Condo Media - April 2017 - 49

Many factors are creating this condo
market environment. With the economy improving, the inventory of apartments in the cities is shrinking. Multifamily buildings spend less than 21 days
in the real estate market in Portland
due to a favorable cap rate of 8 percent
for quality properties. Even historically
left-behind multi-family markets such
as Lewiston and Biddeford are seeing
their multi-family inventory shrinking
and cap rates of 10 percent.
Meanwhile, apartment rents are
steadily rising to reflect the demand,
making condo ownership a reasonable alternative. This has resulted in
Munjoy Hill and Bayside neighborhoods seeing luxury condo buildings
springing up everywhere. Old mill
building complexes in both Biddeford
and Lewiston are being converted into
condominiums.
The problem with the market is the
age group needing new housing. Making
up 36 percent of the buyers are the millennials/Gen Ys (median age 30), and
they are strapped with college debt and
have the least ability to raise the down
payment funds. The next largest buyers
group (26 percent) are the GenXers
(median age 42), who are planning to
upgrade to a larger home as they are in
their peak earning years.
Boomers have become empty nesters who do not want to deal with the
four-bedroom suburban house. They
are migrating to the new high-end
condominiums in the urban areas such
as Portland to enjoy the fine restaurants
and cultural attractions the city has to
offer. Changing demographics in the
urban areas see condos being purchased
for vacation homes, investments, and a
search for a new living style.
The boomer market falls in two categories. The younger boomers (median
age 56), making up 16 percent of the
market, are seeking homes to house
multi-generations while the older
boomers (median age 65), making up 15
percent of the market, are downsizing
and planning for longer distant moves
for their retirement plans.

Perhaps the Silent Generation (median
age 74), making up 9 percent of the market, is selecting interesting choices. While
30 percent are pursuing senior-related
housing, the vast majority are buying new,
smaller homes with many amenities such
as air conditioning and high-end finishes.
This generation is less likely to compromise on their needs.
As with any market, the current
condo market in Maine has its pluses
and minuses. While the prices for new
condos are increasing, the amenities
and quality of the new condo developments are improving, proving the old
adage, you get what you pay for.

n JACK CARR, P.E., RS, LEED-AP,
IS SENIOR VICE PRESIDENT WITH
CRITERIUM-ENGINEERS IN

CONDO SALES ARE
BECOMING MORE THAN 35
PERCENT OF THE MARKET
WITH SALES OF 345 UNITS
IN PORTLAND ALONE, WITH
PRICING AS FOLLOWS:

27% < $200,000
30% < $300,000
20% < $400,000
10% < $500,000
13% > $500,000

PORTLAND, MAINE.

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URDYHOME
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ANDMAHI
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April 2017

http://www.STURDYHOME.COM http://www.STURDYHOME.COM

Condo Media - April 2017

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