When COVID-19 struck earlier this year, experts issued dire warnings regarding the pandemic’s likely impact on real estate buyers and sellers. But what has been our actual national experience - and our experience here in central Maine? Let’s take a couple of minutes to look at the U.S. and Maine-specific stats, and see what they tell us…
The Perfect Time to Sell
For both Maine and the U.S. writ large, the economic “hit” caused by COVID-19 has helped fuel a much-stronger-than-expected seller’s market, with homes sales up fully 24.8 percent in the past year, according to The National Association of Realtors. Due to a national inventory of “For Sale” homes that has dropped 27.4 percent in one year, the national median listing price for a home in June was $342,000, up 5.1 percent in one year.
Here in Maine, the news for sellers has been equally outstanding. With the Law of Supply & Demand running on all cylinders, Maine Listings recently reported: “Prices continued to rise, with a median sales price increase of 3.43 percent to $237,900.” Chiming in on this, News Center Maine just reported “Maine Real Estate Remains Hot Despite COVID-19.”
As Maine continues to “reopen,” the available inventory of houses will increase - perhaps quite quickly. This will be positive for Maine’s economy, but will very likely mean home prices will begin to level off. That’s why summer 2020 is such a perfect time to sell your house in central Maine.
All-Time Low Interest Rates = Smart Time to Buy
Since inventory is down so sharply across the U.S. and here in Maine, home buyers are seeing fewer opportunities and experiencing increased competition for available homes. But there’s an incredible silver lining to this: The recession has caused mortgage interest rates to plummet to all-time record lows. By the end of June, the fixed rate for the popular 30-year mortgage was down to a national average of just 3.13 percent, according to data released by Freddie Mac. Meanwhile, here in Maine, some Realtors are reporting being able to put buyers into homes for as little as 2.875 percent on a 30-year mortgage. The national average for the 15-year fixed rate has been at or under 2.8 percent for the past several weeks, with the rate in Maine last week an average of 2.78 percent.
The meaning of this for Maine home buyers is crystal clear: Despite the increased competition you’ll face, jumping into the home-buying race now - as opposed to waiting - could be a fantastic financial move. While the pandemic and recession are terrible and seem endless, they will not last forever. And once they are past, interest rates will surely rise. So why not buy a home and lock in an incredibly low, money-saving mortgage rate NOW?
If you would like to learn more about buying or selling a home in central Maine, we invite you to contact us today.