Real Estate Market on STT (Summer 2006)

Over the past year and a half on STT and STX, there were the following number of house and condo sale closings in each of the following months:

STT STX
January 20 20
February 23 27
March 24 20
April 37 45
May 31 27
June 28 33
July 24 24
August 23 56
September 25 34
October 21 29
November 19 34
December 22 33

January 19 24
February 24 28
March 30 39
April 24 40
May 23 43
June 25 28

I do not regularly keep track of how many properties are currently listed on STT, but STX has had a dramatically reduced inventory since the boom started about 15 months ago. This is true for houses, condos and land. No segment of the market has been overlooked by buyers.

With less inventory, most new listings that are in decent condition and/or priced fairly are selling quickly. This is especially true of anything priced under $400K on STX. Some properties are getting multiple offers in the first couple of days.

There are lots of buyers. School vacation weeks typically have more buyers flying to the islands than non-vacation weeks, so the summer stays fairly busy. With baby boomers entering retirement, there won't be a shortage of buyers in the foreseeable future.

Hurricanes aren't frightening off buyers as much as they did in the past since they now realize they would face hurricanes also in Florida, the Carolinas or the gulf coast and have accepted that this is a risk factor.

Summer buyers have a higher concentration of bargain hunters. Winter buyers include more snowbirds with a higher upper limit on their price range.

Thank you so much Alexandra,

This is very detailed and helpful information.

BTW Congratulations on your new marriage!!!

Best :),
Mell

you're welcome... unfortunately the website didn't save my formatting of the columns, but the first number is STT closings for the month and the second number is for STX.

Mell:

Some advice.......

Settle on a property or small number of properties.

Do your homework....check what these properties have been selling for (not listed for).

Alexandra is right...we baby boomers are coming (we alredy bought). We've passed up Florida and are going further south (USVIs). We have the assets and are looking for a warm winter get-a-way.

Also, (you realtors out there, please forgive this) try to buy from the owner's themselves.

And lastly...it looks like you're waiting for the "right" time to buy......I think you know where I'm going with this....

F.I.

Thank you very much FI for the excellent advice.

And yes, you have picked up on precisely my concern.

Thanks again :)!
Mell

I purchased a condo on STT in May. It was listed For Sale By Owner and only lasted two days. I was lucky to get it as it was exactly what I had been looking for. Completely refurbished from head to toe. We had been waiting for a listing like this because quite frankly we did not want to take the time or the effort to do it ourselves.
I would agree with Future Islander 100% if you can find a property that you like that is For Sale By Owner all the better. That is one less huge hand in the cookie jar. If you have bought and sold realestate before it is an easy process even here in the U.S.V.I.
Pick a good lawfirm to handle the closing and they will walk you through everything step by step.

Some For Sale by Owner listings can be good deals. Others are not. Many sellers don't take a single $ off their listing price even if an agent is not involved. Having an agent working to help you with the details that need to be done during the closing process can also be worthwhile in many transactions. Lawyers handle the paperwork, but sometimes they don't do some of the things that agents do for buyers and sellers. Buyers from off-island might not know some of the oddities of island real estate transactions and how/where to get info they need on their own.

There are far fewer FSBO properties than what shows up in the MLS. Buyers are wise to look at both opportunities to try to find the right property for them. Some buyers who are only visiting the islands for a few days or a week don't have time to research FSBO offerings and watch for ads in the paper for months waiting to find one they like.

Mell - real estate prices continue to rise, so those who have decided that they are definitely going to buy shouldn't wait indefinitely before doing so. That's equity you are losing each month. That doesn't mean to run out and buy "just anything", but if you find something you like, jump on it.

Good luck with finding "home"!

The USVI real estate market has been going through one of the most productive periods in recent memory. As most of you know, the "hot" markets in the states have been experiencing a significant slow down. That slow down makes sense as builders continue to pour new homes into those markets. We are now seeing interest rates, prices and home inventories rise .

The USVI market started a little later but as Alexandra's numbers tell us it is running a little longer. It has not had the competition of cheaper new homes. The existing homes are often in less than top condition, but the buyers still seem to be coming.

It will take a hurricane with major damage, or an economic crash to slow down this market. Both of those are possible, but not very predictable.

