Questions Regarding STX Real Estate Market

The 06 means it was listed in 2006. The 08, listed in 2008.

I've said this before. Be careful with condos. Don't just check out the condo fees, check their history of assessments to the owners. IMO, the more owner-occupied, the better. The owners seem to take a more active interest if they're living on property or at least if they live on the island. And check how they charge for water. I've always lowballed any offer on every property I've ever owned & have never paid near the asking price.

Coldwell Bankers' newsletter shows, for 7/07-07/08, the average length a condo is on the market is 198 days, homes are 267 compared to 151/288 for same period 06-07. Average price for both seems to have risen 10%. Avg sell price of condo 07-08 is $236,000.

Sugarlander - The first two digits of the listing number correspond to the year in which it was listed. The following digits of the number signify which order the listing came on the market that year. Four digit listing numbers usually are from the latter half of the year, while 1-2 digit numbers were probably from January, for example.

You cannot rely on the listing number alone to determine how long a property has been on the market. Some properties are listed for years without selling but the agent enters it as a new listing after a while to make it appear fresher. If the seller changes agents from year to year, it also shows up as a new listing each time. For a specific property, an agent can do a search of the MLS archives to find past listings for a property and see when it has been listed and sold and for what price through the years to help you grasp the whole picture.

The average time on the market for house and condo listings has increased during the past year versus the prior 3 years when the market was burning hot. Recently, house sales have increased and certain price ranges of houses have begun to move again. The condo market is still pretty cool. You will see that some complexes have a dozen or so active listings, which is unusual at most complexes and a marked change from recent years. This gives buyers less fear of loss and decreases their sense of urgency in making an offer, so condos languish on the market even when they are in great shape and well priced. As the buyers' market continues, some sellers are discounting their selling prices and this has buyers waiting even longer to see how much more prices might drop. In past years a seller might have agreed to an offer price 5% or so off their listing price but recently we have seen some offers accepted in the 10-20% discount range. This is a case by case basis according to the seller's situation and not across the board. Prices seem to have stabilized versus the rapidly rising listing prices we saw in 2005 and 2006.

Sales tend to be fairly stable all year around on STX. The lack of a snowbound season doesn't keep buyers from making purchases through winter months as it does in many mainland markets. We do see an increase in the sale of $1M+ houses during the winter snowbird tourist season. Modestly priced houses and condos usually sell well year around, such as houses in decent condition priced under $350K. The recent downturn in the condo sales figures is likely to recover somewhat as the shock over the mainland mortgage crash stabilizes. I say this because historically many condo buyers are investor-buyers and they are taking a hiatus from new purchases until things get sorted out up north. Houses in the $400K-$850K range had unusually low sales activity from July 2007 through March 2008 (19 properties sold) but have recently started moving more briskly (nearly 30 sold/pending in past 4-1/2 months). Some of this was due to hopeful buyers having to wait a bit longer for their houses to sell on the mainland and enough time finally passed for some of those sales to occur allowing offers to be made on new purchases here.

For hot market areas of the island, the east end and central sector of the island typically sell the best. There are never many listings in the west end and many of the properties that do come on the market in the west are in neighborhoods that continental transplants rarely buy and move into. Since most locals prefer to build their own homes than to buy something listed in the MLS, such listings are usually slower to sell than the average. Newer homes or recently refurbished homes sell faster than rundown and dated properties. Homes with ocean views sell much faster than homes without a glimpse of the Caribbean. Most buyers prefer their ocean view to NOT include Hovensa or WAPA if at all possible. Buck Island and Green Cay and C'sted Harbor and Salt River and Hamm's Bluff are requested views. Houses with rental units for income to help offset the mortgage are popular and allow a higher purchase price. Remote properties are a slower sale than ones closer to the action and easier to find. Concrete construction sells much faster than wood frame construction. Gated communities are desirable to many buyers, especially new arrivals. There are lots of factors that can be compared.

Prices tend to be higher for similar houses the further east you go. Waterfront has the highest prices and ridgeline or knolltop properties are next highest in price/'value. We have seen an increase in new arrivals bringing pets to the island over the past couple of years and that also plays into what happens with the condo market since most complexes do not allow pets in the units on STX. That translates to fewer potential buyers and tenants for condos as the pet owners scramble to find houses to live in.

