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Relocating- So many challenges! Help!

 

Bonnie Jean
(@bonnie-jean)
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June 11, 2022 7:55 pm  

Hello- I lived and worked on St. Croix 30 years ago and was hoping to return at retirement but- I have 2 cats and cannot find any condos to allow them. I have $150,000. to spend. I know that's not much but I'm happy living simply. Are there no small houses for sale or rent at that price at all? Realtors have told me to forget it- That there is nothing in that price range. If I rent, I want a long term rental as I am older, and don't want to lose my home. Anyone? siggestions and advice would be much appreciated- I still hope to make this dream come true.  


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Knowlesstak
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June 12, 2022 12:58 pm  

Sadly you won’t find much in that range.  What the realtor won’t tell you is the to give it about a year. Prices will be much lower than they are today (6 figure lower.). A little patience will go a long ways to getting what you want.  Rentals will start dropping as well. 


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jaldeborgh
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June 17, 2022 11:22 pm  

It should rapidly become more of a buyers market, at least for the cash buyers.  The shock of interest rates above 6%, very likely going higher still, should keep buyers needing a mortgage on the sidelines, waiting for rates to fall.  Unfortunately, that may be a long wait as taming inflation may prove to be a nontrivial challenge if the lessons from the 1980’s are to be believed.  Mortgage rates could easily reach 8% by years end.

Once the housing market grinds to a halt, which looks likely, many other sectors of the economy are sure to follow leading to a painful recession.  Housing prices would then logically crash if sellers panic, otherwise assets with intrinsic value tend to hold up well during times of inflation.


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Knowlesstak
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June 20, 2022 9:57 am  

@jaldeborgh 

 

I do agree that interest rates will be around 8% and the market will crash. 


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Gator's Mom
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June 20, 2022 9:58 am  

What is driving inflation?  

Personally, I think the inflation surge is being caused by large corporations deciding to take advantage of perceived supply/demand issues for consumers - particularly energy and food companies. They are trying to make up for money they so generously "gave up" during the height of the pandemic. Wages can't keep up. If this drives down the price of their stocks at the same time, even better. It's a manipulated market.

The response to high mortgages in the 1980-90s was the development of adjustable rate mortgages. They weren't terrible products but some were junk too. 

The VI housing market because of limited supply is not as subject to the big swings in home values as seen on the mainland in past years. There is not a lot of "churn" to drive up or drive down prices significantly. That's true today. A home seller just wants his/her price - he/she doesn't care if the money comes from your bank account or from a mortgage. Sales will take longer though.

The best predictor of a recession is an inverted yield curve for long v short term treasuries AND a democratic president shortly following a republican president.  Over and over again since about 1900.  Yellin says no recession but we'll see. 


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CruzanIron
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June 21, 2022 8:11 am  
Posted by: @gators_mom

What is driving inflation?  

Personally, I think the inflation surge is being caused by large corporations deciding to take advantage of perceived supply/demand issues for consumers - particularly energy and food companies. They are trying to make up for money they so generously "gave up" during the height of the pandemic. Wages can't keep up. If this drives down the price of their stocks at the same time, even better. It's a manipulated market.

The response to high mortgages in the 1980-90s was the development of adjustable rate mortgages. They weren't terrible products but some were junk too. 

The VI housing market because of limited supply is not as subject to the big swings in home values as seen on the mainland in past years. There is not a lot of "churn" to drive up or drive down prices significantly. That's true today. A home seller just wants his/her price - he/she doesn't care if the money comes from your bank account or from a mortgage. Sales will take longer though.

The best predictor of a recession is an inverted yield curve for long v short term treasuries AND a democratic president shortly following a republican president.  Over and over again since about 1900.  Yellin says no recession but we'll see. 

Billions of free money given to people to spend (stimulus money, especially the final payment) when there are shortages of consumer goods, and billions more spent in the Build Back Better funding when there is a shortage of raw materials. 

 

Both of these were also a contributing factor to our rise in inflation. 

 

 


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vicanuck
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June 21, 2022 9:16 am  

Just my opinion but you won't see big declines in either rents or home prices in the VI. For one thing, when the refinery begins to reopen in 2023, there will be a large influx of contractors and employees looking for housing, as in the past. As a 20 year resident and business owner, I can attest that prices never go down in the VI, they only go up.


