Two years ago, I presented my historian’s report to the Kennebunk Fire Society annual dinner and meeting. My topic included the events and emotions that led to Massachusetts’ decision to abandon Maine as part of the Missouri Compromise of 1820.
That’s a pretty dry subject, even for a retired American history professor, especially after diners feasted on turkey dinners with all the trimmings. I launched a personal joke that our local real estate sales meant that today’s Massachusetts may be suffering from buyer’s remorse. Could this be part of a secret conspiracy to bring Maine back into Bay State’s fold?
Some of the guests laughed. Some of the more recent mass emigrants told me later that they were not happy. None of us could have imagined what was to come.
Prior to 2020, Maine’s real estate market followed a fixed pattern, generally favoring the buyer. It was not rushed, as there has never been a shortage of available housing. The buyer has often asked a bank for a letter certifying that you were prequalified for a mortgage loan.
Open houses were common and buyers had a lot of choice. Once the decision was made, it was a pretty standard offer. Subjected to 90 to 95 percent of the listed price, it required 80 or 90 percent bank approval (a certain deal killer if not obtained), and inspection, which offered the potential buyer the opportunity to nitpick the final price. Sometimes a rare find came in and sold for a few thousand more than the listing price.
Once the final contract was signed, the savings and loan began their paperwork, a credit check was performed, title was sought, and a deed was prepared. Spring was the busiest time. The families wanted the children to go to school in September. At the time, it was mostly a level playing field to realize the American dream of owning your own home. It had been that way for our parents too, and it seemed to continue.
I was not far away with my 2019 dinner quip. There had been a marked âfarâ increase in our local housing market. Empty nests were downsizing or moving to Florida. The prices appreciated. Soon the locals were shaking their heads as 1% discovered us and teardowns were replaced with McMansions.
A trend was developing.
To the south of us, a growing number of grass-is-greener-on-the-other-side dreamers were tired of rising crime rates, long car trips to work, high property taxes, urban scourge, polluted air and just too many people.
Many had fond memories of Maine from camp week or family summers by the lake or lakefront. Some had grown up in Maine, but left after graduation. The lure of Maine still called them. Then COVID hit and as infection rates increased elsewhere, Maine began to look like a safer shelter amid a raging blizzard.
The rush was on, but none of us could have anticipated this new steroid-bloated real estate market. It was also happening in the midst of a deadly COVID pandemic that was effectively shutting down New England.
Many local homeowners, hearing rumors of escalating house prices, were drawn in, but were reluctant to put their properties on the market during a pandemic. Our real estate agents had to ditch their traditional open houses, but quickly rallied around and had virtual tours and up to 50 professionally taken photographs for each property listed on the agency’s website. They’ve compiled lists of their most committed, spirited, and desperate house hunters.
In the beginning, there were only a small number of properties, ranging from the starter house or condominium to luxury real estate. The hottest sector was the $ 300,000 to $ 600,000 range. Given the law of supply and demand, a raging bidding war erupted in early spring 2020 and continues unabated today.
Homes started selling within the first 24 to 48 hours they were listed. The real estate signs were going up and down so fast that they started to look like our local version of the Whack-a-Mole carnival game. Sales signs have appeared in all neighborhoods. The market was so hot that some of the bidders made their bid without being able to walk into the property. The old standard offer exercise has been abandoned. He was now replaced by the one with the largest stash of money and the fastest pen.
Out-of-State bidders, hoping to overtake the pack, made all offers in cash with certified bank letters attached indicating the money available for properties with listing prices already. very swollen. To improve their chances and eliminate any time wasted on counterbids, they included escalation clauses, indicating, if they were outbid, by how much they were willing to go higher. We are familiar with the escalators, which added up to $ 75,000 more to the initial offering.
More and more buyers, breathless at hearing these staggering sale prices, put their properties on the market. The competition was so intense that many cash buyers abandoned the inspection requirement, thus becoming responsible for any necessary repairs or property defects. Many wanted a faster closing date. The money in their checkbooks must have gotten a hole in their pocket or purse.
Much like COVID and its Delta variant, no one knows if or when this Maine real estate rush will end or its effects on our three cities and our daily lives. Are these new residents going to impact us? Are we going to have an impact on them and their expectations? Will our colleagues from the Mainers be able to afford a house along our coast?
Maine political experts already describe York County’s narrow strip of land, 12 to 15 miles inland from the salt water, as Massachusetts North.
Tom Murphy is a retired history professor and state representative. He is a resident of Kennebunk Landing and can be reached at [emailÂ protected]