Real Estate: Moving to STJ

It's unlikely you'll get much of a discount for an undamaged home right now. If anything, such properties are more valuable than ever.

I'm hearing just the opposite. That there is no buy demand and many wanting to sell because there villa ownership strategy was contingent on seasonal rentals and at least for this season there looks to be few takers.

This is an interesting topic, am hearing these opposing points of view as well, sure would be great to get some good info from the real estate community, sample recent closed sales data, days on market, price reduction histories, etc...but then it may just still be too soon to see a trend.

A STJ real estate company called 340 has a general post hurricane report on their website. It claims significant price reductions in the short term. St. Croix real estate in 1989 after Hugo could be instructive. Prices fell thru the floor for several years. In fact, much of the island was abandoned by gringos. Uncompleted houses still sit unclaimed there. Prices had returned to old levels just before the refinery closed.

If a villa ownership strategy does not account for a down year (or two), it's not a very good strategy.

Have you ever been to STX?

I've been to STX several times & owned a condo there. Love STX. Almost as much as STJ,

A STJ real estate company called 340 has a general post hurricane report on their website. It claims significant price reductions in the short term. St. Croix real estate in 1989 after Hugo could be instructive. Prices fell thru the floor for several years. In fact, much of the island was abandoned by gringos. Uncompleted houses still sit unclaimed there. Prices had returned to old levels just before the refinery closed.

I usually look at the STX condo MLS changes daily. There has been very little change since Maria on both new listings, drops, or price changes.

Yes, from what I understand there is no real estate market now on any island, except for the real bottom feeders seeking the desperate. As everything begins to shake out with insurance adjustments, repairs etc., expect the market to emerge and at what buyer discount.

Yes, from what I understand there is no real estate market now on any island, except for the real bottom feeders seeking the desperate. As everything begins to shake out with insurance adjustments, repairs etc., expect the market to emerge and at what buyer discount.

I think STJ has been overpriced for quite a while.

The market for $1 million plus homes on FL's west coast has softened since Irma, too. Less than $1 million not so much. Is that a trend?

Nonetheless, I would be feeding the bottom now for private sales in the VI if you have time and cash. I would not be waiting for the MLS.

I'm hearing just the opposite. That there is no buy demand and many wanting to sell because there villa ownership strategy was contingent on seasonal rentals and at least for this season there looks to be few takers.

That is already changing. Since you used to live here, you know that one of the things that sets STJ apart from STT or STX is the large number of St John-devoted vacationers who come back year after year. And a lot of those people want to come down and help as well as enjoy the beaches and support their favorite local bars and restaurants.

Our recovery on this tiny island is progressing more rapidly than we could have hoped for. Power is coming back on, grocery stores are fully stocked, and car rental agencies and gift shops are open and eager for business. So even though there is a long way to go in many ways, the word will spread fast on social media as people continue to visit. I would bet demand will more than keep pace with supply for vacation rentals.

As well, there remains a huge shortage of homes for long-term rentals (especially 1 and 2 bedroom places). You'll find deals on heavily damaged homes where the owners would rather take the insurance money and walk away than deal with rebuilding. But it's unlikely anyone with an intact home is going to sell cheap right now.

On STJ, the $500k-$800k sales prices have always been the most active. Over $1m+ considerably slower. More buyers. I'm not sure what the $1m+ market will be look like post hurricane. I can only guess it may be all but dead.

I'm hearing just the opposite. That there is no buy demand and many wanting to sell because there villa ownership strategy was contingent on seasonal rentals and at least for this season there looks to be few takers.

That is already changing. Since you used to live here, you know that one of the things that sets STJ apart from STT or STX is the large number of St John-devoted vacationers who come back year after year. And a lot of those people want to come down and help as well as enjoy the beaches and support their favorite local bars and restaurants.

Our recovery on this tiny island is progressing more rapidly than we could have hoped for. Power is coming back on, grocery stores are fully stocked, and car rental agencies and gift shops are open and eager for business. So even though there is a long way to go in many ways, the word will spread fast on social media as people continue to visit. I would bet demand will more than keep pace with supply for vacation rentals.

As well, there remains a huge shortage of homes for long-term rentals (especially 1 and 2 bedroom places). You'll find deals on heavily damaged homes where the owners would rather take the insurance money and walk away than deal with rebuilding. But it's unlikely anyone with an intact home is going to sell cheap right now.

Thanks for what sounds like on the ground analysis. If you believe there will always be more vacationers than villas suitable for rental, a price shake out is unlikely. This was not STX's experience after Hugo. Just the opposite. Tourism dried up and so did real estate prices. I know what you mean about loyal STJ vacationers. Who wouldn't be loyal, the mostly park island is beautiful. This will certainly be the test.

Thanks for what sounds like on the ground analysis. If you believe there will always be more vacationers than villas suitable for rental, a price shake out is unlikely. This was not STX's experience after Hugo. Just the opposite. Tourism dried up and so did real estate prices. I know what you mean about loyal STJ vacationers. Who wouldn't be loyal, the mostly park island is beautiful. This will certainly be the test.

