Just a few years ago, when a multifamily home in Portland hit the market, real estate agents could hardly keep up with the demand. Dozens of showings in a matter of days, sometimes tens of offers, almost all well over the asking price.

But last year, the same kind of two- or three-unit building drew only a trickle of visitors, maybe one or two offers. For the first time in years, agents were seeing listings expire.

“It seemed like we could hardly get anyone to come look at anything,” said Brit Vitalius, principal and designated broker at Portland’s Vitalius Real Estate Group.

The number of unsold two- to four-unit buildings in Portland grew 91% last year, compared with 2023, according to the Vitalius group’s 2025 market report. The listings expired, were withdrawn or were canceled.

Multiunits in Portland had long been “the gold standard” for both investors and young people looking to break into real estate. What changed?

Industry experts say Portland’s market is finally saturated. The combination of high prices (the median two-unit sold for $729,000 last year), rent control and competition from newer apartment buildings with swanky amenities has stripped away some of the allure for live-in landlords and investors alike.

With prices in surrounding cities like Saco and Biddeford also climbing, many of these would-be buyers instead set their sights on lower-priced areas like Lewiston and Auburn.

“It’s turning my world on its head,” said Vitalius, who specializes in multiunit sales. “It’s harder to sell in Portland now than it is in non-Portland cities.”

DOING THE MATH

Tom Landry, owner of Benchmark Real Estate in Portland, has also noticed the slowdown.

A lot of prospective buyers look at buildings like The Casco and The Armature featuring amenities like rooftop pools and pet spas, and they hear announcements of more units coming to Washington Avenue or Thompson’s Point. Owners of the city’s traditional three-deckers are suddenly competing against luxuries they can’t match. They start to worry, Landry said.

“(Portland’s) population is growing, but it’s just barely growing,” he said.

The city’s rent control ordinance could also have a dampening effect.

City voters approved the ordinance in November 2020, and it went into effect Jan. 1, 2021. It ties housing costs to inflation in the region by capping annual rent increases at 70% of the consumer price index for that year — for 2025 the maximum increase is 2.5%.

“As the market is mellowing out, people are doing the math,” Vitalius said.

The added inventory, coupled with rent control, has helped to slow the rapid rent increases, and buyers can’t charge enough to recoup their investment.

“(So) they look to other areas,” Landry said.

‘IT’S STILL NOT AFFORDABLE’

The draw of an owner-occupied building was once that a first-time homebuyer could buy an old two- or three-unit, move into one and fix up the others, ultimately increasing the value, and therefore the rent, to help pay down the mortgage.

But with the average multiunit in Portland creeping up on $1 million, the initial purchase — let alone the money for renovations — feels out of reach.

“Even if two people are really kind of killing it,” Landry said, “it’s still not affordable.”

But in Lewiston and Auburn, where the average two-unit sold for $335,000 last year, it feels more achievable.

Landry purchased a two-unit home in Auburn in 2023 for $180,000. He put in a little work, made a few updates and sold it in January for just under $600,000.

That property would have been listed for $1.3 million to $1.5 million in Portland, he said.

The price growth for multiunit sales in Portland appears to be slowing. According to data from Vitalius, the median sale price for multiunit buildings increased just 2% between 2023 and 2024, to a median of $822,500.

Between 2019 and 2024, the median sale price increased 61%.

In Lewiston-Auburn, however, the median increased 13% between 2023 and 2024 to $386,000. That’s a 156% increase from 2019.

PRICES UNAPPEALING TO INVESTORS

There have always been investors who decide to forgo Portland in favor of Lewiston, Vitalius said, but there used to be trade-offs. The properties were in worse condition, the tenants were harder to work with.

But as Portland has gotten more expensive, the gap in desirability between the two cities has narrowed.

While Lewiston-Auburn’s growth has outpaced Portland’s, multiunit sales are still, on average, slowing there, too. Sales activity in both metro areas was still below pre-pandemic norms.

The number of unsold listings in the Twin Cities increased from 29 to 42, or 71%, between 2023 and 2024.

Vitalius blamed prices for the declines in both Portland and Lewiston-Auburn, but for different reasons. In Portland, he said, prices are simply too high. The median sale price for a three-unit last year was $800,000. It cost $1 million for a four-unit.

In Lewiston, he mused, sellers could have been “reaching” for that higher price point, listing something to see if it could sell for more and then when it didn’t, deciding to hold onto it. The median price for a three-unit last year was $400,000, and $465,000 for a four-unit.

David Foster, an associate broker with the Fontaine Family real estate group, said the area is particularly good for owner-occupied buyers but, like in Portland, the rising prices are starting to turn off investors.

For some investors and their spreadsheets, the cost of buying the building and rehabbing the units compared with the rent they can feasibly get in the area is getting harder to justify.

In Lewiston, the fair-market rent for a two-bedroom apartment is $1,268, according to the Department of Housing and Urban Development. In 2019, it was $915 — just a 38% increase, compared with the 156% increase in home prices.

“It’s not finding a house that catches your heart and you’ll do anything to be there,” he said. “Investors look at numbers and ‘does this make sense or not?’”

Increasingly, the answer is no.

‘A GOOD PLACE TO LIVE’

But for first-time homebuyers looking for an owner-occupied situation, the Twin Cities are an attractive option.

There are federal and state loan programs and grants that can help with the down payment and closing costs, and the generally lower price point makes it more affordable, according to Tony Poulin, a broker with Meservier and Associates in Auburn.

If a person is willing to commute the 45 or so minutes to Portland, it’s a smart investment, he said.

Poulin said that reasonably priced buildings are still selling quickly but that he doesn’t expect to see as much drastic price appreciation this year.

Amato Polselli, an associate broker with Benchmark who grew up in the Lewiston area, said there’s a lot to love about the area.

It’s affordable and has easy access to the highway, he said. Like Portland, the buildings are older, “so they have a charm factor,” but they generally have more outdoor space.

The area has great restaurants and breweries, as well as a burgeoning arts and culture scene, Foster added.

“It’s definitely a good place to live.”

Copy the Story Link