Maine’s housing market is looking promising for buyers in the final month of 2024 despite prices increasing substantially in comparison to this same time last year. The median price, however, has dropped about $10,000 since October.
Maine’s median home sale price for November of $385,000 represents an 8.45 percent increase over November of 2023. Nonetheless, this is coupled with a 6.81 percent increase in the number of homes sold during this same period.
“Prospective buyers are in a better situation than they were a year ago across many markets in Maine,” said Paul McKee, President of the Maine Association of Realtors. “The number of homes for sale has increased, price appreciation is slowing, and the economic forecast is good.”
“We’re seeing promising signs that the real estate market is beginning to show signs of shifting slightly, with supply increasing and slower price appreciation,” McKee added.
In New England, sales rose by 6.3 percent since last year while the regional median home sale price increased by 9.9 percent to $475,500.
Nationally, 7.4 percent more homes were sold last month in comparison to 2023, with a median sale price of $410,900, an increase of 4.8 percent over last year.
Maine’s median sale price for November of this year is well below both of these figures.
Based on county-level data, Washington, Sagadahoc, and Piscataquis Counties saw the biggest drops in the number of homes sold this past month, while York, Franklin, and Hancock Counties saw the greatest increases.
At this same time, York, Oxford, and Kennebec Counties saw the highest price increases, while Piscataquis, Washington, and Franklin Counties saw the most substantial decreases.
For the first time in recent months, Cumberland County was not among those which had the highest prices and greatest number of sales.
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The rising cost of homes in Maine has caused many homeowners to face substantially larger property tax bills as a result of revaluations being conducted throughout the state.
Under Maine’s constitution and state law, real estate must be assessed “according to [its] just value,” which according to case law, is equivalent to its market value, or the price for which one could reasonably expect it to be sold.
[RELATED: Sticker Shock — Maine Homeowners Burdened by Property Tax Hikes Following Recent Revaluations]
A law approved by the Legislature in 1975 directed municipalities to have a minimum assessment ratio of 70 percent, meaning that the tax assessed value of a given property is not supposed to be less than 70 percent of its market value.
Generally speaking, municipalities undertake revaluations when they fall below this 70 percent threshold, whether that be due to the passage of time or a significant shift in the housing market.
Tied to this ratio are the value of residents’ property tax exemptions — such as the homestead exemption. For example, if a municipality’s property assessment is calculated to be at 80 percent of market value, homeowners are only eligible to take 80 percent — or $20,000 — of the state’s $25,000 homestead exemption.
Since 2019, home prices in Maine have nearly doubled, according to data tracked by the St. Louis Federal Reserve. Those new sale prices contribute to the new valuations of houses that aren’t on the market, which means Mainers who have owned their homes for 20 years or more are suddenly on the hook for paying twice the property tax — even if their income has hardly grown.