Hi Stxer, Alexandra and David,

Thank you for the very insightful commentary and advice.

Best :),
Mell

I second (or third?) FI and David's suggestion to try to get an FSBO, if possible.
We ended up buying our dream home directly from a woman who had advertised in the Island Trader for both rental and sale. Her husband had passed and she wasn't sure what she wanted to do. She really put a lot of emphasis on finding the "right" people for the home she had built with her husband.
I am 100% certain that if she had a realtor and was showing it we would not have been able to afford it and may not have had the chance to show her that we were the "right" people for her home.

I am glad to hear that you had such good luck with your home purchase Onika. Thanks for sharing that.

I do keep hearing this over and over again from almost everyone I talk to -- try to find a FSBO.

Anybody know of one BTW 🙂 🙂 :)????????

If so, PM me.

Thanks :),
Mell

Mell,
What, you don't want us to post a tip on the world wide web?
Don't you believe in sharing?
😉

Onika,

When it comes to this current market here on STT I believe in strictly COVERT operations.

;)Mell

I purchased MY home as a FSBO after stumbling across the opportunity out of the blue. That is the exception rather than the rule in real estate, though.

Since you already live on-island, do look in the paper and ask around about FSBO houses. Also look at properties in the MLS with a Realtor so you see everything available to you. Some FSBO sellers will be happy to pay a half-rate commission to an agent who brings a buyer, so you might still be able to have your agent draw up an offer on a FSBO for you. The seller saves the listing side of the commission and is often happy with that. Some aren't, but it doesn't hurt to ask.

Oh my...I just wanted to input that I would never consider buying property without a Realtor. We have purchased and sold about 57 properties in the last 6 years. The right Realtor is priceless for so many reasons...they aren't the owner of the home after all and are bound by endless regulations and ethical standards.

A homeowner can tell you whatever he pleases and is highly motivated to tell you simply what you want to hear. A Realtor gets paid a percentage of the sale price (usually), so the difference in payment to them is inconsequential. They want you to be happy so that they get repeat business from you and referrals.

Our Realtor always provides us with comparable sold properties so we have a factual picture of what things are selling for in the market. She provides all the necessary documents and paperwork, so we don't have to pay an attorney $500 per hour to fill in the blanks of a standard document. She always helps us negotiate for the best price...using psychological strategies that work to our advantage.

An experienced Realtor has gone through this process time and time again...they make sure your butt is covered with respect to liabilities, deadlines, regulations, etc. For example, who wants to worry about tracking down a recorded easement, gathering endless amounts of information about association dues, property lines, taxes and such? Plus, our Realtor always reminds of a few items/issues/areas of concern that we would have completely overlooked.

Most importantly, it is VERY rare for a property to sell in any market for much less than market value -- that's just a myth. People/the general public have too much information in this day and age. Not many people are completely ignorant to the real estate market they live in. They know what properties are selling for around them. Even FSBOs have internet access and know what to ask for a property -- they aren't giving anything away even though you will be sweet talked to believe that you're getting the deal of the century.

Anyway...I see that there are some satisfied FSBO customers out there and that's great. On the flip side, there are those of us who are not familiar enough with the USVI process, island market nuances, etc. to deal with all the stress and issues that could arise, on our own.

My advice...choose the right Realtor. One that you feel comfortable with and who is knowledgable. If the property is on the MLS, the Seller has agreed to pay the Realtors for their services -- they have committed to selling their home honestly for fair market value. That's all I'm ever looking for...a fair deal.

Hi Limin'

You make some very valid points -- thanks for the input.

🙂
Mell

Thanks Limin,
Makes me feel great too!

No problem guys! Just one perspective. Best of luck to all! =o)

Limin':

I don't 100% agree.

While a realtor could be a great asset, FSBOs could save you $$$.

My attorney on STT charged me $700. to handle my purchase. He drew up the contract and handled all of the other real estate related actions. We closed in 4 weeks.

IMHO sellers on STT (SJT & STX) are, in many cases, mainlanders that just want to "unload" their properties as fast as they can. This puts a buyer at a great advantage. Just MHO.

Also, (realtors please forgive this) realtors tend to "inflate" prices to accommodate their commission and knowing that buyers will want to negotiate a lower price.

F.I.

