I personally would not consider this market a “crisis,” but many people are arguing that side of the conversation. I hear what they are saying, and I do not deny that a lot of the current numbers leave many folks feeling dim about the future. I just do not consider this a true “crisis.”
The current median home price in Maine is $390,200. That is a new record for Maine, beating out the median price that was set in 2023 about $360,000.
I have been working with a few younger buyers looking to purchase their first home. I am helping them navigate this market which is moving quickly and not showing signs of slowing down. Both of these clients have done all the right things. They have paid their bills on time, established good credit with scores over 700, and have a solid savings account to cover a down payment and pay their closing costs.
They are spot on ready to go and are willing and able to pull the trigger and purchase a new home. The problem is affording to purchase that $400,000 home on a single income. Fitting that payment with taxes and insurance into a person’s budget stretches it and could break it. Even with two incomes it can be very tight.
Yes, there are lower-priced homes in certain towns on the outskirts of Cumberland County. To reach those you are looking at a 45 minute to an hour commute if you work in Portland or South Portland. We have also looked at multi-family home options, which in my opinion is almost always a great way to start with your first home. It not only helps you with your mortgage payment and costs, but it will also continually provide you with income down the road and potentially be the start of your real estate portfolio. However, the question remains. How we overcome this issue with buyers being priced out of the market in certain areas?
Inventory is not going to increase greatly this year. With interest rates in the low to mid 6 percent range, potential sellers who bought or refinanced three to five years ago and have 3 percent interest rates are just holding tight and not selling. They are just looking at the current market values and interest rates of over 6 percent, and they are asking themselves, where am I going to move to, and why double my mortgage payment?
New construction prices are just going up higher, so there is no relief coming with that market. Are there other options out there for buyers who want to be at or under a $375,000 purchase price and under a 45-minute commute? I believe there are options out there for those who have some flexibility in location and timeframe to close on a property.
Five Star Realty is working closely with Primary Residential Mortgage (located here in Windham) and a few investors to find some of these solutions.
Here are a couple of the options we have in the works. I will lay out the general idea of what some of these options are, and you can decide if this concept might work for you.
New construction options at 100 percent financing for VA loans for our veterans. These include both modular and manufactured homes.
There are also programs for Maine State Housing First Time Homebuyer new construction loans with little money down. You don’t have to be a first-time home buyer to qualify for these construction loans.
There are some FHA options, and the seller/builder can provide some closing costs. And, there are some fantastic modular and manufactured home options that are going to be market changing for some people to get into a home that is affordable. This is a very real potential solution for many buyers.
Anyone who would like to learn a little more about these options and how they might help you can call me directly anytime. You can also call Terry Robinson or Stephen Jordan over at PRMI to learn more. It’s simply a phone call to learn a little bit more about what your options are as buyers.
This article was written by Matthew Trudel, Owner of Five Star Realty, Windham, 207-939-6971. <
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