real estate cool down or still rising ?

In my humble opinion IMHO

Real estate on St Thomas and St Croix is near it's peak price.

The price on St Croix has not been this high since 1989 (Hugo time).

The MLS inventory for condominiums is as low as any time I can remember in the past 15 years. The asking price for most condos and homes on STX has doubled in the past 15 to 20 months. As an example, Villa Madalaine condos that were selling for just over $200,000 two years ago are now asking as much as $479,000. Those listings are increasing. There are now 5 units on the MLS.However Some other condos have no current listings. The Reef,Coakley Bay,Colony Cove, Sugar Beach,etc...no units listed.

I could be wrong but I expect housing prices on stx and stt to be flat for a while. St John however is another market and should still show some increase in the near future.

IMHO. Fact; there is a finite amount of island property, period!!! Unless there is an over all catastrophic hit to the US economy in general, island property will continue to rise over time.

JW

I too think that property in the USVI is a sound investment. I can think of some dramatic scenarios that might temporarily halt appreciation but these scenarios would likely affect mainland property values as well. If you can find what you like at a price you can afford I'd recommend you go for it but then I'm someone who intends to die without any regrets!

The real estate in stt is a bargain... I live on the coast in New Jersey and the price of waterfront real estate here is far and away more expensive than the VI (including stj)

IMHO, real estate here will accrue in value over time and is a good investment. But for those looking to make the move or invest in a VI home, but please be careful when you see words like "bargain". While it's true that housing in STT/STX can be far more affordable than certain markets in the continental US, even modest and fixer-upper VI homes are far more expensive than much larger/more modern homes in a lot of areas of the 48 states.

Two years ago, you could expect to pay a minimum of $200k for a home on STX that was in close to move-in condition, more for an east end home. With wages that remain relatively low and housing costs going up, the cost of housing may cause sticker shock or even be out of reach to folks who are interested in moving here from certain areas of the continental US.

--HC

Supply is much lower than it has been in recent years. While it wasn't uncommon for homes in good condition, located in nice areas with ocean views to take months to sell they now our gone quickly.

We recently lost an opportunity to purchase a home in the Green Cay area of STX, because while we were thinking about it sold.

Desirable properties in good condition in the mid range price of $400K - $700K are scarce on STX.

On the other hand, if you happen to live in Lincoln Neb and hold a winning lottery ticket you can find some fantastic properties here in the $1 million and up bracket.

Jim

Not having had a major hurricane here since 1995 certainly helps...

All indicators strongly suggest that prices on STX will continue to rise for quite some time. The lack of inventory on the market isn't going to be rectified any time soon, as there isn't much new construction going on and more new arrivals are coming to live full-time and not just buy a property to use as a vacation rental. Supply is low and demand is high. That makes prices rise. With Baby-boomers retiring and looking for a warm place to call home, the islands are likely to increase in population over the next 10 years.

STT and STJ went through some serious increases in price over the past 15 years. STX remained under the radar and did not see the dramatic increases. STX is now on the leading edge of an upward price adjustment. Prices for certain types of properties have risen over the past year in a dramatic way, but there is still a lot of opportunity to make a lucrative investment return on real estate purchases.

Everyone wishes they had bought at the low end of the market in California and Florida and other places where property prices have risen to eye-opening levels. The trick is catching on early enough in the upward price surge to buy in low and eventually sell high. With what is happening to prices on STX, there is still some time to get into the market... but the sooner the better! The buyers who bought at Villa Madeleine and St. C's and other condo complexes a year ago are deliriously pleased with their equity adjustment since. Buyers who hesitated are now lamenting a missed opportunity. Those who continue to hesitate now will quite likely be kicking themselves a year from now.

There are many people who write on this website who recommend that newcomers not purchase real estate until they have been in the islands at least 6-12 months... but INVESTING in real estate is not something you need to delay if you are careful in the property you choose. Buying a house for your family to live in might require a little more research and understanding of the island, but even if you buy a property and ultimately choose to leave the islands, you may have made a great investment that will be a financial benefit to you.

