Cost of Living going up...up...up

I would also suggest that some of the rental property posted here and in the St. Croix Avis is actually meant as shorter term, tourist or snowbird housing. We rent from an individual - a very nice 2BR/2BA home in the northwest area of STX, near Cane Bay, for $875 a month. It's high on a hill with no A/C, no washer dryer and very little ocean view. We found it, as we did our first home (2BR/1BA, same area, smaller house, $675/month), by word of mouth.

I agree that costs are rising, especially at the popular condos around the island. But if a newcomer is willing to take some time, look around and network, I think it's still possible to find affordable housing.

My 2 cents -- oops, the price has gone up to a nickel!

Here in AZ. the housing market is slowing down, but it went nuts, People were buying homes to just flip them. Many people I know had the value of their new home increase by as much as 25% from the time they signed the contract to when the home was finished.

I see that last year the prices on STX were finally above where they were before Hugo. They dropped for about 20 years. They are still much LOWER then what you would pay here, and with a view. For our condo that we got last year for $100k, they are now getting about $170k, but here in AZ a condo simular to this would set you back $500k or more, depending on the area. In some cases in some of the newer upscale or desired areas, they would go for $1.5 million. Still not the ocean view. I'm not saying they are worth it, certainly not to me.

Don't wish for a big price crash, as it will probably follow a really bad hurricane.

Forgot to add, IMHO, a lot of these higher rental prices are from people who have bought with not much intension of being there themselves, just for investment purposes. It is probably a better buy than at where ever their home is, and more chance t make money.
Is this whole thing good or bad? It depends on your perspective. For us it is nice know that we have bought a place that is increasing in value, especially since we don't rent it out when we are not there. But on the other hand, when are planning to move there in 3 years after retirement, and would like to buy a house instead of a condo. By then, we probably won't be able to afford one, with the prices going up at this rate.

I have friends who have bought places ( long term leases on the land ) in Mexico, down in Rocky Point and San Carlos, that are paying over $350K for places that are not that much bigger then our place. There they have no real title, it is too hot in the summer and a bit chilly in the winter.
Yes it is closer, but it is not US.

Hi all
I am very aware of housing prices and the accelerating cost of renting.

I was trying to bring into focus the real estate price run-up that we have seen through out the country. This cycle is beginning to end. Those of us who are old enough to have experienced many,many economic cycles can see the signs. Some people will lose money, but those in for the long haul will be ok. I am just concerned about the younger families ability to survive such over hyped inflation. As others have mentioned, St Croix is (as always) late to the party. Real estate prices are just now equalizing. But change is coming.

Stxer

I agree with you Lina J. I have gained access to a few rental options that are within $600.00- $800.00 through word of moutn and met some nice folks along the way.

Hi,

This cost of living issue is a good topic STXR.

I very much wonder about these prices too. I do feel that a correction will come just as it has in many US markets. The question is when that will happen and how much it will be. After all, timing is everything when you are making an investment.

I keep hearing that the current rise in prices on the island (STT) are due to the fact that the market has been depressed for the past decade (or two in the case of St. Croix) and that prices are suddenly, magically rising to the levels that they should be. Sorry, but I don't buy this argument. When I look at the data, the sharp and sudden rise in prices is eerily similar to what happened in the stateside market, which is now crashing (and burning) in some places.

My husband and I have decided that we will not buy unless we are able to find value. If we can't find value, then we will continue to rent until we find it. The rentals are WAY overpriced for what you get on STT, but at least you can't get burned renting the way you would if you bought something at an over-inflated price.

I realize that I am saying things that some people will not agree with. So, let me just say that this is ONLY MHO :)! Who knows? I might even end up rethinking my position on this issue in the future, but this is how I feel at this point in time.

As a new buyer in stx but not a new real estate investor / property owner . Playing in real estate as in playing in the stock market has it's risks, if you buy property that you love for both personal enjoyment and investment, and are not in for the short run (fast buck grab) and if you choose your real estate with both your brain and heart most likley you will do ok I LOVE ST CROIX !!!!!!!!!!!!!!!!!!!!!!!

terry,

Even if STX is just going through a forced increase in real estate values, just like some areas of the mainland, the exorbitant cost of home-owner's insurance with wind/hurricane coverage can make the cost of living for housing just as costly as in these other markets. We're paying several hundred more for our current home here per month (inc. taxes and insurance) that we did on our condo just outside of DC, which had close to the same mortgage principle/interest rate, and increased 250 percent in value over the four years we owned it.

After renovating our new STX home, we ended up paying $200-$300 per month more for our insurance than we pay for our actual mortgage. And that's after our insurance costs were reduced by a third because we purchased hurricane shutters. (I recommend everyone who doesn't have shutters to get them -- the insurance savings for the first year will save us enough to cover the full cost of the panel-type shutters with $500 more to put toward hiring help to get them installed.) The reality of what insurance will do to your monthly housing costs (even if you are a renter 'cause landlords pass on the costs) cannot be stressed enough to folks investigating joining our island family when pricing homes they think the can afford. No one should make an offer before getting a quote for coverage from a reputable insurance agent so there won't be sticker shock and terror after committing to the purchase.

Again, JMO - yours may vary.

--HC

HC,

EXCELLENT point and advice point re: insurance and factoring that into the calculations. Thanks for the reminder :)!