Hi FI.

I have nothing to do with the real estate industry but some of your comments don't ring true for me. You said, "Realtors tend to "inflate" prices to accommodate their commission and knowing that buyers will want to negotiate a lower price." Aren't these "inflated" selling prices the same prices as the comps FSBO sellers use when pricing their homes? It would seem to me that what a buyer is willing to pay for a property is what determines its sale price, regardless of the asking price a FSBO seller or realtor places on a property.

Also, I'm not sure I agree with your assessment that on STT there are many mainlanders trying to unload their property quickly. Given the prices of homes here I would guess that most mainlanders who have invested in the real estate market here are relatively affluent and real estate savvy and can probably afford to keep their property until they get the price they want for it.

Hi dntw8up

1st paragraph....the realtors that have contacted me, here in NJ (I'm an investor too), have always suggested that I add their commission & 10% to my (predetermined) price. Yes, you're right the final price is what the buyer pays for the property. That's why it's important to know the selling prices not the listed prices. (That may be the reason why many FSBOs just sit there for long periods of time.)

2nd paragraph...I don't know if "most" mainlanders are affluent enough to carry a property for a long period of time. What tends to happen (again imho) is that the properties have appreciated so much recently that sellers don't mind taking a "10 - 20% cut in price". They're still ahead and they don't know what the future holds for real estate prices.

Again, just my opinion.

F.I.

Dntw8tup and FI,
Having worked with typical home/second home buyers, and extensively with investors, I have seen a little of both of your experiences.

I have often seen FSBO's (mostly the average sellers and sometimes new investors) try to keep the profit they would pay a realtor and try to sell themselves. They don't usually offer any savings on the price because they still want to squeeze every dime from the deal. The problem is that they do not get the MLS activity, and may not be very good at marketing or dealing with buyers. Often, after being on the market for an extended time with litle or no activity, they give up and resign to pay the realtor commission.

I would not go so far as to say that STT has a 'large' number of exceptionally affluent or real estate savvy buyers, though there are many such. Many I work with often can barely afford to buy a second home or condo. There are many who would like to buy and cannot get financing.

Buying in the VI is often been an emotional purchase rather than a calculated one. The idea promoted that this is the last piece of paradise in the USA may have some influence on that. Emotional buyers many time will pay too much to get what they "want". Fortunatley, with escalating prices, many sins can be covered when buying that way, as FI suggested.

Anyway, IMHO the psychology of buying/selling real estate is very interesting, and the different experiences and examples we present can all be correct.

Amen, Island Ed!

I'm not a forum contributor where real estate deals are concerned because that's not my area of expertise. I've both bought and sold real estate many times throughout my rather long and varied life (or various lives, whichever way one wants to put it!) but you hit the nail on the head in discussing emotional investment as a big party to home (financial) investment.

I really enjoyed your astute observations which reminded me of something in my past life which had to deal with real estate! Cheers, dear!

Actually in my wonderings around St Croix and talking with people, I have three experiences with viewing homes on the market were the seller was a) old, sick, needed to be closer to family and disgruntled at being forced to sell their island home or b) Going through divorce and having to sell their island home. They did not strike me as affluent enough to a)Keep the place to visit when feeling well or b) buy out the property as part of the divorce. They had all owned thier homes for a period of 10-25 years and I was actually sad to experience them having to give up their treasure. But I also know that they all had great investment and equity in these propertys and did not want to sell under valued. For one he told us it was his retirement money upon selling.

The other scenario, was with a gentleman whose family had owned the property for a very long time. This man could not take care of everything anymore. He could wait though to sell at the asking price and I say good for him. But in waiting, the property was being overgrown by the rain forest. And this piece was a beauty! Some buyer who could afford it will have a wonderful piece of history to explore!

As for Hubby and I, we plan on living on our property and becoming a part of the community in business and in social events. This investment will be our home and although we hope it will be a good one, will not be needing to sell for a very long time. Maybe our inheriters will have to deal with it way in the future! After getting transplanted unto StX in the best manner and the best way for us, we will be selling off our property stateside. We don't mind doing this because all our family is spread out from west to east coast and we are the only ones left in the original birth place.

Island Ed, hows that for some psychology of buying for you! Feeling a bit emotional today!