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Gator's Mom
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June 21, 2022 9:26 am  

The proposed Build Back Better Act passed in the US House of Reps and now is stalled in the US Senate as of June 2022. It has not been enacted.

H.R.5376 - 117th Congress (2021-2022): Build Back Better Act | Congress.gov | Library of Congress


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VIpirate
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June 28, 2022 2:03 am  

The real estate situation today is far different than during the financial crisis, so while a slowdown in transactions worldwide and in the USVI is quite likely with an increase in mortgage rates, historically rates are still quite low.  We've just gotten used to absurdly low mortgage rates the past 10 years and hopefully most people were smart enough and had the means to lock-in very low long term fixed rates.  My wife and I were able to refi our STT vacation home in 2020 at 2.875% with a 15-year fixed rate mortgage.  We got an even lower rate on our primary home.  My son is now purchasing a home and is looking at rates above 6%.  My first home mortgage was a 9% one year arm and I was thrilled at the time as fixed rates were in the mid-teens.  Timing is everything in life. 

Given real estate supply in virtually all markets is quite constrained, it's highly unlikely there will be a "crash" anywhere, but transactions and price increases for real estate are likely to slow considerably in the near term.  Prices tend to be pretty sticky on goods and services except with severe recessions and I seriously doubt we are in for anything close to the economic conditions we had during the financial crisis.

As for inflation, it is certainly primarily pandemic induced, but dropping "helicopter money" to everyone whether it was needed or not if we are honest was a political move to influence votes.  Regardless of your political affiliation, other multi-trillion bills like BBB would have made inflation much worse than it already is.  Too much money chasing too few goods and services.  Fortunately, BBB is very likely dead in the water.  

Unfortunately, in my view the Feds waited way too long to raise rates which will likely make a recession inevitable, but I suspect it will be moderate by historical standards.

Energy costs are a whole other matter, but mostly driven by politics where the present administration is happier to have the drilling and oil production take place outside of our country which introduces challenges when supply gets tight.  Worldwide energy demand has gone up considerably since the pandemic ended and supply has remained constrained, so no surprise prices have more than doubled or tripled.  

Corporate ESG measures and political sentiment further dampen funding for domestic energy production and force the US to seek supplies from foreign countries that are not always friendly to our needs or will bow to our demands.

Case in point with the President's upcoming visit to Saudi Arabia in July with hat in hand to beg for more supply.  Seems a balanced approach of more domestic production, with a long term shift to cleaner energy sources like natural gas and nuclear would have been a more prudent approach driven by market fundamentals.

Electric cars and other "green energy" measures are mostly political stunts as any inquisitive person who looks at the full lifecycle of these measures understand that battery production and disposal and strip mining for lithium and rare earth metals isn't exactly green. 

Can someone making minimum wage or close really afford $5-$7 a gallon gas or purchase a new $60K+ electric car and charge it on WAPA rates or afford the huge upfront costs for solar in USVI? Over time with technology improvements perhaps the equation will shift.

All of the above is my personal opinion, so not trying to change other's minds.  We are each free to have our own beliefs and opinions within the law and I certainly respect differing points, I just don't have to agree with all of them, but open minded to logical differences. 

As to the OP, unfortunately purchasing a place on your own will be quite difficult given your present financial means, and perhaps in the near term, renting would be a better alternative in the near term until either market or your financial position improves, or be willing to further compromise to meet most of your core needs.  There are certainly small apts. within single family homes that allow cats and would be more reasonable to rent.  These aren't always advertised and will certainly take more effort to find.  Realtors, are unlikely to be much help as there is little to no money for them to make in your situation.  Wishing you best of luck to fulfill your dreams. 

 


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VIpirate
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June 28, 2022 2:32 am  

Perhaps one idea for the OP would be posting a want ad on some of the USVI social media sites in the off chance someone has a lead on an unadvertised unit.  For sure a long shot, but at least it's something you can do without being on island.  Maybe there is a caregiving or housesitting situation that might work in your case?  You'll need to be creative and willing to compromise given present conditions and your own financial situation.  best of luck. 


