Homebuyers in Maine’s largest city pay a lot more for less space

The Portland metro area has seen the fifth-largest jump in per-square-foot home prices in the nation since 2019, according to USA Today .

In 2019, homes in Maine’s largest city cost $220 per square foot. Today, that is up 77 percent to $391 per square foot, according to USA Today.

That sharp increase has locked many Mainers, especially first-time homebuyers, out of the local market. The median sale price of a Portland home was $579,000 last month, according to Maine listings service data . A family would need to make more than $161,000 a year to afford that, according to Zillow . In August 2019, the median sale price was $315,500.

“Home prices have gone up in the Portland area as they have through the state, what I attribute that to is always supply and demand, and right now demand is greater than the supply,” Mark Fortier, designated broker of Portland-based Town & Shore Real Estate, said.

While prices increased, homes around the city actually shrunk by nearly 4 percent since 2019. That means that new homebuyers are getting slightly less bang for a lot more buck. Fortier attributes some of the short supply driving prices up to homeowners holding onto the places they bought when interest rates were lower. The rising cost of new construction is also a factor.

Anecdotally, some Portland-based realtors say the market is cooling slightly for the first time in years due to COVID-era demand for housing finally waning.

On the supply side, Maine is leading New England in permitting new housing, despite a 2023 landmark report that found we need to build up to 84,000 homes by 2030 to meet current demand and remedy historic underproduction. The state nearly quadrupled its construction of new affordable housing last year.

Those gains, for the most part, aren’t yet being felt in Portland. Last month, Redfin showed a median listing home price there of $572 per square foot, showing how durable the appeal of living in Maine’s largest city is. Or how pent-up the demand for homes in that area is.

“[Portland] homes that are competitive, priced in the right range and are in good condition always sell, even in a bad market,” Fortier said.

Correction: An earlier version of this report misstated the timeframe over which Portland home sizes shrunk 4 percent.