Buy now...move later?

If you buy a condo rent it long term or month to month as it will rent better (or more steadily) in st croix and cover your mortgage better. We do not have the amount of vacationers that stt does so renting it out as a weekly rental will Definitely dip off in the off season and may not cover the mortgage every month. However if you want to use it as a vacation house and use it when you come down then your stuck with a weekly rental. Generally you will not get rich renting your property out but hopefully you will break even or gain a little for repairs down the road. You will gain equity though. You can easily but a single family home with an apartment. Live in the apartment (rent the main quarters) and your rent will cover your mortgage, so you live for free. Very few properties (if any) out there that you can manage and have it cover all your income needs.

You would have to be able to buy some in need of serious repair (or a house in good neighborhood in need of serious updating) to make a profit in a flip. While there are more houses sitting in the market then there have been in 2 years the prices have yet to start dropping. That is another thing to consider if you want to get into the flipping trade here. The market has cooled. But being handy you definitely have an edge.

Supply and demand metrics would suggest an upcoming drop in prices which, as the other poster mentions, has yet to occur. I keep up more with the action on STJ but have been told it is somewhat similar on the other islands right now. On STJ there are currently 125 homes on the market. At the rate homes sold in '06, that is almost 4 years of inventory and the number has been rising lately. Reality will set in at some point, it always does. Any rise in long term interest rates will accentuate the decline in sales. If it were me, I would wait.

Puffer,

Great point. Same thing is happening on St Thomas. The inventory levels are rising and sales have slowed way down.

The real estate market has been red-hot the past few years and it has been a great and profitable ride for many, but it is still important to remember that these island real estate markets are, and always will be, extremely volatile.

If you do decide to buy, tread very carefully and do lots of research first.

We bought a condo in STX thru Alexandra in April 2005. The asking prices in the same complex now are 60% to 150% more than we paid. Of course asking is not getting.
Contact Alexandra, a poster on the board, She is really nice to deal with, especially being off island.

Terry -

The market dynamics are much, much different now than they were 1 1/2 to 2 yrs ago when you bought. Although you should do fine and you have a pretty good cushion under you with the appreciation you have accrued, buying a house/condo in today's market is a far different proposition. It's been a seller's market for quite some time, but the pendulum has swung and it is now, or soon will be, a buyer's market once again. These real estate down cycles typically last about 2 yrs and it will take awhile to flush out the accumulated inventory. Seller's are still in denial with asking prices based on yesteryear, but I believe that will change before long as the adjustments dictated by supply and demand forces are made.

Puffer another great point. It seems like you have studied the market very carefully.

Here is an interesting quote from a report prepared for Prudential by a prominent NYC real estate appraisal firm. I think that this explains perfectly what is going on here in the islands as well:

"The phenomenon of rising prices and declining sales is a classic sign of a market in transition. The market has entered a period where the sellers no longer have a clear advantage in the typical sales transaction. Buyers were expecting a deep discount on all transactions while sellers remained fairly firm in their pricing. As a result, the number of sales dropped as the buyers who were resistant to rising prices simply chose not to participate, while those who stayed in the market paid record prices on average."

Yes, I think that excerpt pretty much sums things up.

Thanks to everyone for the advice..... Everyday I feel more informed and excited about becoming part of the island life. I am just afraid that we can't wait till the little is out of school. Maybe move soon? What is the cost of private schooling? And what about opening a business that repairs electronics???? Is there a need on stx? Oh, by the way... looking to speak to a Realtor. Puffer mentioned Alexandria.... How to get a hold of her?

Candy

Candy -

Just to be clear, I never recommended a realtor. I don't know the person you mentioned.

One other phenomena that is supposedly happening is that with the extremely high prices on STT & STJ, property owners their are trying to cash out and move to STX where you get more for your real estate dollar.

Same great climate on STX , more space and less congestion.

Jim

That was me that recommended Alexandra. Very nice lady to deal with, and especially of you are off island.

Candy - many people have done what you are considering doing. Terry is a prime example. He'd love to move here full time NOW, but it looks like it will be a couple years yet before he gets to do that. He has his own personal piece of Paradise just waiting for him when the time is right. Had he waited 5 years to buy, he would have spent a lot more $$ to get the same property considering the upswing in the market since his purchase.

STX prices were stagnant for many years and went through a dramatic adjustment 1-1/2 to 2 years ago with some properties doubling in price during a 6-9 month period. Things have leveled off some and sellers are now getting used to the idea that they can't keep adding 10% to 20% per month to the price they want to ask. We still have a steadily moving market on STX and many baby boomers are arriving regularly for retirement or to plan for a couple years out.

Developers are finally waking up and starting to look at getting permits to build new condos and housing developments all over the island. We're behind the curve on the supply/demand ratio, though. Much of what is on the market is old and run down and not what retirees are seeking. Quite a bit of that may continue to have a slow sales cycle, but new construction will likely see brisk sales when it comes on the market. As an example, a new condo complex was announced at Carambola recently with prices in the $1M to $2M range (ouch!) and within two weeks, two pre-sales went pending. Not bad. Now if we could just get some $300K to $600K offerings for new construction we'd have sales soaring off the charts.

