Condo Media - April 2013 - 16

by Jack Carr, P.E., RS, LEED-AP

C A I

R e g i o n a l

N e w s

mAINe

Housing market Update
Trends and Opportunities

he license plate states Maine is
“Vacationland.” Of course that
is true, but things are changing. Maine still holds the title
of having the most vacation homes in
America, but the reduced availability
of coastal property is shifting seasonal
and year-round living inland.
The state’s population has not
budged by more than a hundred
people in the last four years, but the
demographics are in flux. Portland
currently has the youngest population
in Maine. Young professionals are relocating to Maine despite the lack of corporate headquarters, while the retiring
boomers are being lured to the greater
Portland area as a result of world-class
restaurants, an expanding arts scene,
and favorable magazine reviews. This
is having an impact on the residential
housing market, particularly the apartment and condominium sector.

By the Numbers

According to the National Association
of Realtors, 2012 saw New England
single family unit sales up 14.8 percent,
only slightly higher than the national
average, but Maine was up 18.6 percent. In 2012, Maine’s secondary cities
saw significant increases in median sales
prices over 2011, with the top three
being Auburn (17 percent); Bath (17
percent); and Saco (11 percent).
Part of this increase is due to the
low-priced properties of the past
disappearing from the market, as 2011
had 500 foreclosures but 2012 experienced only 100 foreclosures. But
most of this price increase is due to
supply and demand. I call it the FUD
factor: Fear, Uncertainty, and Doubt.
Though lending money is available,
16

Condo Media • April 2013

the concern of the economic future is
still pervasive, holding back developers
from speculative building, resulting in
Maine being well behind the national
and regional averages for new single
family residential building permits.
Since 2000, 90 percent of Maine’s
population growth and movement has
gravitated to the urban and service
areas, with the largest sector growth
being non-family and single male-only
households. This is starting to put
pressure on the apartment market in
these urban areas, resulting in a lack of
apartment stock, vacancy rates below
2 percent, rising rent averages, and reduced pressure to convert apartments
to condos.
Condominiums are often the
alternative to apartment living or, in
a youth-driven market, are the entry
level for home ownership. This market
can be seen in the Portland statistics
of condo sales. Of the 207 units sold
in 2012, the breakdown of sales to
price range is as follows:
149 units .......................... < $250,000
38 units ............. $251,000 - $350,000
20 units ............ $351,000 - $545,000
Currently, the largest inventory of
condo units falls in the $351,000 $545,000 bracket. Developers are taking notice with six major condo projects under construction in the Portland
area alone to match this market need.
If there is one common denominator
in the new urban condos coming on
line, it is that they meet the new desire
for a “Walkable Neighborhood.” This
has been defined at the Maine Real
Estate and Development Association’s
January forecast conference as:

• Has a center
• Has people
• Promotes mixed income and mixed
use
• Has parks and public spaces
• Has good pedestrian design
• Close to schools and workplaces
• Has complete streets

Cashing In

With better times coming to the Maine
condo market, sellers should be considering how they should present their properties. It goes beyond just pricing the
property properly and getting good real
estate advice. In the condo world, you
have to consider not just the appearance
of your unit but the entire complex.
Whereas a unit owner’s investment
in a bathroom or kitchen upgrade can
realize a return in the selling price in
the 60 to 65 percent range, improving
the exterior building envelope components can show greater returns in both
real terms and the leveraging factor
due to that fact that the funds used
are allocated to the entire community.
Experts in real estate pricing estimate
vinyl window and deck replacements
can produce a 76 percent return, while
siding upgrades can also produce
significant returns (vinyl, 76 percent;
fiber-cement, 80 percent). A wise future
condo unit seller should be the first one
to raise his or her hand at the owners’
general assembly meeting to approve
the capital budget to enhance their curb
appeal. It just makes cents. CM
Jack Carr, P.E., RS, LEED-AP, is
senior vice president with CriteriumEngineers in Portland, Maine. He is a
member of the Condo Media board and a
frequent author and speaker.

Condo Media - April 2013

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