Portland home market cooled in the first half of 2022 ahead of the June interest rate hikes
Portland, ME – The real estate sales statistics for Q2 and first half of 2022 reflect a continued cooling of the market with the impact of June interest rate hikes still to come.
“We did see an immediate buyer pull back after the June Federal Reserve interest rate hike”, said Benchmark Real Estate owner, Tom Landry. “For some listings, we went from 2-3 showings per day to zero for several days.” He says the impact was immediate as interest rates jumped from 3-4% to over 6%.
In the weeks following the market cooled and sellers had less of an upper hand. “With less competition, buyers were able to ask for price reductions and inspections,” said Landry. Two things that would often doom a buyer’s chance of winning out in the bidding wars of the past few years. However, he noted that with continued low inventory and ongoing demand from out of state buyers, it’s not yet a buyer’s market. He added, “many are fearful of further interest rate hikes, and are opting to buy sooner rather than later. So, with continued low inventory, the market is still tight.”
While interest rates many seem high given the historically low rates of the past decade, many current homeowners will remember when rates of 7 or 8% were considered low. And while rates appear to be poised to rise, Landry says it doesn’t feel like the Greater Portland market will be as impacted as some believe. “People still need to buy and sell regardless of interest rates, southern Maine has become a popular place to move to, and our market is seeing more cash buyers than ever before,” he said.
Benchmark Real Estate used data from Maine Listing to compare the first half of 2022 to the first half of 2021 and the last half of 2021, noting that the result of the feds rate hike won’t be reflected for a couple months. “While a market crash doesn’t seem as likely, a continued cooling of the market is expected as interest rates rise,” said Landry.
Data Highlights
June 2021 to June 2022
- Median sale price
- 13% increase for all residential property types and 8.75% vs May 2033
- 6% increase for single families from $464,500 to $493,750
- 4% increase in 2-4 unit multi-families from $720,000 to $747,500
- Number of sales
- 13% decrease for all residential property types over 2021, but 37% increase over May 2022
- 38% fewer condos sold over 2021
- 100% increase in number of 2-4 unit multi-families sold from 9 to 18
Quarter 1, 2021 vs Quarter 2, 2022
These numbers show that the market was cooling even before rate hikes were announced.
- All residential property types
- 0% change in median sale price
- 17% drop in number of sales
- 0% change in days on market
- 11% drop in number of listings
- 16% decrease in sales volume
- 5.12% increase in median sale price per sq/ft
First Half of 2021 vs 2022
More evidence that the market is cooling off with little change in nearly every indicator over the same period last year.
- For all residential property types
- 1% drop in median sale price
- 25% drop in number of sales
- 14% decrease in days on market
- 17% drop in new listings
- 21% drop in overall volume
- 1.5% increase in price per sq/ft
- Of Note
- Single family values increased by 3% with median price per sq/ft up by nearly 16%
- 2-4 unit multi-families increased in value by 7% from $644,500 to $690,500
The statistics below were prepared by Benchmark Real Estate using data from Maine Listings for Portland. See past stats on Benchmark’s blog.
