Every year we like to write a market summary to give buyers and sellers an idea of where the market is heading. This year as we look back, the lyrics of a song come to mind when I think about the real estate market of 2016. I’m sure it’s one you are all familiar with…
”Happy days are here again!
The skies above are clear again,
Let us sing a song of cheer again,
Happy days are here again!”
Yes…our market continues to rebound!
For those of you who are new to our updates, here’s a recap of the last several years. Like nearly every market in the states, St. Croix’s real estate market took a significant hit in the months (and years) following the 2008 market crash. However, unlike the stateside markets, we were hit with second blow to our economy in January 2012, when Hovensa announced that it would close the refinery by April of the same year. That news sent a somewhat stabilized market into a 2nd nosedive…postponing a solid recovery for a couple of years. But, as the lyrics suggest…Happy Days are Here Again! Our market has shown steady growth over the last few years, convincing us that this is more than just a blip…more like a full-blown recovery!
What caused the turnaround? There are several contributing factors…healthy stock market, improving stateside real estate market, and the power of TV. Yes, Home and Garden Television (HGTV) has come to love St. Croix, not only filming several different shows here like Beachfront Bargain Hunt, House Hunters International and Caribbean Life, but giving us far more shows than any other island. Chris and I have completed filming of 14 episodes of Caribbean Life…and stay tuned for more! These shows are bringing the buyers in from all over the country and we remain busy, busy, busy! Thank you HGTV!
What’s the sweet spot? Houses and condos under $1M are selling fast if they are priced realistically. We have a list of buyers in the $300,000 to $800,000 price range. The market over $1M remains sluggish for now with plentiful inventory and only a few sales in the last year. Condo sales have increased as residential inventory begins to thin out.
What’s the weak spot? While we have seen a great increase in the market for the Residential and Condominium sectors, the Land and Commercial markets remain weak. The St. Croix economy has not fully recovered from the double dip. The high electricity prices of a few years ago, coinciding with the closure of the refinery, forced the closure of several businesses. In the last year, we have seen several new businesses and that is a good sign that the business sector is beginning to recuperate. The increased sales in the residential and condo market has helped to bring in more people, which in turn boosts the economy. The electricity rates have also come way down, enabling businesses to stabilize as their operating costs come down. While it will take several more years of a strong residential market and population growth for the commercial sector to improve, we are seeing hope that we are heading in the right direction. Regarding the land market, we won’t see a significant improvement until sales prices of existing homes escalates to closer to the cost of new construction. That will happen, it will just take time.
What’s in the forecast? The data shows that while sales volume and unit sales are up, 2016 delivered a shortage of inventory. We have seen a steady increase in prices over the last couple years, but with such a shortage of inventory and if demand remains the same, we expect to see an even steeper increase in pricing.
What does this mean for you? If you are a seller and you have been waiting for the right time to put your property on the market, then you need to call us ASAP! We are desperate for inventory in the house and condo market.
If you are a buyer looking to invest in a Caribbean island, your timing could not be better. St. Croix is large, beautiful, very livable and it has all the protections of the US flag. The prices are much lower in comparison to any other Caribbean island so your real estate dollar goes much further here. We have many clients who have been searching throughout the Caribbean, Central America and Latin America and after visiting St. Croix, they realize that this is the island for them.
If the timing is right for you, whether a buyer or a seller, contact us for more information about the market and let us know how we can help you.