Luxury real estate fuels market growth, median home sales rise



Jeff and Faith Whalen, shown with son, Walker and family dog, Tonk, bought their luxury home, which has a view of Phillips Lake in Dedham in the summer of 2015.  An attached guest house was one of the property’s most attractive features for the Whalen’s who has family from Pennsylvania making frequent visits.

Jeff and Faith Whalen, shown with son, Walker and family dog, Tonk, bought their luxury home, which has a view of Phillips Lake in Dedham in the summer of 2015. An attached guest house was one of the property’s most attractive features for the Whalen’s who has family from Pennsylvania making frequent visits.

Real estate sales in Maine during 2015 were stable, says Marie Flaherty, president of the Maine Association of Realtors.

“The market statewide was pretty stable,” Flaherty said. “We were hovering around historic appreciation rates — around 4 percent.”

However, looking at the Hancock County market, luxury home sales were less robust in comparison with York County.

Flaherty attributed that difference to the proximity of southern Maine to “all the job centers” such as Portland, Boston and New Hampshire.

“It’s easier to get to places from the southern parts of the state,” Flaherty said. “Your job markets are stronger.”

“Economic development and household formation and migration are stronger in the southern counties of Maine,” Flaherty said.

“However, Hancock County had 23 sales over $1 million in 2015 and 21 in 2014,” Flaherty said. “Most of those sales were in Bar Harbor or Mount Desert Island.”

A number of factors affected the 2015 real estate market.

During the past year, the market overall was affected by low interest rates, more confidence in the overall economy and buyers and sellers’ personal financial situations, Flaherty said.

Faith Whalen said the house features a modern kitchen, which was another draw.

Faith Whalen said the house features a modern kitchen, which was another draw.

“First-time buyers, however, still help maintain the momentum in the market,” Flaherty said. Nearly twice as many properties priced at $225,000 and under were sold in comparison with more expensive properties.

The median sales price for a Hancock County home is $196,000. That’s the fourth highest in the state, trailing behind Cumberland County, which leads Maine with a median sales price of $256,000, York County with $234,000 and Lincoln County at $215,000.

The median sales price means that that half of the homes were sold for more than that figure and half sold for less, according to the Maine Association of Realtors.

During 2015, 5,900 properties were sold for over $225,000. Of those higher-end homes, 175 exceeded the $1 million price tag. Most of the properties exceeding the million-dollar mark were located on the coast from Boothbay Harbor south to the New Hampshire border, Flaherty said. However, Hancock County did have 23 of those million-dollar-plus sales.

“Location is the differentiator when it comes to luxury home purchases,” Flaherty said. “Lake homes have moved a bit slower unless they were exceptional properties — most luxury lake purchasers look for privacy, good sandy frontage and sunset views.”

Local agents were satisfied with 2015 and optimistic about 2016.

“Sales across the board were strong,” said Kim Swan, president of The Swan Agency Sotheby’s International Realty. “I think demand is starting to outweigh supply in several market segments and people are seeing that, so some jumps were made to not miss out.”

“I would say a majority of the buyers had some previous attachment to the area, from first-time homebuyers to luxury home buyers — in most cases there was a local connection,” Swan said. “I think local commercial investors are comfortable with the market, and two good-size construction projects are in the works for next summer in Bar Harbor alone, with more to come.”

Acadia Realty Group in Ellsworth had a record year, said owner Steve Shelton.

The Dedham property includes a main house, which is shown, in addition to an attached guest house. PHOTO BY JENNIFER OSBORN

The Dedham property includes a main house, which is shown, in addition to an attached guest house. PHOTO BY JENNIFER OSBORN

“We sold over $44 million last year, which was more than projected and a record for us,” he said.

Shelton attributes the record year to the agency’s diverse market, which covers all of Hancock and Washington counties.

Dan Sargent, president of Sargent Real Estate, said 2015 was similar to 2014.

“Our existing home sales were very good,” Sargent said. “The 150 [thousand] to 250 [thousand] range was very active. There was an uptick in the secondary homes too. Out-of-state buyers were building up a little more confidence and buying up the Branch Lake and the Green Lake properties.”

Land sales are still lagging, which Sargent attributes in part to building costs.

“Anything that required building lagged behind,” Sargent said. “The building costs are just so high right now that everybody is buying existing homes and then renovating and updating.”

Sargent said he thinks that the interest rate increase, as small as it was, encouraged people to buy, if they had already been thinking about it.

“I think with the rate increase a lot of people that were on the fence about purchasing got off the fence,” Sargent said. “They see that the interest rates are probably going to continue to rise and they’re going to act sooner than later.”

Weather also played a part in the 2015 sales.

“The lack of snowfall really helped our late, end-of-the-year run,” Sargent said. “It’s extended our season. Typically, weather will factor in the mindset of people.”

“It’s funny because people don’t think about the real estate market being seasonal, but it really is,” Sargent said. “When we get a couple of big storms, people shut down.”

Maine home sales jumped more than 22 percent in November 2015 over the same month in 2014, according to the Maine Association of Realtors.

“The mild weather and threats of rising interest rates certainly has had some impact on buyer decisions,” Flaherty stated in a press release announcing the increase. “The winter season is still a great time for sellers to consider listing their home, as life changes always prompt the need to sell and buy homes —regardless of season.”

 

Jennifer Osborn

Jennifer Osborn

Reporter and columnist at The Ellsworth American
News Reporter Jennifer Osborn covers news and features on the Blue Hill Peninsula and Deer Isle-Stonington. She welcomes tips and story ideas. She also writes the Gone Shopping column. Email Jennifer with your suggestions at [email protected] or call 667-2576.