Besides Lobster rolls, Portland, Maine, is starting to also become synonymous with luxury homes, at least according to the latest Wall Street Journal/Realtor.com Housing Market Ranking, released Thursday.

The city—the most populous in the Pine Tree State—has topped the luxury cut of the ranking for the third consecutive quarter.

“With markets like Portland that have shown up time and time again, what that really means is the area is continuing to hold the attention of buyers,” said Hannah Jones, senior economic research analyst at Realtor.com.

“It continues to offer great amenities, a good economy and a good housing market,” Jones said. “But all of the other trappings we consider also remain strong.”

The quarterly index analyzes key housing market data, as well as economic vitality and lifestyle metrics, for the largest 60 luxury metropolitan areas in the U.S. to highlight housing markets that offer a high quality of life and are expected to see future home price appreciation. It identifies markets that those considering a high-end home purchase should add to their shortlist—whether the goal is to live in it or rent it out.

The top five cities in the first quarter index were rounded out by Nashville, Tennessee; St. Louis; San Diego; and Atlanta.

For people “looking for a healthy, friendly, safe lifestyle, we just take the cake,” said Portland agent Alexa Oestreicher of Legacy Properties Sotheby’s International Realty.

The city offers everything from varied arts and cultural offerings, top-notch medical facilities and well-regarded educational institutions to a thriving restaurant and beverage scene, tons of natural resources and a friendly community, with just about everything in between.

“There’s more here than you have time in your lifetime to discover,” Oestreicher said. “Everywhere you turn there is something for people. It’s a really fun place to live.”

What’s the Draw

Portland’s median luxury listing price has jumped 22% in the past year, pushing it to $1.7 million during the first quarter of 2024, according to the ranking.

While on a steep upswing, it’s still good value when compared to the housing markets that many incoming Portland residents are leaving behind.

New Hampshire and Massachusetts are the biggest sources of migration into Portland, according to Gregg Caporossi, an agent with Portland’s Town & Wharf Real Estate.

But luxury buyers are coming from further afield, too, hailing from places like California and Florida. Regardless of where they’re departing, though, Portland’s “prices have been relatively affordable compared to where these people are coming from,” he said.

These incoming residents are often seeking a higher quality of life, according to Caporossi.

Many buyers “made their money in Boston, New York, California, and have made a conscious decision that they’re going to look for a home that affords them more of a work-life balance,” he explained.

Most of the people who are buying from out of state have a connection to Maine. Whether they vacationed in the state as kids, went to camp there or attended college, “a lot of them have strong ties because they have good experiences,” Caporossi said.

And “they’re dragging people with them,” he added. In some cases its “friends looking for the same work-life balance. But they’re also bringing their family with them, lots of grandparents especially, to be close to their kids and grandkids.”

Of course this kind of migration would likely be impossible if not for the pandemic-prompted ability to work remotely, something that’s easy to do from Portland.

“When I talk to [clients], they are traveling at least a couple of times a month, sometimes as much as twice a week,” Oestreicher said. “If you work two days in the office and have one night away from your kids, it’s a lot cheaper than trying to live in Boston or New York.”

“When you have trains and planes and automobiles, it’s easy,” she added.

Climate

This is the first iteration of the quarterly ranking that has taken climate data into consideration.

“We changed the methodology some, we introduced the climate risk data, and that is one of the aspects where [the top luxury markets] really outperform,” Jones said. “These are areas where, in general, they see relatively low climate risk, where buyers can feel a little more confident the area or the property isn’t likely to see the five climate risks.”

Those major risks are extreme heat, wind, air quality, floods and wildfires.

“We’re really lucky,” Oestreicher said. “we have clean water, clean air, clean living,” and they’re factors that are increasingly important to people,

However, “we have impact,” Oestreicher said. “Casco Bay is one of the fastest-warming bodies of water, we are definitely monitoring it. We had storms in February with flooding that we have not had in 100 years.”

The impact on the coast has been felt, “with erosion in some areas that have not had it before. But it’s not as extreme as in Nantucket or Block Island. We have an impact but also the ability to make changes and protect it,” she said.

Market

Portland’s market is strong, “just not growing at the pace it was,” Oestreicher explained. “With the interest rates not dropping like expected, we haven’t had the spring growth we expected, I’m seeing a little push back in price.”

Competition meanwhile is “better this year than it has been in three years, and I’m seeing, instead of 15 to 20 offers on a property, I’m seeing three to four. We’re seeing home inspections coming back, they’re in most of our deals again,” she said.

Though certainly not a buyer’s market, “it is less of a sellers market than it was the last three years,” Oestreicher said. “There’s a shift, I think it’s healthy.”

A balanced market is considered to be one with four to six months of inventory.

“We’re hovering at less than two months,” Caporossi said.

“Buyer activity has definitely declined significantly in recent months, and that’s as much about the lack of inventory as high interest rates. There’s nothing for them to buy,” he said. “And I’ve got a lot of sellers that are just sitting on the sidelines. The whole system is just sort of in lockdown mode.”

Looking ahead, “I’m bullish on where home prices are going to go,” said Caporossi. “The biggest drivers of [prices] in Maine are we just don’t have large subdivisions, we aren’t building enough to meet demand, and I don’t think that’s going to change in the short term.”

Mansion Global is owned by Dow Jones. Both Dow Jones and Realtor.com are owned by News Corp. The Wall Street Journal is also owned by Dow Jones.

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