Facebook for Herrigel Kennedy      

Markets in Greater Portland on the Rebound

3 comments

By Kate Hodgson

Portland Head LightI have compiled the information in this report to help my clients stay informed about market trends and to help them make critical decisions while navigating the Greater Portland real estate market.  Data are gathered from records on the Maine Real Estate Information Service (MREIS) also known as the multiple listing service (MLS).  The report presents information from 1998 forward as records prior to that are less reliable

The information is consolidated into 4 categories based on market trends: 1. Portland and South Portland single family homes; 2. Cape Elizabeth, Falmouth, Scarborough and Yarmouth single family homes and condos; 3. Gorham, Gray, Westbrook and Windham single family homes and condos; and 4. Portland and South Portland condos.

Please note: for simplicity I will refer to the first quarter as Q1 and so on.

General trends in Q1 2012:

The big story of 2012 so far is the lack of inventory.  Sales are up and inventory is down but an increase in prices has not yet followed because of the continuing impact of distress sales on the market.

 

Interest rates are still low but leaning upwards and investors are trawling for opportunities with the increased confidence that a market recovery is underway.

 

Some areas of the country are reporting a shift to a sellers’ market.  Portland and South Portland show signs of moving in that direction and the ripple effect will start to show in the outlying areas.  Additionally, colleagues have been reporting on an increase in multiple offers.

There is still a high level of distressed property on the market keeping a price increase at bay but that will change if current trends continue.

The notable exception to this trend is the condo market where sales have slumped.

1. Sales:

Sales have increased in all the areas observed.

In Portland and South Portland the number of single family homes sold in Q1 rose to 112, up from 98 in 2011.

In Cape Elizabeth, Falmouth, Scarborough, and Yarmouth, the number of properties sold in Q1 climbed to 132 up from 105 last year and the highest level since 2007.

In Gorham, Gray, Westbrook and Windham, the number of properties sold stayed fairly close to the level in 2011 at 119 units sold.

 

 

2. Inventory:

While sales have gone up, inventory has gone down; creating the best ratio between the two that we have seen in 5 years or more.

In Portland and South Portland the ratio dropped to 1.73 new listings for every property sold, down from 2.04 in 2011, and almost matching the 15 year average.

In Cape Elizabeth, Falmouth, Scarborough and Yarmouth there were 1.91 new listings for every property sold, down substantially from 2.41 in Q1 2011, below the 15 year average, and the best ratio since 2005.

In Gorham, Gray, Westbrook, and Windham the ratio was 2.14 new listings for every property sold in Q1 2012, down from 2.28 last year but above the 15 year average.

 

 

3. Prices:

Sales are up, inventory is down, but an increase in prices has not yet followed.

In Portland and South Portland the average sale price declined 7% from the previous year.

In Cape Elizabeth, Falmouth, Scarborough and Yarmouth the average sale price remained largely unchanged.

In Gorham, Gray, Westbrook and Windham the average sale price also remained unchanged from last year.

Foreclosures and short sales are still keeping prices from gaining traction.  Many pundits have predicted an increase in prices by the end of this year or into 2013.

4. Days on Market (DOM):

The number of days it is taking a property to sell has remained high, again a reflection of the number of short sales on the market and the length of time they take to work through the system.

For example, of the 34 properties identified as distressed sales that sold in the first quarter of 2012 (9% of the market), the average Days on Market was 155, significantly higher than the average for all other sales at 115.  It is also worth noting that distress sales sold for an average of 89% of the list price at time of sale, 84% of the original list price.

Condos (Portland and South Portland):

The condo market in greater Portland. .bucking all the favorable trends: sales are down, inventory is up, and the average sales price continues to swing rather dramatically.

 

In Q1 2012 the number of sales dropped slightly from 51 in Q1 2011 to 45 in Q1 2012 and the number of new listings rose slightly from 114 to 119.  The average sale price slumped from $259,040 to $199,652, down 30% from Q1 of last year.

 

As of April 8, 2012 there are 216 condos currently on the market in Portland and South Portland with 48 under contract, or 22% of inventory.

Multi-units (2-4 unit properties in Portland, South Portland, Westbrook):

Multi-units are following the favorable trend with a big drop in new listings, an increase in sales, and very low inventory.  There were 40 new listings in Q1 2012, down significantly from 67 in Q1 2011 and the lowest number in the last 15 years. The number of sales increased from 20 in Q1 2011 to 37 in Q1 in 2012.  This brought the ratio of new listings to units sold down to 1.08.

 

The average sale price increased 4% and the average price reduction was 95% of the list price at time of sale. The average Days on Market was 93.

As of April 8, 2012 there are 84 2-4 unit properties on the market in Portland, South Portland, and Westbrook, with 23 of those under contract, or 27% of current inventory.

Leave a Reply