time, sometimes through renovations and upgrades.
This comes as no surprise, as housing prices in Maine skyrocketed during the pandemic and remained high since then. A study by MaineHousing found the state’s median home price grew by more than 50% from 2020 to 2024.
This increase was fueled by more people, including those from other states and large cities, looking to buy property in Maine during the pandemic while inventory was low. High demand coupled with low supply increased asking prices, pushing homeownership out of reach for many low- and middle-income families.
Of the 504 single-family homes on the market in Cumberland County as of Thursday, more than a quarter had asking prices of $1 million or more, according to Zillow.
To earn a spot on Realtor.com’s list, cities must have a median housing price below $1 million, but at least 10% of all active listings need to be priced at $1 million or higher, according to the company. Additionally, the average monthly count of million-dollar-plus listings over the past 12 months needed to fall between 200 and 500.
Maine, especially southern and coastal areas, has long been a sought-after spot for second homes. Those vacation homes tend to be pricey, especially because there are a limited number of them, which likely contributes to more Maine properties selling for at least $1 million, said Liz Henry, associate broker at Maine Dream Properties in Portland.
“People want what Portland has to offer,” Henry said. “There’s still a strong desire to live in southern Maine, and all of that is driving prices up.”
While some luxury condos have been built in the Portland area in the past few years, Henry said new construction, including high-end units, has slowed to a crawl. This has contributed to Maine’s housing inventory remaining low, which keeps prices high.
Much of Maine’s housing is older, but it can still be valuable if it’s in a prime location, such as on the beach or lake. It’s not uncommon for someone to buy an older home, then renovate it or demolish it to build something new, further increasing its value, said Chris Lynch, president and broker of Portland-based Legacy Properties Sotheby’s International Realty.
The luxury housing market has also remained active despite high mortgage rates that may be deterring others from buying. This is because luxury buyers often pay cash rather than taking out a mortgage,
“Mortgage rates have probably been the single-largest hindrance to buyers,” Lynch said. “But, luxury buyers are still active. The market has been performing well.”