Rarely does a week go by when I’m not asked this question. Whether from a seller ready to list, a local buyer who missed out on yet another home, or simply a curious friend or neighbor, they are all asking, “Where are these buyers coming from?”
It’s a seller’s market, with low inventory, robust buyer demand, and highly competitive offers. The underlying perception is that this record-setting market is driven by what Mainers often call folks “from away.” The logic goes something like this. People from away, likely from larger markets with higher values, think our prices are a bargain and are gobbling up properties with over asking, cash offers. They are pushing out local buyers who simply can’t compete. These from away buyers have reverse sticker shock as a similar home in Boston or Brooklyn, N.Y., would sell anywhere from 50% more to double the price.
There is an in-migration from a host of larger metropolitan areas as buyers look for a more suburban or rural experience. The pandemic has accelerated the work from anywhere trend, and with the ability to bring your higher city salary with you, why wouldn’t that anywhere be Maine? Additionally, we’ve seen people buying second homes in Maine, often sight unseen, as a possible escape from a future COVID 2.0.
Although these perceptions and stories are accurate, a look at the numbers show that the influx from away is much more limited than what we might think. Maine Real Estate Information Systems compiles numbers that show where single family home buyers are moving from each year.
Of nearly 21,000 homes sold in 2020, 70% single-family purchases in Maine, 14,158 home deals, were made by people already living here, down from 75% in 2019. People move within the state for all kinds of reasons: downsizing, right sizing, upsizing, urbanizing, to be closer to employment or for retirement.
So, the other 30% were “from away” — but, in many cases, from not that far away.
Of the out-of-state pool, not surprising, the data show that Massachusetts residents bought 1,833 homes, followed by New Hampshire residents, who bought 812 homes.
New Yorkers bought 414 homes, followed by Floridans with 373 and Californians with 277. Other states of significance include Connecticut at 249 total sales, New Jersey at 219, Texas at 144 and Colorado at 120.
Some other numbers are a bit unexpected. Only 31 sales were to international buyers, likely caused by COVID travel restrictions.
Throughout 2021 and beyond we expect that the “from away” work from home crowd will continue to account for an increasing number of residential sales in Maine. We fully anticipate that the number of people moving from the areas listed above will go up, both in percentage of sales and numbers of sales. That obviously means that the downward trend in single-family purchases from inside the state will continue. While Mainers can sell high, many are reluctant to enter a tight buyer’s market. As they stay put or move to less expensive areas of Maine or beyond, more people ‘from away’ will migrate in.
Of course, all real estate is local. In writing this, I realize that to make broad assumptions, we need more precise data showing not only the states, but metro areas, counties, and cities buyers are coming from. We also need to see this data trended over time to predict where Maine’s cities and towns are headed.
If you’d like to learn more about who is buying near you, how best to market to them, and how to find your next home at the same time, we encourage you to contact a member of the Maine Association of Realtor that specializes in your town or neighborhood.