What scares me about real estate in Maine right now | Opinion

Maine’s Real‑Estate Market Eyes a Balanced Outlook, but Rising Operating Costs and Climate‑Driven Insurance Premiums Raise Concerns

Cape Elizabeth, Maine – Real‑estate broker Julia Bassett Schwerin, who has been on the Maine market since 2005, says the state is finally moving out of a seller‑dominated phase that began in 2020. “We’re heading toward a balanced market where supply and demand are in equilibrium,” she told Maine News Now in a recent interview. “The flood of buyers after the pandemic is ebbing, and inventory is picking up again.”

A New Equilibrium on the Horizon

The pandemic‑era boom saw demand surge, home prices jump, and the number of homes for sale shrink. Over the past seven years, property values have roughly doubled, but Schwerin predicts the rally will taper off. “Sellers will start using a chunk of their equity to keep buyers interested, so prices will soften,” she said. “We’re not looking at a crash like 2008; it’s more of a gradual cooling.”

Schwerin notes that the market is now trending toward a “balanced” scenario—neither buyers nor sellers have a clear advantage, which could translate into more stable price growth in the coming months.

The Hidden Costs of Homeownership

While headline price trends get the most attention, Schwerin stresses that the true cost of homeownership may lie in day‑to‑day operating expenses—especially heating and insurance. “These operating costs are a bigger driver of unaffordability than the purchase price,” she said.

Heating Costs on the Rise

Maine has made headway in reducing reliance on oil heating. The state’s share of oil‑burning homes fell from 70 % to 50 % over the last seven years, a change supported by state‑wide initiatives and the 2025 “Reducing Heating Oil Reliance” campaign. However, the current geopolitical climate threatens to reverse some of that progress. With tensions in the Middle East escalating, oil prices are expected to climb about 30 % this winter compared with last year’s rates, according to industry forecasts.

“Homeowners who invest in energy‑efficient buildings—better insulation, tighter seals, and clean‑energy heating systems—will see their utility bills stay flat or even drop, offsetting the small increase in mortgage payments that comes with upgraded energy performance,” Schwerin said. She pointed residents to assistance programs offered by the Public Utilities Commission, the Office of the Public Advocate, and Efficiency Maine for help covering utility costs.

Insurance Premiums and Climate Risk

Maine’s insurance market has also faced challenges in recent years. While premiums were traditionally affordable, a spate of severe storms, rising sea levels, and other climate‑related events have pushed rates higher across the board. Federal and state data indicate that the rate of non‑renewal of home‑insurance policies is climbing both nationally and within Maine. If homeowners cannot shoulder these escalating premiums, they may be forced to seek alternative housing arrangements or forgo single‑family homes altogether.

The Maine Bureau of Insurance has taken a proactive stance by adopting “Fortify,” a program originally developed in the southeastern United States for hurricane and tornado mitigation. The initiative pools insurance funds to provide grants for structural improvements—such as sealing roof decks and securing drip edges—to help buildings resist high winds and water intrusion. Schwerin believes that if insurers see enough data to warrant such a program, it signals that climate risks are real and urgent.

Industry‑Wide Call for Sustainability and Resilience

In the same interview, Schwerin questioned why the real‑estate and construction sectors remain split over issues of sustainability, stricter building codes, and collective resilience measures. “We need to move away from fossil‑fuel combustion in buildings and adopt energy‑efficient practices,” she said. “It’s not just about reducing emissions; it’s about protecting people’s homes from the increasing frequency and intensity of storms and flooding.”

Schwerin highlighted the Portland Old Port as a microcosm of this challenge, noting the “manhole cover on a side street at the Portland Old Port during a sunny day king tide.” She urged professionals across the industry to collaborate on a comprehensive approach that combines clean‑energy transition with structural resilience.

What That Means for Maine Homebuyers

For buyers, the upshot is that the market may not see the dramatic price hikes of the past decade, but the cost of owning a home will include higher heating and insurance bills—especially if climate‑related risks continue to rise. Those looking for long‑term affordability may want to prioritize energy‑efficient homes and consider the potential future cost of climate protection upgrades.

For sellers, the expectation of a softer market means that listing prices might need to be adjusted to stay competitive. And for the industry as a whole, embracing the Fortify program and similar initiatives could become a key selling point for homes built to withstand Maine’s increasingly volatile weather.

As Maine’s real‑estate landscape evolves, the conversation is shifting from merely balancing supply and demand to ensuring that homes are not only affordable to purchase but also sustainable and resilient for the years to come.