As was mentioned in a previous post, many properties on STX have 2-4 units and a buyer can sometimes cover much (occasionally all) of the mortgage by renting out the extra units. We have a high demand for long-term rentals, so whether you look at a condo or a single family home or a multi-unit property, if you choose carefully it should be possible to keep it rented until you are ready to make your move. The higher the purchase price, the less likely you can cover all the mortgage with the rental income, of course.

You can explore the current listings in the St. Croix MLS via my website at: http://www.ourhomesite.com/stcroixhomes
Feel free to email questions to me directly at stcroixhomes@hotmail.com and I'll try to get you whatever information you request ASAP.

Alexandra,
First let me apologize for mis-spelling your name. I received an e-mail from a gentleman (Peter) that told me that you have his property listed and that you could send me some info. Due to the fact that I am using my school e-mail, your "hot-mail" address has a firewall attached to it from this computer. Please forward any info that you might have. Thanks, Candy

I bought a home in St thomas (Nazareth) in 5/05... the reason i bought was, not that i wanted to move anytime soon. My wife and i have 3 children 3,6,and 8. and will remain in NJ until my yougest graduates HS. My reason was simply i didnt want to be priced out of the market in the future. Our house is currently a rental villa which is self supporting and i still have the option to come down whenever i please. I was recently offered $750,000 more than i paid for it 20 months ago and its not even on the market. its been a win win for me but im not sure if im the exception or the rule?

Dear Lip,

I have been receiving the same information from a lot of people. We are now ready to tie up loose ends and move towards purchasing. Thank you for you input.

Candy

Lip,

Did you mean $75K or were you really offered $750K more than you paid?!?!
I live in my house and it would have been hard for me to turn that one down! 😉

$750,000 would be a MAJOR expeption to the rule.

No i was offered 750k more than i paid... This was actually a story covered in the new york times 12/31... the story was about vi real estate and my home was featured. I did consider the offer, however it come s down to once again , will i be able to afford something else later and to be quite honest, i bought this particular home because of its location and views. I literally bought the worst home in one of the best neighborhoods and have to date sunk about 100k into rehab and furnishings.

There have been a number of properties (condos, waterfront land, some types of houses) on STX that have more than doubled in value/sales price over the past couple of years. A $750K increase would suggest that the property Lip owns was very expensive to begin with and the increase is a percentage of the original value that fits with our rising market increases and/or it was seriously undervalued when she purchased it and she now gets to reap the benefits. Either way, congrats to Lip on the awesome investment choice!

Candy - do you have an email address where I can send the info you requested? Or can you email me at stcroixhomes@viescape.com if the hotmail version of my email isn't accessible to you through your firewall? Some of what I would send you I can't simply put into a message on this website.

Good luck Candy!

We just closed on a St Croix home ourselves! It took almost 9 months from the time we started looking to take a couple trips down, find a match between the location we desired, our price range and a property we fell in love with!! We're also using it as an investment property with as many trips thrown in for ourselves as we can fit in around work schedules! We were afraid if we waited, we'd be priced out. Our home is in a wonderful location, with incredible views and just needs some updating and redecorating to be all that we need! We have lots of ideas that will probably take a couple years to unfold!

My husband's there now, getting a few things done and establishing contacts for work to be done down there while we're stuck here! This forum has been very helpful with island contacts and he has had no trouble getting the help we need!

Happy hunting!!

Seansand

Thanks... I wish that we were as far along as you guys are. We are truly having trouble getting work schedules here figured out so we can get there to look. Candy

Hi Candy!

You'll get there!! In the meantime, study everything about St Croix you can, become addicted to the MLS, check sites like this one daily for more info, .... I think I've "lived long distance" in STX at least a couple hours each evening since last March!!! I'm still at it as we prepare to rent our new home!

We went down for a week ( vacation, actually) and my husband spent 2 days with a realtor just looking and getting to know the island, then we all went for a half day to look at what he liked best in different areas. Five months later just my husband and I went down and spent an exhausting 4 days looking again....one end of the island to the other, took lots of notes, reread all our notes, visited and revisited homes........and ordered multiple drinks in the evening and poured over all the info again beachside!! Well worth all the work...which in reality is just now really beginning as we work on our home long distance!!

Let me know if I can help with anything along the way!! Again, posters on this forum were very helpful!!!

Thanks again seansand...

I am doing the same thing. I am not a big Internet fan. UNTIL NOW. Every chance I get a spare minute I am back on this website. I learn new things everyday about STX. IT is very exciting and at the same time disappointing, (wishing I could "blink" myself there now and just be done with it. I live in Ohio and today and tomorrow they are calling for 1-2 feet of snow and high of 16 degrees. When I think about STX it is not just daydreaming it is mind preparation. Hope that you have a great day. Can't wait to get there.

Candy