The median price of homes in Maine has increased more than five percent compared to this same time last year, reaching $395,000 in October 2024.

Despite rising prices, the number of homes sold in the state has also increased to 1,481, a 3.21 percent jump over October of 2023.

According to Paul McKee, President of the Maine Association of Realtors, “regional variations” can be seen across the state, as some markets are seeing homes receive multiple offers, while others show for-sale inventory trending upward and stabilizing prices.

“Maine needs additional housing supply,” McKee said. “As markets gradually move toward a better balance with increasing supply, aspiring buyers have more choice and a better negotiating position for affordability.”

In New England, sale volume has remained unchanged in comparison to last October, but the median sale price has skyrocketed 7.6 percent to $462,900.

Nationwide, sales rose by 4.1 percent and median sale prices increased 4.1 percent to $412,000.

Based on county-level data, York county saw the greatest increase in the number of homes sold since 2023, rising 15.58 percent to 727. This was followed by Kennebec and Hancock counties at 8.84 percent and 8.45 percent respectively.

Sagadahoc County saw the most dramatic price increase, rising 17.38 percent since last year. Prices in Somerset County increased by 16.67 percent and Lincoln County by 15.56 percent.

Piscataquis and Knox counties were the only to see home prices drop in comparison to 2023, decreasing 3.93 percent to $220,000 and 8.81 percent to $440,000 respectively.

Counties with the lowest price increases were Washington at 2.4 percent and Androscoggin at 3.13 percent.

Mirroring previous months, Cumberland and York counties had the greatest number of homes sold, as well as the highest median sale prices.

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The rising cost of homes in Maine has caused many homeowners to face substantially larger property tax bills as a result of revaluations being conducted throughout the state.

Under Maine’s constitution and state law, real estate must be assessed “according to [its] just value,” which according to case law, is equivalent to its market value, or the price for which one could reasonably expect it to be sold.

A law approved by the Legislature in 1975 directed municipalities to have a minimum assessment ratio of 70 percent, meaning that the tax assessed value of a given property is not supposed to be less than 70 percent of its market value.

Generally speaking, municipalities undertake revaluations when they fall below this 70 percent threshold, whether that be due to the passage of time or a significant shift in the housing market.

Tied to this ratio are the value of residents’ property tax exemptions — such as the homestead exemption. For example, if a municipality’s property assessment is calculated to be at 80 percent of market value, homeowners are only eligible to take 80 percent — or $20,000 — of the state’s $25,000 homestead exemption.

Since 2019, home prices in Maine have nearly doubled, according to data tracked by the St. Louis Federal Reserve. Those new sale prices contribute to the new valuations of houses that aren’t on the market, which means Mainers who have owned their homes for 20 years or more are suddenly on the hook for paying twice the property tax — even if their income has hardly grown.