By Will McDermott
What the locals say
Maine has only recently rebounded from the recession.
The Maine economy struggled to recover after the Great Recession. In fact,
the state suffered through three additional recessions in 2010-2011, 2012
and 2015, according to a 2017 report from the Maine Center for Economic
These recessions took a toll on Maine’s gross domestic product (GDP), which
grew by just 0.3 percent from 2010 to 2015, according to a 2017 report by the
Maine Development Foundation (MDF). During this same time period, the
New England economy grew by more than 4 percent, while the U.S. economy expanded by 10 percent.
When looking at just the rural areas of the state, the economic conditions are
worse. Real GDP — adjusted for inflation — for all areas outside the Portland
metro region experienced negative growth from 2007 through 2013, which
the MCEC report describes as “Rural Maine’s 7-Year Depression.”
As a result of rural Maine’s stalled economy, residents have been flocking to
the Greater Portland metropolitan area, which has seen an annual net population increase of 1,000 people per year since 2012. The state’s largest city
now accounts for more than 50 percent of the entire state’s GDP, according
to the MCEC report.
The Maine economy has shown some signs of rebounding in the past three
years, however. The state’s GDP grew by 1.1 percent from 2014 to 2015,
reaching $51.1 billion, according to the MDF report. This growth was still
slow compared to the region and the nation, however. During that same
time, the New England economy grew by 2.4 percent and the U.S. economy
grew by 2.5 percent.
Over the past two years, however, the Maine economy has expanded by nearly
$6 billion (or 11. 5 percent), however, to a gross state product of $57 billion as of
this past November, according to Forbes.com. The business website still ranks
Maine No. 46 on its list of best states for business.
The cost of doing business is improving in the state, albeit slowly, according to
the MDF report. In 2000, Maine had the second-highest cost of doing business
in the nation, with a 115.2 Moody’s Analytics score. (The national average is
100.) As of 2014, Maine was the 10th most expensive state in the U.S., with a
score of 108. 5. Maine is now the second cheapest state for doing business in
New England, however, as the state’s improved score has dropped it below
Connecticut, New Hampshire, Vermont and Massachusetts. n
Home sales and prices
Maine’s housing market has heated up considerably over the past eight
years. In 2011, total single-family home sales in the state stood at less
than 10,000 units, according to the Maine Association of Realtors. In 2017,
that number had increased by almost 80 percent to 17,633 units. Moving
almost in lockstep, Maine’s median residential home price has increased
by more than 20 percent, from $165,000 in 2011 to $200,000 in 2017.
In fact, 2017 set records in the state for both the number of homes sold
and median price, according to the Realtors association. The state’s
median home-sales price increased by 5. 6 percent in 2017 with 14 out
of the state’s 16 counties recording increases in the median sales price.
Nine counties also had an increase in the number of home sales in 2017.
Maine Single-Family Home Sales
Source: Maine Association of Realtors
Closed sales Median sales price
2018 President, Maine Association of Realtors
and owner of McAllister Real Estate
“2017 was our best year since we’ve been keeping track, as far
as statistics go. ... I hope it’s not a re-occurrence of 2005-2007,
but it’s pretty crazy right now. ... We have 4,500 real estate professionals in Maine and they sold 20,658 residential properties
— just shy of $5 billion — last year. And an additional 2,900 in
land sales. [Some] 16,500 of [all home sales] were financed.”