Yes, STJ is situated very differently from STX, especially today. We were really at an apex with tourism in the last few years, hardly even slowing down in the summer months. STX was still fighting its way back toward a tourism industry in 1989, after losing most tourism in the 70s due to the Carambola mass shooting (back when such things didn't happen every week like they seem to now in the US...).

The difference is supply on STJ - compared with STX, we have a very small percentage of the island that is privately owned vs NPS owned. So that makes privately owned land more valuable to start with, simply because there isn't very much of it. There are definitely regular visitors who would love to come down but their usual rental is unavailable (destroyed or currently housing relief workers or locals).

Stateside St John lovers are big on feeling like they are a part of this place, and many of them would love the chance to be here helping out for a day or two while on vacation. As well, many of our regular visitors have money to spend that they would like to be putting into the St John economy - taxi drivers, restaurants, shops, etc. - but they aren't sure yet when they can or should come. As the reports become more and more favorable from those visiting, the bookings will flow quickly.

It won't be an outstanding season compared with recent years, and you may find more sellers than before. But it's unlikely these will be intact or lightly damaged homes, unless they are owners who have severely overextended themselves and can't hang on for a few months to replace the lost short-term rental income.

Also, there is a huge shortage of long-term rentals right now, so anyone who wants to make money would do well to invest in a destroyed property where it's possible to build a multi-unit dwelling. There is a lot of demand for 1- and 2-bedroom places, and the demolition work has already been started!

Having lived on STJ for 3 years 2010-13 I understand perfectly what you mean. Long term rentals would well be in much demand given the need to house the recovery/construction workers. However, the real estate people I have contacted said to expect some drop in prices. The extent of which is still unknown.

Yeah, it won't shake out until insurance checks start arriving. For instance, if I get $1 million from insurance on a property I bought for $1.5 million, and I don't want to rebuild, I'd be fine with selling for $500K. Let's say all that's left is a foundation and a cistern, maybe septic - that's still a huge head start for a buyer who wants to build. Still, I don't think intact homes or lightly damaged ones will see significant price changes, except from owners who need to sell quickly for a personal reason. Time will tell; it will be interesting to see what the market does.

Yeah, it won't shake out until insurance checks start arriving. For instance, if I get $1 million from insurance on a property I bought for $1.5 million, and I don't want to rebuild, I'd be fine with selling for $500K. Let's say all that's left is a foundation and a cistern, maybe septic - that's still a huge head start for a buyer who wants to build. Still, I don't think intact homes or lightly damaged ones will see significant price changes, except from owners who need to sell quickly for a personal reason. Time will tell; it will be interesting to see what the market does.

And, the selling for personal reasons may just mean they're "done". Sometimes retirees and older, well heeled second home buyers only want a place to relax and spend their leisure time - not a re-build project or patiently waiting until the island is pretty again.This may especially be so on STJ since the second home demographic has even more expendable income than most islands. This would mean either taking the insurance money and running or selling and moving on to somewhere else. We'll see.

 

More likely on STJ - let's say the land is worth $1 million and the house is worth $500K.

Since insurance only covers the house and the house was only 60% destroyed since foundational elements remain, the loss would be $300,000. Then deduct 10% for the hurricane deductible - then $270,000 - THEN the insurance company may pay 80% of the remaining loss and cash is down to $216,000. Throw in $100,000 for contents at 80% and that adds another $80,000 to the claim maybe. So you might see $296,000 from insurance.

Would you take the money and run if you don't have a mortgage let alone if you have a mortgage? I think not.

Time will tell - but right now STX is becoming a sellers market if your house is in the market sweet spot (less than $500K), in a good location and has little or no damage.

Yeah, it won't shake out until insurance checks start arriving. For instance, if I get $1 million from insurance on a property I bought for $1.5 million, and I don't want to rebuild, I'd be fine with selling for $500K. Let's say all that's left is a foundation and a cistern, maybe septic - that's still a huge head start for a buyer who wants to build. Still, I don't think intact homes or lightly damaged ones will see significant price changes, except from owners who need to sell quickly for a personal reason. Time will tell; it will be interesting to see what the market does.

And, the selling for personal reasons may just mean they're "done". Sometimes retirees and older, well heeled second home buyers only want a place to relax and spend their leisure time - not a re-build project or patiently waiting until the island is pretty again.This may especially be so on STJ since the second home demographic has even more expendable income than most islands. This would mean either taking the insurance money and running or selling and moving on to somewhere else. We'll see.

 

Appreciate all the inputs, it’s certainly gonna be interesting to see how things shake out

Appreciate all the inputs, it’s certainly gonna be interesting to see how things shake out

It will be interesting. I'll hazard to guess - on STJ - real estate prices will significantly re-calibrate in the short term and bounce back when visitors can return next season. The underlying values remain as long as most of the island is a national park. I'm told to watch for trucks loaded with big palm trees arriving on the car barges as a leading good news sign. Who knows?

Independent Man, that’s interesting about the full grown palm trees...one of my neighbors here at my temporary home in Florida, who’s in the orange grove business, had also recently told me that the palm tree farms here in the states are anticipating a shortage due to exactly what you’re referring to...the instant beautification of the resort and other tourist properties.