Real estate market on STX

Several factors:

Condos usually sell during the season so they tend to sit on the market during the off season.

Many of the good properties have sold. Some of what is on the market now is junk.

There are a limited number of buyers for $1 million plus properties.

Jim

House in general take longer to sell here, I think it may be more like an avg of 6 months and to see a house on the market for a year is not unusal. But the market has definitely cool here. There used to be a avg of about 140 houses on the market and now we are avg about 200. Same with condos but not as bad. I'm not saying there is not a maket for flipping....a house that is modernized is most likely going to sell faster here but its not going to be as fast as stateside. So you're going to want to add additional carrying cost in your budget as well as MUCH higher material cost. I can keep track of what wood and cement go for here, let alone all the other things you will need. But if you are the labor you are already ahead of the game and will definitely find work even if you dont flip. Personally i wouldnt suggest flipping....the market is just different down here, get to know it at least first. I would suggest buying and fixing, but then renting it out (rental market is very strong) for a year or at least two and then selling.

We discovered a couple additional factors. Without heating costs and with very low real estate taxes, it is less costly for an owner to hold out, waiting for the price they want.

Chuck,

The hottest Caribbean real estate markets today are STX, Roatan and the Dominican Republic. These islands are underpriced and just now being discovered. STX would be the best place to rehab and flip because of the extremely high cost of new construction. Much of the existing properties on the island are older and of mediocre quality. It won't be hard to find houses for sale needing substantial work.

Look for waterfront or good water view. It adds additional value to whatever you do.

But, be prepared to carry the product for at least a year after it's finished. No way around the long selling time. It's the same all over the Caribbean islands. When buyers are not local it takes time to sell regardless of how good the market is.

You might also want to come down for a few weeks and research how well-constructed homes are "constructed" here. Most expensive homes are either poured concrete or concrete block. I would assume the rehab issues/problems are different here than in the states.

Aren't properties about to be revalued for tax purposes according to actual value as opposed to sales price (which may reflect prices from many years ago)?

In the condo where we own, asking prices have risen 100% to 150% in the last year and a half. I suspect a lot of people are trolling, hoping to catch a big price. " Something is only worth what you get for it, not what you ask for it".
I would get in touch with Alexandra. She is a really good realator to deal with. She is a poster on this board.

Prior to 1-1/2 years ago, you could typically find more than 250 houses, close to 200 condos, and over 550 pieces of vacant land of varying size on the market on STX at any given time. Then we went into a very active period of sales starting in the spring of 2005. Over the next 6-9 months, we sold substantially more properties on STX than were being replaced with new listings and the inventory supply dwindled rapidly. Prices also climbed dramatically in many sectors of the market.

By the spring of 2006, we had about 140-185 houses, 30-50 condos, and around 400 pieces of land as active listings in the MLS (numbers changed regularly as new listings appeared and were snatched up). There has still been an active sales market since then, but many homeowners have jumped into the fray during the summer of 2006 and listed their properties for sale in hopes of picking up a nice profit now that island prices have risen higher than they had been since Hurricane Hugo devastated the real estate values in 1989. As a result, we have seen a rise in the total number of home listings on the market to the current figure of 200 houses. Condo listings have risen to a count of 143, as of today, due primarily to the new condominiumization of Ocean Terrace apartments and the announcement of a new complex being built at the Carambola golf course. There are currently only 389 pieces of land listed for sale.

New home listings to come on the market (and new listings at certain condo complexes) are still sometimes receiving multiple offers in the first few days or weeks of the listing if the property is in good condition, in a good location, and/or has an ocean view. Properties in areas seen as less desirable by buyers, and ones that aren't in good condition, are sitting longer on the market as they do anywhere. Land is still a hot commodity. Many of the pieces of land that have been on the market for years without selling are on steep hillsides and/or have no ocean view and discerning buyers are waiting for new land listings with the features they desire/require.

In the case of condo listings, the complexes that only have 1-2 listings at any one time are seeing rapid sales and rising prices. In the complexes where 6-12 owners put their units on the market simultaneously there has been a stagnation of sales since buyers aren't feeling any "fear of loss" to prod them into an urgent sense of needing to submit an offer if they want to get into that complex. That ultimately may cause a drop in prices at those complexes. Supply and Demand is always an important equation in the speed at which a property sells and it also influences the price to rise or fall. There really aren't all that many condos on the market on STX right now if you don't count the 51 listings at Ocean Terrace and the 22 new listings for Royal Palms (priced in excess of $1M). The 70 remaining condos are divvied among a small number of complexes and don't allow all that much choice to buyers.

If you do purchase distressed properties to fix-n-flip, choose well and you stand a chance of seeing a quick resale when you have the property ready to put back on the market. Properties with ocean views are your best bet and there are some areas you probably want to avoid if you don't want to be stuck with a lemon that nobody wants to take off your hands. One of the things that holds many buyers back from purchasing a property they mostly like is that they don't want to buy someone else's problem and therefore tend to avoid "fixers" or properties that haven't been maintained as they should. Newcomers to the island often don't feel comfortable buying a house in need of renovation since they don't know who they will be able to hire to do the necessary work or where they will find the supplies. Offer them a house they like that isn't in need of reconditioning and the hesitation to make an offer melts away. Of course, the price has to be reasonable for what they are getting!

Waterfront land has soared in price, yet there are a few good pieces/values currently available.

There are price niches in the market where high percentages of the total sales occur. Look for properties that would be valued within those niche price ranges once they are renovated. Sometimes it's hard to get a fixer for a low enough price to make it worth the trouble of reconditioning for resale. No matter how much you put into some properties, they just aren't ever going to sell for more than a certain maximum price. Sometimes that's due to the neighborhood or the view (or lack thereof) or the age and architectural style of the design, etc.

On the idea of renting a property out until it can appreciate more for resale, some properties would do well with that approach, but others would not. Multi-unit properties or single family homes priced less than $250K are the most likely to cover their carrying costs through rental income while you wait for them to appreciate and sell. That doesn't give you a lot of listings to choose from, but new opportunities appear sporadically and there are investors watching the MLS daily for new listings so they can snatch up the cream of the crop.

Do your research and have your financing ready so that when you find the right property(ies) for your purposes you can dive in ahead of the pack.