Economic Impacts from COVID Transplants

Sasha Bogdanovics and Claire Richardson  /   January 27, 2022

As with the year before, the past 12 months were largely characterized by profound change. The pandemic continued to shine a light on how we spend our time, what we spend it on, and, in many cases, where we spend it. For many seeking a better quality of life during the pandemic, Maine was at the top of the list. In the 2020 Atlas Van Lines Migration Patterns Study, the state ranked third in the country with an inbound move rate of 62.4%. Says Ashley Pringle of Maine & Co., a private nonprofit that provides services to businesses looking to relocate to Maine or expand within Maine, “We are tracking a trend of professionals looking to relocate from larger cities to enjoy a quieter and more pristine setting for their current remote jobs. Most of these transplants already have work but are now given the freedom to work from where they choose; and they are choosing the lifestyle and natural beauty that Maine has to offer.”

For close to five years, Maine consistently tracked 75% in-state home buyers (with 25% being out-of-state or international buyers). However, since spring/summer of 2020, Maine has seen a rather dramatic increase to 35% of buyers coming from out of state. A sample of purchasers from July and August of 2021 shows that the majority came from Massachusetts, New Hampshire, and New York, with the notable outliers being Florida, California, and Connecticut.

While Portland and its surrounding cities are the target markets for most of those looking to become Maine residents, the Maine Association of Realtors’ February housing report from 2020 to 2021 shows that York and Cumberland Counties reported two of the lowest increases in units sold but hold the highest average sale price. Demand, meet lack of supply. Sale prices are up, time on the market is down 25%–50%, and buyers are quick to waive inspections.

Some of this can be attributed to the current housing crisis Portland is facing. It is no secret that many Portland developments have slowed down, in part due to the Green New Deal and rent control referendums that have passed over recent years. As John Finegan mentions in his article, total units added to Portland’s multifamily development pipeline decreased by 81.6% in 2021. This forces developers to look elsewhere, creating a huge opportunity for neighboring towns that may have otherwise been overlooked. In Brice O’Connor’s piece, he discusses this phenomenon taking shape in communities outside of Portland in the form of Rock Row, The Downs, and the revitalization of Biddeford. Throughout the state, raw land sales increased by 47% from 2019 to 2020. Land purchases in Cumberland County alone increased by 33% from 2019 to 2020 and by 92% from 2019 to 2021.

Witnessing this growth and expansion is exciting. Despite the perceived effects of the housing shortage, many Maine business sectors are also experiencing labor shortages. To that end, organizations are offering incentives for students to stay in Maine, and major institutions are investing millions of dollars to enhance Maine campuses and promote local initiatives. Ashley Pringle believes that a majority of people who have decided to move to Maine and work remotely intend to call our state home for the long-term. This bodes well for attracting and retaining young working professionals.

According to Katie Shorey of Live & Work in Maine, a nonprofit that supports employment in the state, online engagement doubled between the start of 2020 and the start of 2021. Katie says, “Getting new talent and boomerangs to Maine is really important. We need more people to enter the workforce than what we are currently producing. When people come back, they bring good skills.”

According to our research, many incoming residents are working in banking, insurance, science, and tech-related jobs throughout the state, many of whom are doing so remotely. While headquarters are often located elsewhere, this is not necessarily a bad thing. The remote worker has spending power. They are enjoying the restaurants, spending money in shops, renting a desk in coworking spaces, renovating their homes, and paying taxes. Further, while businesses prefer to remain nameless, we have seen several examples of a principal moving to Maine to take advantage of the remote lifestyle and subsequently moving into a brick-and-mortar office with more employees following in their path. With the rise of sophisticated professionals in Maine, we expect to see teams building locally and spurring demand for more collaborative office space.

* Maine Real Estate Information System, Inc. (d/b/a Maine Listings).  Note: Maine Listings, a subsidiary of the Maine Association of REALTORS, is a statewide Multiple Listing Service with over 6,200 licensees inputting active and sold property listing data. Statistics reflect properties reported as sold in the system within the time periods indicated.

Sasha Bogdanovics

 

Sasha Bogdanovics, Associate


Claire Richardson

 

Claire Richardson, Associate