BRUNSWICK — A little more than two years after going on the market, close to half of the former U.S. Navy housing in the McKeen Street neighborhood has been sold.
As of the end of September, 108 of 232 homes in the McKeen Street Landing development were sold and four more sales were pending, according to David Gleason, the Realtor handling the sales.
Demand has been stronger than expected, leading to a slight increase in prices, according to Gleason.
“There’s no question that it has gotten better every year over the past three years,” he said.
Even though prices have increased, those buying the properties are still largely local, middle-class and first-time home owners, Gleason said – precisely the type of buyers the development is meant to attract. Retirees make up the second largest block of buyers, he said.
“Basically, 75 percent are those who are new to the housing market or on fixed incomes and are looking for an affordable house,” he said.
Despite the brisk pace of sales, the impact on local real estate prices has been limited, easing earlier anxiety that hundreds of affordable homes dumped onto the market would wreak havoc with real estate prices.
In fact, McKeen Street Landing is providing a much-needed source of affordable homes, according to Realtors and representatives of the Brunswick-Topsham Housing Authority.
Auburn-based developer George Schott purchased the McKeen Street development in 2010 as part of a larger deal for 700 units of former Navy housing in Topsham and Brunswick.
Schott completed a purchase of the land underneath the development from the Midcoast Regional Redevelopment Authority in 2012.
So far, McKeen Landing is the only development where homes are being sold.
The remaining properties, including most of the unsold units on McKeen Street, are being leased to tenants through Schott’s property management company.
Schott is selling the McKeen Street units one or two at a time, about 40 or 50 a year. As houses are gradually vacated by tenants, they go on the market, Gleason explained.
“We didn’t want the market to be inundated with houses,” he said.
Acting Town Manager John Eldridge said Schott agreed to sell the houses on a piecemeal basis when he purchased the property from MRRA, and he’s glad to see the developer has followed through with his commitment.
“I think they’ve lived up to what they said they’d do and eased the impact on the market,” Eldridge said.
Even though the town has taken over responsibility for plowing roads and sidewalks in the development, the expenditures are balanced with increased tax revenue, he added.
So far, sales at McKeen Street have surpassed expectations and prices have increased in order to meet demand, Gleason said. For example, a two-bedroom town house priced at $99,500 in 2012 now costs $110,500.
Prices for other units range from $139,500 for a three-bedroom garrison to $152,500 for a four-bedroom colonial.
But even though prices have increased, they are still well below Brunswick’s $180,000 median home price, said John Hodge, executive director of the Brunswick-Topsham Housing Authority, making the development an important source of affordable housing.
“We’ve always felt our job was not to supply housing if its being supplied by the private sector,” Hodge said. “In this case, that need is being filled by a private developer like George Schott, and that’s great. That means the market is a little more balanced.”
The housing authority isn’t formally involved with the McKeen Street project.
According to a homeowner profile compiled by Gleason, more than three-quarters of the people who have purchased property at McKeen Street Landing fall within the threshold of affordable housing, earning an annual family income of less than $80,500; more than half were first-time home buyers.
Buyers also tend to be local, with 66 coming from Brunswick or the immediate area, while another 30 buyers moved from the Portland area or other parts of southern Maine. Only 12 of the buyers were from out of state.
So far, fears that a sudden glut of vacant housing would have disastrous consequences on Brunswick’s housing market haven’t materialized.
“We didn’t know what was going to happen,” said Heather Gottlieb, an owner of Welcome Home Realty and President of the Merrymeeting Board of Realtors.
But as sales at McKeen Street Landing have grown, so has confidence that the development won’t have the feared impact.
“There hasn’t been the surge of properties come on as we anticipated,” Gottlieb said. “I think that was one of the biggest concerns, that there was going to be 20 of the units on the market at a time.”
In fact, the high-quality affordable houses are offering a welcome counter-point for Brunswick’s relatively expensive housing stock, giving first-time buyers – or people looking to downsize – the option to buy in the community, boosting the economy and motivating the larger housing market elsewhere, Gottlieb added.
Peter L. McGuire can be reached at 781-3661 ext. 100 or [email protected] Follow him on Twitter @mcguiremidcoast.