BAR HARBOR — It’s a seller’s market for property on Mount Desert Island and in the Ellsworth area, local real estate agents say. The problem is there aren’t a whole lot of properties to sell.
“Aggressive buyers have snapped up inventory the past few years,” noted Peter Collier, a licensed associate broker with the Lynam Real Estate Agency in Bar Harbor. “So, after the unprecedented volume of transactions, the overall supply is low.”
And how low exactly is the supply of homes in the area? Torrey McDonald, a broker at the Realty of Maine office in Ellsworth, says that both Ellsworth and Bar Harbor are down over 40 percent of total properties for sale over the last three years.
McDonald says there is not one single factor to blame for the shortage, but many different contributors.
“Most notably would be a general shortage in housing due to high cost of new construction, the Airbnb craze turning homes into rentals and a higher buyer demand due to the pandemic pushing city folks to rural locations,” McDonald said. “This was also aided by many employers allowing more work-from-home employees, which continued even as the pandemic eased.”
While this lack of inventory has caused a dip in overall sales, it has continued to drive home values up. Statewide, according to Maine Listings, February 2022 sales declined 17 percent compared to February 2021, while the median sales price increased 21 percent to $297,500. The current median sales price for homes in Hancock County sits a little higher than that at $315,000.
Despite the increase in home value, some residents are still unwilling to sell, which has added to the shortage.
“I generally always see a trend that when gas prices and inflation are up, Mainers tend to hold off on making big decisions like selling their home,” McDonald explained, while also noting that there is additional hesitation due to the current conditions.
“Many potential sellers have said to me, ‘If I sell, where would I go? I can’t afford to buy anything right now.’”
One option that people have turned to is buying undeveloped land.
“Many lots have sold due to the lack of existing homes on the market; many people have opted to buy land and build instead,” said Erica Brooks, a Realtor with The Swan Agency in Bar Harbor. “Currently, there are only 10 residential homes for sale in the municipality of Bar Harbor, from $249,000 to $8,900,000. There are 13 land parcels for sale ranging from $90,000 to $425,000.”
McDonald says there is almost an opposite phenomenon taking place when it comes to land sales, with sellers willing to capitalize on a rise in the value of their plots. “Sellers are seeing an opportunity to offload lots they’ve been holding onto for years that they inherited or saved for the kids that never moved back home.”
Collier understands the frustration that is motivating buyers to scoop up land instead of waiting for the housing supply to increase, but he urges those who wish to pursue that path to take caution.
“Unfortunately, building costs have risen as well and quality contractors are in red hot demand,” he said. “Developing land is complex and so buyers just need to make sure they are in touch with local officials in the town where they plan to build and working with reputable contractors to help keep them on track.”
Collier also believes that patient buyers will soon be rewarded as the housing supply increases heading into summer.
“I know several sellers planning to list as summer draws nearer, and I suspect pressures may ease somewhat as more listings come online.”
Brooks is confident in the continued health of the market.
“Overall, Bar Harbor and Mount Desert Island are desirable places to live and, in the big picture, are still considered affordable to many people.”