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speee1dy
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July 1, 2022 9:54 am  

https://www.realtor.com/realestateandhomes-search/Saint-Croix_VI/price-na-120000   here is todays houses for sale under 120 page from realtor .com 


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speee1dy
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July 1, 2022 9:55 am  

https://www.realtor.com/realestateandhomes-search/Saint-Croix_VI/price-na-120000   here i changed it to 150k and under


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rewired
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July 2, 2022 12:24 pm  

@bonnie-jean

I expanded the price on  the link @speee1dy posted to the your full budget of $150k and excluded empty lots.

https://www.realtor.com/realestateandhomes-search/Saint-Croix_VI/type-single-family-home,multi-family-home,condo,townhome/price-na-150000/pnd-hide  

It did add a few options that you might be able to make work if the areas also work for you.

Your budget will be a challenge, but if you have an income you might be able to trade up before to long.

Best of luck with your search!

 

 

 


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Knowlesstak
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July 2, 2022 1:51 pm  

The national housing market inventory in June increased by almost 20% which is a high since 2017. Looking at MLS listings here we are about the same. 

Your looking at almost $1000 more on monthly payments now than a few months ago. People who could afford a mortgage months ago can no mover afford it. Some will now have exceeded the allowed DTI % income required by banks and can longer qualify for a more expensive house. 

Inventories drive mortgage prices. The increase in inventory will drive prices lower. Simple supply and demand. 

Houses here were going under contract very fast before. That is not happening now. 


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daveb722
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July 8, 2022 7:54 am  

https://73040.sgp.homes/

Just listed 


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vicanuck
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July 8, 2022 8:42 am  
Posted by: @knowlesstak

Houses here were going under contract very fast before. That is not happening now. 

Don't expect home prices in the VI or nationally for that matter, to drop significantly. It just won't happen. Sales may slow down a bit during this little quasi-recession blip, but, demand for housing remains very strong. Rental prices especially will remain high and likely go higher. Just my opinion.


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yahmahnetwork
(@yahmahnetwork)
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July 12, 2022 7:43 am  
Posted by: @bonnie-jean

Hello- I lived and worked on St. Croix 30 years ago and was hoping to return at retirement but- I have 2 cats and cannot find any condos to allow them. I have $150,000. to spend. I know that's not much but I'm happy living simply. Are there no small houses for sale or rent at that price at all? Realtors have told me to forget it- That there is nothing in that price range. If I rent, I want a long term rental as I am older, and don't want to lose my home. Anyone? siggestions and advice would be much appreciated- I still hope to make this dream come true.  

there is, but not in that range


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harle29
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July 19, 2022 4:53 am  

@gators_mom I strongly agree with you


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jaldeborgh
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July 19, 2022 5:50 am  

@knowlesstak I’m a 50/50 seasonal resident of STX and live in the Boston area during the warmer months (we’re retired).  We also have children in the house buying phase of life so I’ve been watching the market over the past few years fairly closely.  In New England it’s fair to say the froth is now off the market.  People had been pricing things at ridiculous levels so we’re now seeing asking prices drop, often 10% or more, where sellers are only reasonably motivated.  Homes that 3 or 4 months ago would have sold in days, often for well above asking prices, are now not moving so the market seems to be reacting to the increase in interest rates and the increased likelihood of recession.  Fear is becoming a real factor for buyers and sellers alike.

It’s clear that inflation is not transitory so more rate hikes are a sure thing.  This will result in further cooling in the housing market.  Opportunistic cash buyers could easily see some attractive deals by years end as motivated sellers look to limit their downside.

l do agree that long term prices will rise, if for no other reason than inflation makes anything with intrinsic value increase in price.  STX is also still a good value (IMHO) compared to many other alternatives so buyers priced out of STJ or STT might look to STX.


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Knowlesstak
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July 19, 2022 9:32 am  

@jaldeborgh 

True words of wisdom you share. No surprise since your from the New England area.  Born in Newburyport myself!  Moved from there when I was 4 though and sadly haven’t been back.  I do remember skating on the frozen ponds on my double bladed ice skates lol.  

Always have been and die hard Patriots fan for life though.  Brady who…. We had Bledsoe and Grogan.  I went to the 85 super bowl vs those Da Bears. 

 


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jaldeborgh
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July 19, 2022 2:48 pm  

@knowlesstak We lived in Newburyport for a year, when my oldest daughter was born, then moved to West Newbury where we lived for 9 years.  My employer (for 10 years) was also in Newburyport…..small world. Two of my three daughters were born in the Newburyport hospital.

We retired to Martha’s Vineyard, where we’ve had a summer home that we built in 1994.  So I’m an island guy. 


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