Maine real estate index inches toward pre-recession level

Posted May 17, 2016, at 3:21 p.m.
Last modified May 27, 2016, at 11:32 a.m.

PORTLAND, Maine — Real estate activity in Maine continues to inch toward levels last seen before the housing market collapsed and took the rest of the economy with it.

The Maine Real Estate and Development Association revealed during its spring conference Tuesday that its quarterly index hit a level on par with the fall of 2006.

The index uses the start of 2006 as a benchmark for levels of commercial, residential and construction activity, set at 100. The index rose above 90 in the first three months of 2016, with the commercial real estate sector remaining the closest to a full recovery.

Mike O’Reilly, senior vice president and Bangor Savings and MEREDA’s president, said in a news release that the sharp rise in commercial activity was partly due to the two major sales of One and Two Portland Square and 100 Middle St. in Portland, which boosted the square footage sold in early 2015.

“The actual dip in commercial exclusive of these very large sales was small,” O’Reilly said.

“The residential component was a primary positive driver; sales of existing homes and new mortgage originations both saw strong increasing trends.”

O’Reilly said pressure on the market for existing houses, where sales volume and prices have stabilized, has prompted new construction, despite that industry’s workforce shortage.

Gradually rising construction employment, mortgage originations and housing permits have driven up the construction portion of the group’s index in recent quarters, according to data compiled by MEREDA.

O’Reilly said construction in hospitality, senior housing and condominium markets contributed to past increases in construction activity, with the latest spike coming from residential building construction.

Harper Lee Collins, a broker with Re/Max Heritage in Yarmouth, wrote in this year’s MEREDA report that residential real estate in the booming Greater Portland market has started to approach more typical levels, measured by the rate at which new properties are scooped up.

Census data for 2015 showed building permits, by units added, were up by 14 percent last year, with the fastest growth in buildings of five or more units.

At the current rate of purchasing, it would take about three months to sell all of the single-family homes on the market in the Greater Portland area and about 4.5 months to sell all of the condos on the market.

 

SEE COMMENTS →