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Strong real estate market driven by out-of-state buyers

By Susan Mustapich | Oct 27, 2020
Photo by: Susan Mustapich Intown homes for sale in Camden and Rockport are drawing multiple offers, many in cash, in a strong real estate market with a lot of out-of-state buyers.

CAMDEN — Local real estate brokerage owners are seeing a one-of-a-kind year, as homes sell quickly to buyers from out-of-state who are looking for safe havens from COVID-19.

Real estate sales in Knox County for July through September are up nearly 40 percent over last year, according to the Maine Real Estate Information System.

Scott Horty, owner of Camden Real Estate Company, is seeing lots of people trying to buy the same house and prices going up as a result.

The types of properties getting multiple offers are "anything in the village of Camden and Rockport – your standard intown residence is going to have multiple offers," he said.

Recently Camden Real Estate Company listed a house for over $1 million on Chestnut Street. The house had six showings and went under contract within 24 hours, Horty said.

Prices are most definitely escalating due to high demands from conditions arising due to COVID-19, according to Horty. These conditions include a lot of out-of-state buyers and a very short amount of inventory, which was short to begin with at the beginning of the year, he said.

A lot of people are paying cash, which gives them a better position, and makes it more difficult for those who need a mortgage to buy a property, Horty said. This is the case pretty much all across Maine and many other desirable areas that are not urban-based, he said.

Nancy Hughes, owner of Camden Coast Real Estate Company, said "It's been an extraordinarily busy time. Values have increased extraordinarily, beyond typical expectations."

Business was quiet in March for about two and a half weeks, when the pandemic first hit. During those quiet weeks, she was thinking about what she was going to do to take care of her clients and her brokers.

"From there, it just skyrocketed, and it hasn't stopped," she said.

Hughes, the only female brokerage owner in Camden, has been in the business 30 years. She has seen "excitable, fast markets but nothing to meet this kind of pace or frenzy."

She sees out-of-state buyers of both summer and year-round homes moving more quickly, then in past years. She cites COVID-19 and the economic climate that it has created, as giving buyers more confidence.

"If you’re in New York City and used to spending $850,000 for a 750-square-foot apartment, you can spend that same money on a 2,000 to 3,000-square-foot house, with no crime and everything right outside your door," she said. These buyers also see real estate as an attractive investment in the current economic climate.

She sees people who have moved to the area, either to buy or rent, to bring their families here and their kids in the schools here for a least a year or longer.

Hughes was recently involved in two multiple-offer situations, where both sellers waited until all the offers came in before making a decision. The typical-looking house in town is getting multiple offers, she said, and will go under contact as soon as the buyers choose the offer they want. Homes that are not getting multiple offers are selling in about a month.

In this fast-paced market, Hughes sees "local brokerages, appraisers and attorneys working really hard to make this happen. There’s a sense that we’re all in this together and the communication has been really great."

Ellis Cohn, owner of RE/MAX Jaret & Cohn in Camden, calls this year, "without question the most unique market that I’ve been involved in." Since obtaining his real estate license in 1975, he has been through several business cycles, and has never seen anything like this.

When the pandemic first began, the question was whether you would be able to stay in business. Cohn said. "Then without warning the market started to take off on a tear."

This market is driven by out-of-state people looking at the Nightly News, looking at the maps of COVID-19 cases, and seeing Maine is up there on the map shaded yellow for cases, he said.

"They want to get away and have a safe haven. They want to make sure they have internet, and essentially want to be in a safe place." He sees that for a lot of people, it's an emotional move, for the health of their families.

He has heard that classroom sizes at the local schools are starting to increase. The new people coming in to Maine are typically more affluent buyers. In Camden, when they see the new middle school, that's a very attractive draw, he said.

Fifty-two percent of new students in the Camden-Rockport school district as of September have moved here from out of state, according to school district officials. Out of 73 new K-12 students, 38 have moved to the district from another state. Another 17 new high school students have also moved the the area from other states.

Cohen also sees property in other areas experiencing multiple offers and rapid sales.

One waterfront property in Friendship, with a small, tastefully done seasonal cottage on a large lot, went on the market for $729,000 on a Friday and by Monday the owners had five offers, he said. Three of the offers were all cash and above asking price, and two offers had no contingencies except for a clear title.

Sales "sight unseen"

Horty said that when sales picked up in April and May there were more virtual showings, using video and Facetime tours so people could get a sense of a property.

He has even seen a large number of transactions from people who made an offer or bought without seeing property. He said a good number of these people had prior connections with Maine.

"People were just reaching out and grabbing a place where they could go if things got really bad," he said.

Cohn has sold three homes sight unseen, with only a representative and a building inspector seeing the property. He has seen sales where building inspections and all other conditions are waived. "People just want the property," he said. He believes that whenever the atmosphere becomes safer and healthier things may calm down a bit.

Inventory

Horty looked up some data that shows the dramatic drop in the number of homes for sale in Maine in the past five years. The top two factors driving low inventory are high demand from out-of-state buyers and concerns of sellers about their ability to find replacement housing, he said.

On Oct. 19, there were 24 single-family homes for sale in Camden. In a normal market there would be 90-120 homes for sale, he said. It’s a statewide issue.

Historical data on residential inventory shows that in September 2015, there were 20,247 active listings in Maine. In September 2019, the number of active listings was 9,973. This September there were 5,339 active listings in the state.

In Knox County, residential listings in the month of September totaled 806 in 2015, 455 in 2019 and 235 in 2020.

Cohn said due to low inventory, supply and demand is out of kilter, and you get price appreciation and competition. There are fewer lateral moves within the state now. While it's a great time to sell a house, where are people going to go?" he asked. "Buyers feel more secure coming here, than sellers feel about leaving."

With low inventory, Hughes sees new construction, the buying of spec homes and land sales occurring with greater frequency. "As locals, we appreciate the beauty of living here on a daily basis," she said. "When you are from-away that appreciation grows ten-fold. There's a wow factor."

2020 sales

Comparing sales to previous years, Horty said, even with the COVID-19 shut downs for two to three months, this year looks to be one of his company's best.

Cohn said sales have been robust. Land sales are up and "basic bread and butter sales are double." He thinks the market may continue to be active this winter. Normally, in the fall, you generally have the more serious buyer, he said. If the spikes in COVID-19 continue in other areas, the New Hampshire, Maine and possibly Vermont markets should remain good.

Hughes said the normal peak months for closings on home sales are August and September. She pointed out that Maine home sales data for July through September, released Oct. 22, show huge increases over last year, for this quarter, in all but two counties. Knox and Waldo county home sales are up 39% and Lincoln County homes sales are up 43.5%. She sees that following a very busy summer "the interest and the demand is still there."

Homes on Chestnut Street in Camden are typical of the type of residence that quickly go under contract, in a fast-paced real estate market. (Photo by: Susan Mustapich)
Sale pending and sold signs are a common sight around the villages in Camden and Rockport. (Photo by: Susan Mustapich)
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Comments (2)
Posted by: Janice B. MCLennan | Oct 28, 2020 12:29

If you have the address you can look it up on the county's registry of deeds website.



Posted by: Lynn Case | Oct 27, 2020 16:18

And wouldn't it be nice if the newspaper could see fit to go back to publishing property transfers for Knox county so we could see who all these new neighbors are?  That one item was the reason I bought the newspaper.   Now there isn't even that to look forward to.



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