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St. John Real Estate Market Flattening Out

Aug. 27, 2006 – The St. John real estate market has slowed, but sales on St. Thomas and St. Croix are holding their own, area real estate agents said.
Diana Beam, who owns Re/Max Island Paradise Realty on St. John, said that statistics show that sales are down by 24 percent, while the average sales prices has dropped by only 10 percent.
She said the number of properties for sale is up by 21 percent over last year this time.
Beam said currently, St. John has 108 houses, 41 condominiums and 262 land parcels for sale.
She and others said that St. John's prices skyrocketed in last year's "feeding frenzy" but are now becoming more realistic. "They've leveling out," Beam said.
Century 21 Realtor Rosemary Sauter, who has offices on St. John and St. Thomas, said that she sees two factors combined to cause the decline in the St. John market.
She said prices were too high and the word got out about last fall's racial upheaval centered around the alleged rape of St. Johnian Esther Frett. Federal officials still have not released information about its investigation into the case.
Sauter said the St. John real estate business began to slip at around that time.
She said that St. John prices rose extremely fast in the past few years.
"Some of the properties doubled and tripled in value," she said.
However, she said that some property values have dropped as much as 20 to 25 percent.
St. John surveyor Greg Miller said speculators bought land in anticipation that the prices would rise, which he said slowed down the real estate market.
Nick Bailey at John Foster Real Estate on St. Thomas said that because 90 to 95 percent of St. John's real estate sales are to people who put the houses into the vacation villa market, such purchases aren't essential.
By comparison, he said that only half of St. Thomas sales are villas in the short-term rental market, so the island's sales are still robust.
"We're satisfied with the activity," he said.
He said that he's seen a slowdown this summer, but added that he sees a return to the normal seasonal variations in the real estate market.
Bailey said that during the winter, the hotels are filled with wealthier buyers looking for second homes. This helps fuel real estate sales.
He said that between 2003 and 2005, when the territory's Economic Development Commission program had many EDC beneficiaries looking for houses, the market was busy year round.
Things look good on St. Croix, Four Star Real Estate's Ivan Minarik said.
He said that real estate on St. Croix languished for years because it had nothing to attract buyers. He said St. John has the national park and St. Thomas had a busy economy with lots of jobs fueled by the large number of cruise ship passengers arriving.
"One day a year and a half ago, people woke up and realized they could buy a lot on the ocean in St. Croix for 15 percent of the price on St. John," he said.
He said the demand for real estate on St. Croix is high because Hovensa periodically brings in contractors that need rooms, and several tourism projects are in the works. Minarik said that the companies developing those projects need rooms for off-island employees as their projects gear up.
Minarik said that except for the small project at Carden Beach, no condos went up on St. Croix since the 1980s, which further fuels St. Croix's real estate shortage.
"If you have a $500,000 house, you have 20 people who want to buy it," he said.
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