Home sales in Maine fell sharply again last month while prices continued to rise, but the increase was smaller than in recent months and experts say the market may be cooling off, mirroring the national trend.

The statewide median sales price for homes sold last month was $330,000, according to data released Thursday by the Maine Association of Realtors. That price represents just a 3.1% bump over the figure for September 2021 and a fall from the double-digit price spikes in previous months.

Last month’s results also show a decrease from the August median price of $340,000, according to the association. The median is the price at which half of the homes sold for more money and half sold for less.

“Demand for single-family homes in Maine remains strong. Inventory levels had been increasing for around six months, but September sales slowed that momentum,” said Madeleine Hill, a broker with Roxanne York Real Estate in Harpswell and the association president.

A total of 1,890 homes in Maine changed hands during September, a slight increase from August’s 1,850 but an 8.5% decrease from September 2021.

While mortgage rates remain high, Hill said the “silver lining” to the volatility of the financial markets may help stabilize home sale prices. She believes that’s already happening.

“After 25 consecutive months of double-digit pricing increases, both August and September 2022 came in with single-digit price appreciation,” she said. “Overall, Realtors across Maine are feeling a leveling in the marketplace.”

Michael Hitz, a broker with Maine Home Connection in Portland, said that for the first time in over two years, buyers have had a fighting chance.

During the pandemic, many clients would be doing all the right things – they had stable jobs, they had good credit, they had savings. But they simply weren’t able to break into the market.

“People would reach out, and I would say this is really not the (right) time,” Hitz said. “If they didn’t have to move, I said, ‘Please just hold on’ and wait until things level out.”

Now, as prices are showing signs of stabilizing, he’s busy helping the clients who have been patient.

“It’s been really delightful,” he said, to see buyers be able to put in a sensible offer, do their due diligence and have the home inspected and in some cases negotiate.

“It’s not the wild west of who has the biggest wallet,” he said.

On the flip side, Hitz said he also has had to remind sellers that they need to be more moderate, more realistic with how they list their homes.

“When they do put something on the market, it’s not going to be filled with drama,” he said. “People aren’t offering their firstborn or offering their family.”

Hitz said he’s seeing more price reductions, mostly on homes that were originally priced too high. Houses that are priced sensibly will sell, he said. It might take a little longer than a few months ago, but homes will still sell fairly quickly.

However, without a huge flood of inventory, Hitz said people waiting for prices to crash will likely continue to wait.

INTEREST RATES KEEP CLIMBING

The average rate included in buyer contracts for a 30-year, conventional fixed-rate mortgage was 6.11% in August, up from 5.22% in August, according to the National Association of Realtors.

Mortgage rates, already the highest they’ve been since 2008, have continued to climb.

As of Thursday, the average 30-year fixed-rate mortgage sat just below 7%, according to mortgage buyer Freddie Mac. The average commitment rate across all of 2021 was 2.96%.

Lawrence Yun, chief economist for the National Association of Realtors, said rising inflation is hampering the housing market, particularly in expensive regions like the Northeast.

However, the lack of inventory is offsetting what might otherwise create larger declines.

“Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory,” Yun added. “The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today.”

Tom Landry, owner of Benchmark Real Estate in Portland, said that September’s numbers are more of a reflection of some of the first interest rate hikes this summer. The closing figures reflected last month went under contract some time ago, he said.

“When we saw those changes in June, people just froze,” he said. Deals fell apart. Buyers were a little more cautious and had a little more power.

But now, Landry said he’s seeing the numbers motivate people. If they don’t buy now, how high will the interest rates be in a few months?

On the other hand, the high-interest rates are discouraging some sellers from moving and putting their homes on the market. Landry said he’s seen the number of listings decrease every month.

In Portland, the number of listings for all residential properties declined 62% from September 2021 to September 2022. There was a 33% decrease in single-family listings, according to data compiled by Benchmark. Landry said potential sellers dragging their feet may want to list quickly.

“There’s very little supply and there’s stable demand for now,” he said. “If you’re remotely thinking of selling in the next decade, you should do it right now. The fear of interest rates going higher is only going to motivate people for so long.”

COUNTY, NATIONAL DATA

In Cumberland County, the median sales price was $500,000 for the three-month period ending Sept. 30 – an increase of 11.1% from the same period a year earlier, and the highest median price in the state.

The Maine Association of Realtors also looks at three-month data for county-by-county comparisons to get a larger sample size of sale transactions. Washington County saw the largest price increase.

From July 2021 to September 2021, Washington County homes sold for an average of $160,000. In the same three-month period this year, they sold for an average of $220,000, a 37.5% increase.

Sales declined most sharply in Knox County, which experienced a 30% drop from 232 homes to 161.

Sagadahoc and Somerset counties were the only two that saw an increase in sales during the three-month period, with 1.5% and 2.4% increases, respectively. Sagadahoc County also had the state’s most modest price increase – just a 1.4% jump.

Nationally, sales fell nearly 24% last month from September 2021, and prices rose 8.4% to a median of $384,800, according to the National Association of Realtors. While still an increase from a year ago, September marks the third month in a row that the median sales price has declined since peaking at $413,800 in June.

Regionally, sales fell 18.7% percent last month from the year before while the median price in the Northeast rose by 8.3% percent to $418,500.