Maine’s Vacation Home Market Is Red Hot
When asked about travel, most picture a vacation home. They imagine white sand beaches, the sounds of crashing waves, and tropical trees being brushed by the sea breeze in Florida or California. While both of these states rank high in terms of the number of vacation homes that they offer, they don’t come close to Maine. The Pine Tree State is ranked first in number of vacation homes, with 12% - 19% of properties in the state being used as vacation properties — which is fantastic for real estate agents looking to cash in on this lucrative niche.
Vacation Home Demographic
There are a number of reasons people consider buying a vacation home. Most often, people love to visit a certain area, they plan on retiring soon, or they’re hoping to generate rental income. Regardless, the most important factor in any vacation home, true to real estate, is its location. Maine’s natural beauty and laid-back attitude made it one of the top travel destinations in 2020, and it typically draws in over 30 million visitors on an annual basis. Vacation rentals are expected to grow up to 57 million renters by 2023.
To no surprise, the Baby Boomer demographic currently dominates the field as renters, buyers, and sellers within vacation properties. With work flexibility becoming a new norm, millennials and younger generations are starting to explore renting and buying more vacation homes while working remotely.
Maine’s Vacation Market
Vacation homes in Maine have always been popular, but the market truly started booming when the “Airbnb” concept of renting out rooms or even an entire home exploded in the lobster capital of the U.S. Over half a million people stayed in an Airbnb or similar room-share properties in Maine in 2019. The process of renting out homes drove the value of properties up even before the pandemic real estate boom kicked in. As Americans fled to safer pastures and coastlines, Maine’s lobsters, lighthouses, and money enticed troves of out-of-state buyers to head north and consider purchasing a vacation home of their own. Maine’s affluence has drawn wealthy families to the state for years, but once the pandemic hit a wave of wealth crashed into the state’s real estate market.
"Properties are getting five, 10, 20, 30 offers," said Rob Edgerley, of Maine Life Real Estate Co. "The changes are pretty high, we haven't seen jumps [in the number of transactions and prices] before."
There are a lot of variables that factor into Maine’s housing market: There are residents who live here year-round, part-time residents who visit throughout the year, seasonal workers that descend on towns like Bar Harbor each summer, and tourists who are in and out all spring and summer. All of these demographics translate into sky-high rent costs and home prices. In fact, Maine’s home values have increased over 22% since 2019.
Vacation Home Facts to Help Agents Break Into This Niche
Selling a second home that may double as an investment requires a different skill set than selling a typical family home - primarily an in-depth knowledge of the tax implications that second homes carry. Additionally, clients looking to purchase a vacation home are more focused on the resale value, rental income, and taxes owed than they are on school zones and luxury kitchens.
If you’re interested in getting into the vacation home market, consider pursuing NAR’s Resort and Second-Home Property Specialist Certification. It’s also important to know which locations are popular for investors right now so you can hone your marketing collateral and strategy appropriately:
34% purchased properties in a suburb or subdivision
33% purchased properties in a beach area
24% purchased properties in a small town
21% purchased properties on a lake
19% purchased properties in an urban area
15% purchased properties in a rural area
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