Welcome to the Maine Real Estate update with Michael Hamilton. This column will focus on local and national information in the local, national, and worldwide economy that effect you and your Maine real estate investments.

Typically it will be a succinct, monthly overview looking at some regular key indicators, as well as unqiue events that may have occurred.

For our first installment, I will give a summary of 2023 and a bit of a forecast for 2024. As always, your feedback is valued and respected.

Looking back over 2023 in Maine and nationally, the one thing I really want to hit home is, as Mainers, we buck the national real estate trends. Reading the big headlines can be fun and helpful, but please remember that, as a state (and even in unique towns), we are in a cycle of not lining up with the national headlines.

What do I mean?

Consumer Price Index

Going into 2023 there was a LOT of doom and gloom. Experts and everyday people were concerned there would be a real estate market “crash”, especially with inflation so high and interest rates expected to climb.

Some people predicted 30-35% loss in real estate value (I was not one of them :)

We have been enjoying years of double digit annual appreciation in real estate and as we started the year things did soften. Nationally we started the year with 1.9% appreciation year over year (YOY) with Maine at 11% YOY. Already, you can see Maine’s market does not always follow the national trend.

As the year went on, the YOY number got as low as -3% nationally - in May (homes in fact had briefly lost value)  and +4.1% for Maine in March (we never had a negative monthly last year) - again a big difference.

Nationally home values ended the year heating up with 4% appreciation YOY. Meanwhile Maine has seen a several month slow down going from 13.4% YOY appreciation in September to only 6.8% in December.

Overall Maine is still a hot market and investing in real estate here will no doubt make you money in 2024.

But as you hear the news, make sure the source is local and your decisions are local and current. In the current RE market it’s easy to get behind the trends or misinformed geographically.

Maine spent most of 2023 with less than a week on the market. However, since the summer, we have been on a steady climb, ending the year with a median 16 days on market.

We started 2023 with 26 median days on market and spent the hot Maine real estate months (summer) with 6-8 days on Market

🚨Predictions:

➡️ I would expect interest rates to drop 3 or more times in 2024. But I think it will come slowly as the US continues to struggle with inflation.

➡️ As we get closer to average rates of 5.5% or less, I would expect inventory to tick up and buyers to flood back to the market.

➡️ I think home values will rise throughout the year but we could see a slow start to the year and by year end I do not think we will see those 10% appreciation like 2019-2022. I would expect us to be closer to the historical average of 4% appreciation YOY.

➡️ Sellers should be prepared for longer days on market and buyers can look forward to a better negotiating position, depending on town and type of home.

Questions or comments? Please reach out to me below

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