MAINE - Bangor, Maine, real estate is expected to be competitive in the coming years. Home prices are rising, but not by as much as some predicted. Last month, the median sale price of a home in Bangor, ME, was $239K, up 13.9% from last year. During that time, it took an average of 47 days for homes to sell, compared with 43 days last year. While prices are increasing, the number of homes on the market is decreasing.
The rising cost of living puts pressure on the housing market as more buyers struggle to make ends meet. Rising inflation will cause a drop in consumer spending and raise the risk of a recession in 2023. As a result, the potential pool of buyers will become smaller. With each percentage point increase, the demand for homes will decrease. This will put sellers on the sidelines, causing prices to fall.
The housing market is not sustainable in the long run. It is overvalued and stretched, which makes it susceptible to higher mortgage rates and affordability crushing. In 2023, home prices will likely level off but not drop significantly, as they did in 2022. Some experts predict that home prices will rise slightly, but not nearly as dramatically as in 2008. If all goes according to plan, the housing market will be a healthy place to buy a home.
Fannie Mae expects that home price appreciation in 2023 will slow to 5%. This is a welcome change after the overheated market of 2021. If the market is slower, it will help prevent a real estate crash in 2023. It's not too late to invest in Bangor real estate.
The housing market is closely related to the economy's health, and a new president may mean a dramatic change in politics. Also, inflation could mean that home prices will rise more slowly, causing some uncertainty among potential homebuyers. Meanwhile, the labor market could return to normal, and new builds could flood the market.