Bottom line... real estate is a great investment opportunity for people all over the world. Do your research and make good choices, but don't be afraid to acquire some island real estate while it's still available and at an affordable price. There's only so much of it out there and the demand continues to increase. It's hard to go wrong.

Well put Alexandra. Although I plan to move/work on stt I'll be chatting with you about acquiring some land on stx.....possibly for a future house or just an investment.

Jeff

Alexandra is right on the mark.

In addition, there are a lot of lending programs for investors and second home purchasers, especially if they have their primary source of income from the states when they qualify. For example, Stated Income loans are not available if your income is sourced on island. This could be a big difference for self employed. Simply put, BUY NOW before you permanently come to make a go of it on island. Also, the conforming loan limits are significantly higher for the VI, so you have a much greater opportunity to find a property and get the best prevailing rates with higher LTV's rather than higher Jumbo rates with maximum 80% LTV's.

I have to join the chorus. Alexandra has nailed it. I have been following Caribbean real estate for the last 3 years. St. Croix is currently the most undervalued English-speaking island in the Caribbean. It is just now starting to take off (rebound). An increasing number of baby boom buyers are now beginning to enter St. Croix the market. In the scheme of things St. Croix is the big bargain compared with U.S., Florida, California and the rest of the English speaking Caribbean.

The problem is that very little is being built on the island to respond the the increasing market. Too many buyers are now chasing too few condo units. Well done up-market east end condo properties such as Villa Madeleine, Carden Beach, even Coakley Bay and The Reef are especially undervalued.

Villa Madeleine, for example, is really a development of free-standing seaview homes with private pools rather than traditional condos. The individual units are much closer in character to small single family seaview homes than condos. As such their sales prices are now quickly rising to the price level of east end seaview homes. Plus there is management to take care of the villa while the owners are away. A big plus for prospective baby boomer retirees.

Until builders and developers on St. Croix start responding to this expanding condo market, prices in good condo projects will continue to rise dramatically. Since very little is now in the pipeline,it could be years before price rises begin to level off.

The conclusion: Waiting to buy could very well mean being priced out of the St. Croix market completely at the best developments.

Just so "investing" folks realize that nothing is guaranteed. Lots of folks thought STX was a real estate gold mine, when along came Hurr.Hugo. Next came Hurr Marilyn, and various other economic factors, and the phrase became "Look at the price, it can't get any lower", but on stx, it did. Took us 16 years to get our condo market price back to where it was in 1989. Not to say it would happen again, but never say never.

The real estate cycles come and go. I had a couple friends come down last week and purchase a condo on St. Croix and from the looks of their market it is underpriced and very reasonable compared to STT and STJ.
One thing I have learned from following various market sectors is when Joe Six Pack is at the water cooler talking about Real Estate or stocks as in the late 90's that usually a pretty good indicator for a correction coming soon.
If you are in it for the long haul you will most likely always be fine if you are looking for a quick buck then buyer beware.

Alexandra: I am afraid I recommend that a newcomer wait for 6 months or so before they buy. I think the important difference is, you are involved in the real estate market and have a vested interest in people buying investment property. I am concerned about getting people who can make a difference in the territory by *doing* something. Your way, everything is going to be too expensive for everyone else.

IMHO, of course! 😉

Kas - in response to the lack of construction, I am working on a development project on the north shore that will include 7 waterfront houses and 15-20 condos. After that, the intention is to build a complex similar to Villa Madeleine, also on the north shore, to fill some of the demand for individual homes with pools and an ocean view at a reasonable price. Those projects should do well and lead to others.

Alexandra,
Where exactly on the north shore is this going in?

Thanks,
JW

Jim - the first project is in La Vallee, immediately east of the strip if $1M+ homes and just before the road turns inland and goes around the curve towards the Lutheran church. The waterfrontage runs almost all the way to Lobster Reef. The beach is sandy and you can snorkel and dive from the beach.

