Maine – Could Its Housing Be the "Little Engine That Could"?
Maine faces unique challenges in its bid to recover from the Great Recession. Because of its size alone, the Pine Tree State has fewer resources than its larger counterparts. But now is not the time to give up on Maine! To the contrary, if the housing market is any indicator of better economic times ahead, Maine is clearly on the right track.
According to realtors in Maine, sales of single-family homes increased 17% in 2012. In December 2012 alone, sales jumped 12%. And in that same period, sale prices also rose 6%. That good news spreads across the state. Piscataquis County led the pack with an 8% increase in sales. In fact, only three counties experienced falling home sales.
Realtors around Maine report that many buyers moved up to larger homes. And, there was a steady stream of first-time home buyers. Experts agree that a combination of historically-low interest rates and declining inventories made home buying in 2012 very attractive.
Other indicators suggest continued progress in Maine's economy, and hence, a continued strengthening of the housing market. For example, while Maine's manufacturing industry suffered significant losses in 2012 (like the Hostess Brands plant that closed in Biddeford), there are some indicators that other industries are actually improving slightly. One notable example would be the Portland Fish Exchange. While the numbers have not reached the volumes seen in 2007, the total amount of fish sold in 2012 increased by a half million pounds – from 4.8 million in 2011, to 5.3 million in 2012.
In fact, Portland's housing market itself experienced a remarkable renewal in 2012, with homes sales up 14% over 2011. In December alone, Portland's home sales increased by a record 34%. Mirroring the health of it largest industry, this represents the largest gain since 2007.And while home prices only improved slightly in 2012, experts predict that 2013 will produce further gains.
More good news for Southern Maine in 2012 was the surge of new home construction. In the first nine months of the year, housing starts rose 35% over 2011. While this level falls below pre-recession numbers, it remains in stark contrast to the depressed levels experienced in 2011.
Maine's unemployment rate is also demonstrating signs of improvement. From a high point of 8.4 in February of 2010, the statewide rate has since dropped to 7.2%. Studies suggest that Mainers will regain pre-recession levels by 2015.
Maine has suffered more than its share of economic woes in recent years, and while its recovery depends on the nation's overall economic health, there are indeed positive signs for the nation's 12th smallest state. Seafood production is on the rise, new home starts are up, unemployment is dropping, and home sales are showing real signs of life. The Pine Tree State is on the move – just like "the little engine that could"!