$550,000 Homes, $62,000 Incomes: The Math Isn’t Working in Southwest Harbor
The Bar Harbor Story is generously sponsored by Paradis Ace Hardware.
SOUTHWEST HARBOR—It’s likely roughly half of the homes in Southwest Harbor are year-round residents.
That’s what the Southwest Harbor Select Board learned during its October 14 meeting as the Sustainability Committee’s Working Group on Housing gave its interim report on housing.
“Our median homes cost more than three times as much as what our median families can afford,” Emily Samuel said.
Samuel is part of the volunteer working group that has spent hundreds of hours inventorying the town’s housing stock, according to Sustainability Chair Nancy Weingarten.
The cost of a median house in the town of Southwest Harbor is $550,000. The median annual household income is $62,368.
“If you look at the data on page one of your report, the current median home price in Southwest Harbor is $550,000,” Samuel said. “To afford that, a family would need an annual income of $192,000. The median household income in Southwest Harbor is currently only $62,000.”
“This mismatch led to the natural question of, well, then who is buying the houses? So, we investigated what has been selling recently,” Samuel said.
According to the report presented Tuesday, one third of the households are renters who earn 80% or less of median income.
The group looked at home sales in town between September 2022 and September 2024. Only 29% of the 59 homes sold in those two years are currently occupied year round. And then, 26% of the year-round homes that were purchased became seasonal. Approximately 15 of the homes sold are short-term rentals, the group believes.
“An increased number of short-term seasonal vacation rentals appear to be reducing supply of year-round rentals and ownership opportunities that MDI residents can afford,” according to the committee’s report, which mentions the 2023 update to the town’s comprehensive plan.
Southwest Harbor is not alone. According to a housing analysis by Bar Harbor in 2020, Hancock County had 24,116 year-round occupied homes and 14,493 seasonal homes. According to that report, Mount Desert had the most seasonal housing, then Bar Harbor. Some of these homes aren’t weatherized for all seasons, but many are.
An issue is that homes that MDI workers earning that median income might afford aren’t available and the year-round rentals that they could afford are in short supply.
There are currently 15 homes for sale in Southwest Harbor according to the real estate site, Zillow. Five of them are under $600,000 and prices range from $295,000 to $6.8 million.
There are housing lots for sale in the town as well.
The Mount Desert Island and Acadia Region Housing Study (March 2025) by the Musson Group and MDI Housing Initiative speaks to factors in the MDI region that are impacting the ability for people to find homes.
“Driven by lifestyle changes and remote work opportunities, the state has attracted professionals and many new residents to the Seacoast. During this same period, MDI Region has continued to see an aging population, with a significant share of residents aged 50 to 70, with household sizes shrinking as more residents age in place and younger residents move out of the region,” the report writes. “While the region benefits from rising educational attainment and a diversifying economy, housing challenges have emerged, including the rising costs and limited availability of year-round units, which threaten workforce stability—particularly for a workforce that drives the recreation and tourism economies.
“The housing stock in the MDI region is predominantly single-family homes, with limited rental options and low vacancy rates exacerbating affordability challenges. Rising housing costs and competition for homes, driven by seasonal and short-term rental conversions, have displaced many year-round residents. This dynamic disproportionately impacts lower-income households and essential workers, creating barriers to both homeownership and stable rental housing. The mismatch between housing supply and demand has also resulted in inefficient utilization of larger units—which leaves opportunities for downsizing and middle-density housing largely untapped. Meanwhile, housing turnover rates have accelerated, underscoring strong demand amid constrained supply leading to an increased share of newer higher income households.”
The Southwest Harbor committee wants to inventory all the places people dwell in town, year-round and seasonal.
“We would like to see more families, including those with children and those who work here, have the opportunity to live here,” the report reads.
A goal is to look for ways to partner with other organizations to find more year-round homes and also survey current Southwest Harbor residents about their views of the state of housing in Southwest Harbor and then recommend actions or policy changes to the select board.