Just my two cents but I think that (and please correct me if I'm wrong) Alexandra Marshall and many posters weren't on St. Croix when Hurricane Hugo devastated that island in 1989 and then segued into St Thomas. The damage to STX Croix was far worse than the damage to STT during that particular hurricane.

And then there was the turnaround when Hurricane Marilyn wreaked total havoc on St Thomas on September 15, 1995.

It seems that the hurricanes in the last few years have taken a different bent, their swath has changed somewhat and the Virgin Islands have been spared for now. In the meantime, Grenada which was always considered a "safe zone" was trashed bigtime and the hurricanes went on to rage through Florida for a couple of years and then of course hit New Orleans and Mississipi.

"Beaches" made a very good point where investment is concerned.

Locals and long-time residents know full well the devastation wreaked by a major hurricane. That the islands have been spared for several years now is cause for joy but shouldn't be cause for complacence!

Cheers!

Amen STT Resident. The accounts and photos of STX post-Hugo are the most sobering fact about the dangers of island living that I have ever read.

--HC

A fact of island living is that a major hurricane might hit any fall and it would affect property values for a period of time. Other places you can live also have hazards to face. I grew up 32 miles from the summit of Mt. St. Helens. A sister later also lived through some major earthquakes in California. Other people live in tornado zones, etc. No matter the local peril, we all still must live our lives and plan for the best even as we prepare for surviving what nature can throw at us.

The more mature the world becomes, the quicker it recovers from disaster. A devastating storm in the USVI would depress real estate prices for a time, but we would recover. With any luck, building codes will have increased the amount of homes to survive mostly intact.

There are no sure things when investing. One thing I count on is that there is a finite amount of land on this planet... and only a small part of it is in a warm climate and governed under an American flag. That land is uniquely precious and inherently valuable, no matter what occasional tribulations it goes through.

This has been a very interesting discussion. There appear to be two significant points of view,

On one hand Alexandra chants the mantra that there is so little land ..so many people. And that is very true and to a certain extent has changed the equation.

However those of us who saw real estate prices on St Croix before Hurricane Hugo and after Hurricane Hugo, know what really happened. Prices for condos and houses are just now approaching or exceeding 1989 levels. I know many people who lost it all in Hugo, mostly because their real estate lost most of it's value. This is very similar to the "high tech" meltdown on the stock market where millions lost billions...and most have never recovered.

It can and probably will happen again here and on St Thomas.
As Alexandra says "it won't be as bad this time.." Well I am betting that it will.

Owning homes in "hurricane alley" should be a very sobering fact for everyone. As proven by the many hurricanes, Tropial Storms and so-called "Weather Events" we've experienced over the years. Retro-fit/update existing home with latest building code and hurricane damage prevention recommendations. Build new homes based on what lots of folks have learned from the past. Its more expensive to build or retrofit your house properly so it can stand strong during a storm but it is worth it - not just in $ but also in the mess, heartbreak, and subsequent aggravation and anger you'll experience afterwards. After each hurricane ANYWHERE, thank your lucky stars and spring into action because the next hurricane could be stronger and it could be heading towards your neighborhood. This was/is not intended to be negative post. If you own property in an area vulnerable to hurricanes, this is the "other" reality about living in paradise.

Good stuff guys. I agree with everyone. I do know that when I build, it will be based on practicality with respect to 'canes. Want a beautiful island casa just like everyone else, but it will be as 'cane-proof as possible.....then it'll be beautiful.

So I guess the best time to buy a lot is after the next 'cane, huh? It's like tornadoes here in Tornado Alley.....they're coming, you just don't know when/how severe.

I was working on a house in a beautiful neighborhood here in Ft. Worth called Monticello when the big spinner hit downtown Ft.Worth back in 2000. When I went back after the storm, all you could do was sit/stare.....the destruction was unbelievable.

Jeff

Hey Jeff,
That tornado that blew through downtown Fort Worth later missed my house by about a half a mile. It took out a high rise building... not leveled, but but damaged beyond what the owners could afford to repair. What ever happened to that building?