Maine Market Monthly
August 2022
Welcome to the introductory edition of The Maine Market Monthly, PropertyVal’s new monthly market summary report. With the fast-changing real estate landscape, we aim to provide accurate and timely assessments of local market trends.
Seasonally Adjusted Median Sale Prices
Seasonally adjusted state-wide home prices remain flat in August 2022 as compared to July 2022
We have conducted a statistical analysis of single-family, condominium, and manufactured home sales in the state of Maine. Utilizing a similar methodology as the National Association of Realtors, we have annualized and seasonally adjusted the data so seasonal variances do not distort the overall picture. (for more information on this methodology see Seasonality in the Housing Market & Methodology: Existing-Home Sales)
August’s seasonally adjusted home prices experienced a year-over-year increase of 12.36% from August of 2021.
There was no change from July ($328,884) to August ($328,497) in the seasonally adjusted sale prices for homes in Maine.
Since January of 2022, there has been a seasonally adjusted 8.10% increase in sale prices throughout Maine.
Since May, there has been little movement in seasonally adjusted sale prices ($327,273 to $328497).
This level of increase has become common over the last two years; however, we are starting to see a slowing of the amount of appreciation which most likely corresponds to the rise in interest rates over the last six months.
Contract Conditions
August 2022 - Contract Conditions
Anecdotally, we are hearing from appraisers that the number of appraisal gap waivers, financing contingency waivers, and home inspection waivers has been decreasing.
In order to get a better idea of what’s actually happening, we have analyzed a random sample of 10% of our purchase orders from each week in the month of August. This has shown:
Number of Contracts with….
Home Inspection Waivers - 37%
Appraisal Gap Waivers - 8%
Financing Waivers - 2%
Seller Concessions - 17%
Final List Price to Contract Price Ratios
Based on a random sample of 10% of our purchase orders for the month of June, we found that:
List Price v/s Contract Price:
% of Contract Prices Above List Price - 31%
% of Contract Prices Below List Price - 44%
% of Contract Prices Equal to List Price - 25%
August 2022 - Seller Concessions
Seller Concessions Summary
Minimum Seller Concessions……….………………………….. $1,000
Average Seller Concessions………………………………….. $6,510
Maximum Seller Concessions………………………………….. $12,000
In our random sample, 17% of the contracts had concessions, with an average of $6510, or 2.17% of the contract price, and a maximum dollar amount of $12,000, or 1.47% of the contract price.
Interest Rates and Buying Power
30 Year Interest Rates have increased by 2.33% since January.
Interest rates have continued their volatility this month with the 30-year rate starting at 4.99% and ending at 5.55%. Overall, both are still a significant increase from last year and a 2.33% increase from January 2022. However, the differences in buying power between the start and end of the month are noticeable.
Mortgage Interest Rates
Buying Power Remains Suppressed due to Rising Interest Rates
Understanding buying power as it relates to interest rates is paramount when attempting to determine the impact of interest rates on property values. Since the first week of January 2022, 30-year rates have risen from 3.22% to 5.70%. This has a significant impact on affordability and equates to a 24% decrease in buying power over the last 8 months.
Based on a $1500/month payment (with 20% down), this amounts to a reduction of $104,053 in buying power.
Shifts in Loan Purposes
We have seen a significant shift over the last 12 months away from refinances. Purchases have made large increases in overall loan purpose share.
January 2022
Purchase - 43.6%
Refinance - 36.9%
Home Equity - 16.0%
Other - 3.5%
August 2022
Purchase - 54.4%
Refinance - 22.7%
Home Equity - 16.8%
Other - 6.1%
**other can include proposed constructions, foreclosure, loan extensions/modifications, or reviews.