Thank you for your comments, particularly Alexandra's in-depth analysis of the market. She really has an intimate understanding of the market. We are still considering the compromises that we invariably have to make e.g. price, location, size, property age, maintenance fees, owner occupied %, etc. But this really helps. It sounds like ti's a great time to buy.

it IS a Buyer's Market at this time, so those able to buy can pick up some good deals. Real Estate markets are cyclical all over the world. Our present downturn will recover in time and prices will begin to rise once more. If you want to watch for a while and try to buy as close to the bottom of the market as possible, make sure you are poised and ready when the buying activity increases because at the first whiff of recovery sellers will stop discounting as much. There are currently some really good deals out there on condos at some of the complexes with large standing inventories of listings.

As you are about 7 months from your lease expiring, it's not too early to start a preliminary property search to really take stock of the inventory and prices. You may find a few properties of interest to watch and see if they remain available as your ideal buying window comes closer. Once you have seen the current listings, it is easy to keep up with the few new listings as they appear. Remember that it takes 2-3 months to close most house or condo purchases here once the contract is fully agreed, meaning you'd be likely to go through your offer process during the winter holiday season. If a house has been on the market for a while, the seller is likely to be flexible on setting a delayed closing date if you would prefer that, which means you could solidify your selection sooner if you come across a property you really want. Prices typically rise from Xmas through March since the winter snowbird tourist season historically increases showing and offer activity. Making an offer on a property in late November or early December before the increase in market activity and requesting a March closing wouldn't be out of order.

If you come across a property you really love, you'd be wise to find a way to get it locked up for purchase even if it's a couple months sooner than ideal. Most properties here are unique (even condos have many differences in condition and furnishings and renovation and view from unit to unit) and you wouldn't find another just like the one you really like if you delay making an offer and another buyer jumps in ahead of you. That breaks the hearts of a lot of buyers when it occurs.

I have followed St Croix real estate for years. I am not a real estate professional and do not have any insider knowledge. Alexandra has done a good job of explaining the current market. I am curious about a couple of trends in condo sales.

The market here has actually been very bad recently, the total sales dollars are out of proportion because of the sale of two $2,500,000 (two million five hundred thousand dollar) houses in Shoys on the east end. The actual number of units sold seems to have declined quite a bit. Alexandra's comment that it is becoming a buyers market might well be true. However, I have not seen the lower condo prices reflect this yet.

I keep waiting to see the condo prices drop twenty or thirty percent as they have in the states. I don't think that we have seen that yet. When it does, I will accept that we have a buyers market. As long as sellers are holding on to their unreasonable price expectations the market will continue to stagnate.

My advice is do what people are doing in the states. There you are seeing low, low offers and foreclosure purchases, by younger buyers.
Things here move more slowly and show less change, but I do expect prices to decline.

Condo listing prices aren't all coming down dramatically, but the units that have sold at some of the complexes with lots of listings have gone for enormous price decreases versus their listing prices. For example, while most listings at St. C's are priced from $170K-$250K, the last couple of sales have closed at just $120K and $123,500 with other recent sales at $145K and $153,500. This takes us back to prices in 2005 when the market was just starting to take off. I've also seen a few very recent closings on villas that sold for 15-25% less than their original listing prices (one from $699K to $545K and another from $699K to $600K, for example).

When inventory rises and sales activity decreases and time on market rises and sellers start discounting prices, that does mean we are moving into a Buyer's Market.

Some of the dramatic drops in prices on the mainland is occurring due to the rampant foreclosure situation. Sellers will discount hugely rather than go through a full foreclosure process. We don't have a foreclosure crisis here since most buyers put a large percentage down when they get a mortgage and don't easily walk away from that. Foreclosures in the USVI are quite rare, statistically. Sellers here don't need to discount to the point they are paying someone to take their property. They may give up some of their profits versus what they would have gotten if they had sold prior to the downturn in the market, but most still are making a pretty good profit versus their purchase price if they bought more than 2-3 years ago.

Thanks Alexandra for the market information. You are saying that recent condo sales were for less than the listing price. That would be a good indicator of a market shift. You are correct regarding the difference between market action on island versus the states. There is no way that we will see the downturn being forced by foreclosures and bank sales. However as you point out, the buyer money from the states is at least temporarily drying up.

There is a lot of down pressure due to the disastrous real estate loses in the states. I am currently living in California and keep watching the St Croix market so I can get the best deal possible when I return. My California real estate has declined over 20% in perceived value because of this crash. When I come back, I will have that much less to spend on St Croix real estate.