“Our town is tops and we don’t want to lose any more of it than we have, and so we got to be able to help young families live here,” said Mary Ellen Martel, who has lived in town since 1972.
There were 1,497 households in town in a previous inventory a few years ago. Of those, 56.1% are year-round (840) while 43.9% are seasonal (657).
Now, the 2025 inventory of 87% of the dwelling units (1,309) is 52% year-round (682) and 48% (627) are seasonal.
“Our town is barely half year round dwellings,” said Martel.
The group took a snapshot of one neighborhood: the Clark Point, Dirigo Pine Road neighborhood. Martel lived on that road in the 1970s.
“So it was a good place for me to start from,” she said. “In the 1970s, there were 60 year-round households, of which 40 had someone working in Southwest Harbor. Another 10 worked on MDI or in Hancock County.”
Now, she said, there are approximately 25 year-round dwellings in that neighborhood.
“The children that grew up in Southwest Harbor then, cannot afford to live there now,” Martel said.
Select board member Natasha Johnson said that what popped out to her when reading the committee’s interim report was the balance between being able to work in Southwest Harbor and being able to live in Southwest Harbor.
“And when you drive through downtown, it’s starting to become a disturbing trend to me to see open storefronts and to see the decrease in the number of commercial businesses that are here and the variety of those kinds of businesses that are here,” Johnson said. “So at this point, it almost sounds like what came first: the chicken or the egg? Is it affordable housing to be able to provide people to work in those local jobs? Or do you need those jobs to start to exist so that people can make the income locally to buy a house here to live here?”
She also spoke to changes in town life.
“And you kind of laugh at the ones I’m going to point out because … you’re not going to make a whole ton of money at them, I don’t think, but the businesses that are missing that my parents, my grandparents grew up with was we had movie theaters, and we had a bowling alley, and we had most recently, we had Sawyer’s Market, so the different changes that you can see happening like that. I hope those storefronts are going to be filled.”
John Bennett, Trenton Selectman and real estate agent, at a League of Towns meeting last year, said that certain dynamics of the housing issues facing the region are hard to change, which is wealthy out-of-state buyers who are used to higher home prices.
“They sell a home for $1.5 million, come to Bar Harbor and see a house for $700,000 and that’s a deal. That’s what pushed this out of control,” he said.
Though many local people feel like a $700,000 house on Mount Desert Island is excessively high, people from other states, wealthier states, urban areas, think it’s a bargain.
There’s no sticker shock for them when they look to buy a house in the region. Instead, he said, they realize that they’re getting a great deal.
Then there are building costs.
“Affordable houses don’t exist anymore” when it comes to building starter homes, Linda Farnsworth Higgins who has been a realtor and broker at LS Robinson since 1987 told the Bar Harbor Story last year.
Higgins said one reason is the cost to buy land and then to bring in septic, utilities, and putting in a well. Even a home without upgrades like granite countertops are coming in around $350,000 or $400,000 to build, she said. With currently increasing interest rates, that’s putting those homes just out of reach for a lot of buyers.
Builders aren’t incentivized to construct those starter homes because for the same amount of labor, a builder can create an above-grade dwelling with those fancier amenities and be able to pay his employees more or offer them health insurance. Similarly, a subcontractor can make more money than being a laborer for a builder and that adds to the cost to the builder, often making construction companies hustle to get enough employees to build houses. An employee wants to be paid competitively, and employers also have to pay for unemployment and Social Security, which increases the bottom line for construction companies.
Later this month, the League of Towns will meet. One of its discussion points is looking at a regional approach to finding more year-round homes for people.
LINKS TO LEARN MORE
Where Have All The Starter Homes Gone?
Elevated Trailers: Housing in Bar Harbor
To read the report in full, go here. Also in the packet is the plan’s “Phase 1: Community Engagement Report,” which we’ll have an article on shortly.
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