Real estate brokers use programs like Matterport 3D Virtual Tours to show out-of-state clients homes for sale, like this South Bristol listing. (Screenshot courtesy Newcastle Realty)
In Jim Drum’s 35 years in Maine’s real estate industry, he has never seen a year quite like 2020.
Drum is the president and general manager of Drum and Drum Real Estate, of Damariscotta, and leads a team of nine brokers, whose phones have been ringing off the hook. According to Drum, there is more demand for Maine real estate now than there has been since 2004, before the housing market collapsed and the economy slid into recession in 2008.
One of Drum and Drum’s properties saw 35 showings in a two-week period earlier this summer.
“That’s the most I’ve ever even heard of,” Drum said.
The dramatic increase in demand, however, is far exceeding supply of properties for sale.
“We don’t have enough listings to sell,” Drum said.
This tight market has created a highly competitive buying environment.
According to the Maine Association of Realtors, the number of individual units sold in Lincoln County between March 1 and May 31 dropped from 138 in 2019 to 89 in 2020, a 35.51% decrease. During this same three-month period, the median price of units sold was 18.04% higher in 2020 than 2019.
Drum speculates that the region’s normal pool of sellers – elderly homeowners moving into retirement or assisted-living homes – are more hesitant to sell now, following “super spreader” COVID-19 outbreaks at Maine retirement homes this spring.
What is certain is that the industry is in a “seller’s market.”
Dennis Hilton, president of Newcastle Realty, noted that the average stretch of time a Newcastle Realty home spends on the market has fallen from 60 days to a mere 10.
“We’ve seen offers being made on homes clients have not seen with their own eyes,” Hilton said.
Most of these buyers are from out of state – particularly large metropolitan areas like Boston and New York. They are looking to escape densely populated urban neighborhoods where the COVID-19 pandemic has kept them cloistered in small homes or apartments with limited access to the outdoors.
Drum described one of his company’s clients, a family from downtown Boston who is searching desperately for a property in Maine.
“They have neighbors cheek to cheek. Every time they go out they pass hundreds of people,” Drum said. “They can have a life up here that’s better than what they have in Boston.”
The pandemic has prompted millions of Americans to begin working from home instead of office buildings. So long as a home has internet connectivity, many professionals are discovering for the first time that they can continue to work their office jobs from anywhere. And many of them are choosing Maine.
According to Jim Cosgrove, a Damariscotta-based broker with Keller Williams Realty, this trend has changed the demographic composition of his clientele.
“Right now we’re seeing younger families coming to the area and that’s exciting,” Cosgrove said. “It’s a complete change in the dynamic. It’s a very exciting time to be in the industry and in the area.”
However, these changes are contingent on the infrastructure that makes speedy and reliable access to the internet possible.
“One of the amenities they seek is fiber connections,” said Hilton.
According to Cosgrove, that particular amenity has become a critical asset in a property’s market value.
“People walk into a home and the first thing they ask is, ‘What is the upload speed? What is the download speed?’” Cosgrove said.
“Folks like Tidewater (Telecom Inc.) would tell you they are out straight trying to keep up with the demand from people who are moving to the area and working remotely,” Hilton said.
Brokers are able to sell homes safely and efficiently with the help of new technologies that allow prospective buyers to virtually visit a house, like Matterport 3D Virtual Tours.
The software has been around for five years, but has become indispensable to agencies in recent months because it eases an increased burden on brokers, who are now responsible for practicing and enforcing protective guidelines for clients during in-person tours.
“These new online tools have changed our market dramatically,” Drum said. “It helps us be much more efficient.”
Real estate transactions are considered “essential business,” so out-of-state clients who do decide to visit a home in person are exempt from mandatory 14-day quarantines or testing requirements applicable to visitors from most states.
Cosgrove, though, takes an added precaution of his own before meeting with a buyer from out of state.
“I don’t want to get sick,” Cosgrove said. “So I call them and we have a heart-to-heart talk before someone comes up.”
Per Maine’s guidelines for real estate businesses, prospective buyers and brokers must both wear masks and sometimes protective foot coverings to protect all parties from the risk of infection during in-home tours. Clients are advised not to touch anything in the homes, and brokers wear disposable gloves to open and close doors.
Though the pandemic has created a unique market and singular selling dynamics, it has also accelerated existing trends that will change the industry permanently, like the digital touring technology and increased interest in broadband connectivity for telecommuting.
“It’s a whole new world,” Drum said. “It really is.”
