Current Real Estate Market in St. Thomas, Virgin Islands

Opinions may vary on the St. Thomas Virgin Islands real estate market right now, but I figure my opinion carries more weight than the average persons. I live it each and every day. And you know what? I like what I see.
First of all, the last six months have been great for our business. We have sold a wide mix of properties in all different price ranges. So past results are very nice, but don't necessarily dictate future sales.

So the short term outlook? Well, we have quite a few properties under contract, which is very relative to short term future sales. Of course there is no guarantee that these sales will all go thru, but it is still a lead indicator.

But regardless of recent sales and current properties under contract, there are other reasons to be positive:

Showings have increased dramatically, both with our own customers and even a little bit with our listings (thru other agents). I wouldn't say the doors are being beaten down, but things have picked up.

In talking with various friends, clients, customers, and rental guests- it is quite clear that investment properties are being considered more at this time than they had in recent past. It appears many people are sitting on large amounts of cash, which is not generating any income. Interest rates are very low, and fear of a stock market bubble and keeping money safe doesn't leave a lot of alternatives. So real estate is now being considered again, whereas it seemed to be forgotten in recent years.

With low rates for borrowing money, this simply emphasizes the point above. If you can borrow money to make more, why not?

Prices of real estate on St. Thomas are still quite low. Though sales have increased, prices tend to lag a little bit. They do seem to be creeping up slowly, but they are still quite low.

For years (in the past) I watched sales that didn't seem to make sense from a financial perspective. Why purchase a home where your payments are $5K per month, when you can rent it for $2500? Things like that just didn't make sense to me. But now it has reversed. You can actually purchase a home, your payments increase your equity, and you may still pay less than you would to rent. I am referring to long term rental prospects in this. As an example, I had a customer purchase a home where he rents the apartment below, and also one of the three bedrooms in the main home (to a friend and his roommate prior to the purchase). Well, he is now making payments on his home, increasing his equity and decreasing his loan, and it isn't costing him anything to do so. While still getting a place to live!! A great situation for this person.

Now, from a vacation rental standpoint, it is equally tempting. Many of my customers and clients already know that I own two properties at Sapphire Beach Resort. And they do very well. I have found my returns on investment to be far superior to any others I have. Note, I do have work involved in doing rentals (booking the unit, answering questions, maintaining and cleaning the property), but it is minimal compared to the positive income. And I still get usage for free when I have friends and family visiting. This potential is NOT limited to condos, it is perfectly feasible for homes as well.

I hope you have taken the time to read this blog. My experience with property management / vacation rentals / long term rentals gives a unique view on the great potential we see in todays real estate market on St. Thomas and thruout the Virgin Islands. So if you have any questions or would like to consider such an investment, please feel free to give me a call or send an email.