Real Estate: MEREDA’s Forecast Conference highlights story of supply and demand in Maine

“This article was reprinted with permission from MEREDA."  

On Thursday, Jan. 20, over 600 of Maine’s real estate and development professionals gathered both virtually and in-person at the Cross Insurance Arena to learn about the latest trends and predictions in the real estate economy at the Maine Real Estate & Development Association’s (MEREDA’s) Forecast Conference and Member Showcase. “There is so much energy in Maine’s real estate sector right now, and it is amazing to be in a room together to discuss the future of our state and our economy,” said Josh Fifield, MEREDA President. “The Forecast Conference helps set the tone for the year ahead, and I’m feeling positive about what opportunities all this energy will create for Maine.”

From James Marple, a Senior Economist at TD Bank who provided an economic outlook; to Speaker Ryan Fecteau, Speaker of the Maine House of Representatives, who spoke about the need for affordable housing; to an impressive lineup of industry experts; speakers were brought together for an informative conference at the Cross Insurance Arena following Covid safety protocols. MEREDA also streamed the conference for those who could not attend in-person.

The major theme resonating across sectors and presentations was that of supply and demand. Maine simply does not have enough inventory – of affordable homes, of homes in desirable communities, of industrial spaces – to meet the increased demand. Speaker Fecteau kicked off the conference saying that Maine needs more housing in all corners of the state. Aware that many of the presentations to follow would highlight the booming real estate market in the state, Speaker Fecteau shared, “Too many Maine families don’t have access to what is happening in real estate.” He went on to cite the fact that there isn’t a county in the state where a low-income worker making minimum wage can afford a two-bedroom apartment. Speaker Fecteau has helped enact a state companion to the federal low-income housing tax credit and sponsored a resolve to put in place a commission to study local zoning and land use policies that create barriers to the creation of more affordable housing. 

The affordability and supply challenge of the housing market was further underscored in later presentations at the conference. Brit Vitalius of Vitalius Real Estate Group shared his insight on the multi-family market in Southern Maine, which has seen a dramatic rise in prices and has been impacted by “Covid refugees” looking to relocate to Maine.

Dava Davin of Portside Real Estate Group provided an update on the single-family residential market in Southern Maine, a sector that reached $8.7 billion total sales in 2021. “Prices went up 20 percent in one year,” shared Davin. “That is incredible! I wrote ‘WOAH’ in my notes.” While the red-hot residential market is present across the state, 50 percent of the record-breaking sales are in Southern Maine and 35 percent of the buyers are coming from out of state. Davin cited a possible solution to the inventory crunch – new construction – reporting that there had been an 85 percent increase in land sales since 2019. Zoning will play a crucial part in how these parcels are developed. Looking ahead, Davin sees exciting growth opportunities in the state’s rural areas, saying that right now “people drive until they can afford it.”

Surprisingly, the retail sector had a solid year, with Peter Harrington of Malone Commercial Brokers providing a report. “If you didn’t buy a new house, you bought stuff for your old house,” Harrington quipped as he drew the connection between the strong residential market and a strong commercial market, saying, “The two go hand-in-hand.” Citing the success in Rock Row, Harrington saw a trend that he predicts will be replicated for new brick-and-mortar retail development across the state, where there is a symbiotic relationship between service retail, entertainment, and housing. “It’s all about getting people to the retail center.”

Nate Stevens of The Boulos Company provided a slightly different tone to the Conference with his report on the Southern Maine Office Forecast. With flat demand, and tenants back in the driver’s seat of the market, the market is learning to adapt. Painting a complex portrait of the office market, Stevens cited the significant sublease space currently available as being a large influencer on the market for the next few years. “This is a lot of space for our market to absorb,” said Stevens. <

This article was submitted with the permission of MEREDA by Larry Eliason, a Commercial Broker with Butts Commercial Brokers in Raymond. You can reach him at 207-415-2112.