New index predicts 'slow, steady' recovery for Maine real estate
PORTLAND — A new measure of Maine's real estate industry shows the market still has a long way to go before it recovers from the impact of economic recession, but is beginning to make headway.
In a May 22 conference at Holiday Inn by the Bay, the Maine Real Estate & Development Association and the University of Southern Maine introduced the MEREDA Index, a 100-point scale that measures residential and commercial real estate activity.
Activity in the first three months of 2006 was assigned an index of 100; the first quarter of 2013 scored 70.
"The real estate industry is just beginning to show recovery from the depths of the recession, still more on the residential side versus the commercial side, and more for existing properties rather than new construction," said Charlie Colgan, a professor at the Muskie School of Public Service who helped develop the index.
"It may take another year for the commercial market outside of Portland to see the same uptick, but, statewide, the MEREDA Index should continue to trend upward throughout the year."
The index is based on nine quarterly measurements of data, including median home sale prices, per-square-foot commercial lease rates, and the number of workers employed in building construction.
The index fell to an all-time low in 2009, rose to 80 as a result of the federal economic stimulus package and home buyer incentives, and since then has fallen back, but stabilized, according to MEREDA.
"Commercial real estate activity is still moderate in most parts of Maine, but has picked up in the southern portion of the state," MEREDA President Drew Sigfridson said. "But, even in Portland, there is still a surplus inventory of empty office space. We anticipate a slow, but steady uptick.”
MEREDA also announced its 2012 list of the six "most notable" commercial development projects in the state, which embody the association's belief in responsible development, according to a press release. The projects include the Oak Street Lofts, an affordable-housing complex of 37 apartments in Portland, developed by Avesta Housing.
Founded in 1985, MEREDA is a statewide industry organization of more than 260 real estate owners, developers and service providers.