Portland realtors share unfiltered thoughts on the city’s housing market.
It all started with baby boomers. For decades, people had been moving out of cities and into the suburbs. Adulthood meant a house with a two-car garage, two kids, a lawn to mow, and a pile of leaves to rake. But around the year 2000, something began to change. “People who had spent the last 20 years mulching and commuting got sick of it,” says Tom Landry of Benchmark Real Estate. “Now, many people feel like they’re done with that. They want to get back to different things. They, like everyone else right now, want a good lifestyle.”
“They want to travel, and to be able to explore on foot,” adds Sandra Wendland of Legacy Properties Sotheby’s International Realty (SIR). “They want to go to the mountains for the weekend or take a quick trip to the beach and not be tied to maintaining a property.” They don’t want to spend the rest of their lives taking care of a big house in the suburbs. They want to live in Portland, where the restaurants are excellent, the artists are active, and the great outdoors is just a hop, skip, or paddle away.
By this point, you’ve read the articles; you’ve heard the news. Portland is a city on the rise, and as more people move into the city from the suburbs, and from neighboring states, we’re seeing housing prices rise, too. “Every buyer wants to buy here, and every seller wants to buy here, too,” says David Marsden of Marsden Real Estate / Bean Group. “Inventory is low, which is keeping prices strong. With very few exceptions, it’s a sellers’ market for sure.”
Although the late 90s and early 2000s saw an influx of people moving into the glorious old mansions of the West End, the housing market has cooled slightly in that area. This happened for two reasons, according to Marsden. Not only is the East End “really hot” but many people just “don’t want big huge houses right now,” he says. “There are still buyers who love that architecture—those are emotional purchases for people who appreciate historic homes and have the means and want to become stewards—but that’s not where most people are looking.”
Instead, buyers are seeking luxury condos, particularly those with amenities like valet parking, in neighborhoods on the peninsula. “I think that’s one of the next big trends in luxury,” says Sue Lessard of Town and Shore Associates. “What we’re struggling to find right now are condos with outdoor spaces and decks.” Buyers who have been out-priced from cities like New York, San Francisco, and Boston are moving to Portland for the affordability and the outdoorsy lifestyle. While they don’t want houses with big yards, they do want their own slice of greenery. “Living spaces are getting smaller,” Marsden says. Some developers are responding by building condominiums and apartment buildings with shared outdoor decks.
“While condominium sales have increased about 54 percent since 2013, residential sales have only gone up by 25 percent in that same time,” adds Wendland. “That’s a clear indicator of a trend.”
One of the reasons that Portland is so hot right now has to do with its small-town feel. Take an area like Washington Avenue in the East End. “You’ve got the Island Creek oyster bar, Drifter’s Wife, and Maine Craft Distilling right there,” says Landry. “You can see that it’s not Anywhere, America. It isn’t formulaic. There aren’t chain restaurants—there are small entrepreneurs doing what they do best, and it makes Portland a place to be.” This drives tourism to the state, and with more vacationers choosing Portland as their next urban destination, homeowners have realized that they can make extra income renting their unwanted apartments or housing units through short-term rental platforms.
“Airbnb is one of the reasons our inventory is so slim right now,” says Wendland. “What does that do to the market?” Lessard asks, and answers: “It’s driving prices up.” Marsden adds that many landlords who would typically have sold their multi-family units are choosing instead to hold onto them and to capitalize on the market. “They’ve been able to increase rents and add an Airbnb unit within the building to further increase cash flow,” he says.
While the rising cost of housing has been fueled by a wave of baby boomers, Landry notes that there’s an “echo boom” coming soon. “The millennials are the echo, and they’re fueling the rebirth and resurgence of our little city,” he says. As telecommuting becomes more prevalent, more young people are moving into cities like Portland, where they can enjoy the lifestyle they want while holding down jobs based in New York or even Japan. (Plus, it’s an easy 90-minute flight to New York, so plenty of buyers are keeping their old jobs and commuting south for important meetings. “They can be in conference rooms all day and still be home for dinner in Portland!” Marsden says.)
But millennials have slightly different buying patterns than their older counterparts. According to Wendland, thirty-somethings are buying in Oakdale, Back Bay, Rosemont, and Deering Center. They’re purchasing both condos and houses, and they aren’t afraid to get their hands dirty. “Often, I find that they’re interested in quality and character,” says Lessard. “It used to surprise me to see millennials coming in and looking at older houses, but that’s what they want.”
“Due to HGTV, they all want to renovate and they know how,” adds Wendland. “Plus, they’re in a financially healthier position than the buyers we were seeing five years ago.” And where millennials go, their friends often follow. “I’m finding that a lot of millennials are bringing their friends with them when they move, particularly those who can work remotely,” says Lessard. “I’m working on a property right off Brighton, and since the buyers’ friends just bought a house around the corner, the location is even more attractive to them.”
Marsden says he’s noticed a shift in the past few years. “It used to be that one partner would find a job in Maine, and so they would move to Portland, but now they’re coming and bringing their jobs with them,” he says.
While housing prices have been rising steadily for the past five years, it’s not unreasonable to ask, like Marsden does, “Where’s the end of the run?” It’s something he has thought about a lot, and while Lessard, Wendland, and Landry believe Portland’s rise is sustainable for the foreseeable future, Marsden notes that “something has to give eventually.” “I don’t think it will happen in the next 18 months,” he says. “I believe that when the market does shift, there will be a more moderate downturn here than in other parts of the country.”
Landry advises buyers to “be cautiously optimistic and don’t believe too much hype.” He suggests watching whether larger employers—such as WEX and Tilson—continue to establish headquarters in Portland. “If this happens the outlook for sustainable growth and steady increases in property values are assured,” he says. “If not, there could easily be a phase of over-development and dropping values or prices.”
However, even self-described “cautious Yankee” Marsden says that there are some factors that will keep Portland’s market from going bust too quickly. “I’ve loved watching this city grow up, and I think the opportunities do build on one another,” he says. Just the other day, he says, he walked to Thompson’s Point from his home in Deering Center to go ice skating. It was a full-moon night when he walked home, and it gave him a moment to reflect. “I’ve seen that defunct factory sit there for years, and now we’re ice skating there. They’ve got Cellardoor Winery, and Bissell Brothers brewery, and great concerts,” he says. “These experiences—that will sustain us through any blip in the market.”