Dear Source:
The flexmls or mls as it is called, is a database that is on the Internet that lists all the homes for sale in the Virgin Islands. You can see the sales prices, where the homes are located, descriptions, and in many cases photos. The flexmls can be accessed from most of the Virgin Islands Real Estate agents websites. The flexmls can be accessed by each island and selections are by residences, condos, land, and commercial. The figures at the bottom of my letter are based on all the residences that are for sale on each of the islands. I have not included condos, land, or commercial.
The total Virgin Islands homes on the flexmls for sale, all islands combined are 438 homes valued at $564,144,772.00. 70% of all Virgin Islands homes for sale are over half a million dollars. 38% of all Virgin Islands homes for sale are over a million dollars. I have broken down the actual information off the flexmls per island. Anyone can access this information online themselves. I find it mind boggling to think our Virgin Islands have more than half a billion dollars in homes for sale and yet so many of us locals don't and still can't afford to own a home.
I have been watching the flexmls for last 3 years and have noticed that there are more and more high dollar homes that have been listed and have been sitting unsold for quite a long time. I have also concluded from watching the flexmls that the price of homes make it more impossible for the average local to buy as well as is a definite concern for the property tax revaluations. Quite a number of these homes are not worth the money they are asking for from a construction quality standpoint. I based that comment on 20 plus years of being in the construction industry.
We need to be concerned about the way real estate market is being operated, the way property is appraised, conditions and quality of properties. Views should not be the main factor on the value of a home, quality of construction should be. We need to be concerned about all of it before it gets to the point, none of us can afford to live here any longer. For anyone looking at the majority of photos on these homes will notice many focus on pictures of the views more than the actual photos of the details of the homes. Any person who takes the time to look at photos onthe stateside mls of homes that range in these same prices would also noticed a very marked difference in many cases of what is actually being offered in quality. Many of those homes are not based on views for sale but on quality of what is offered in the home itself.
I have also noticed that the majority of real estate agents are not locals but people who have moved here over the years. They may have driven the market up high based on the way real estate is handled elsewhere not taking into account the effect it could have on a small isolated community as our islands are over time. I believe in the past few years this is the first time they are finding themselves with many homes that are not selling and I do believe it is due to the high prices that does not match the actual quality of the home.
As you look at this information, keep in mind that minimum wage $5.15 times 2080 hrs (1yr) is $10,712.00 before taxes. A person would have to make more than triple the minimum wage in order to afford a lower end home on top of other costs of living. The Legislature had difficulty on approving a dollar raise to the minimum wage. Not only would the wage have to triple, but they would also have to move to St. Croix in order to have more buying options within an affordable price range.
The average local person has the right to be concerned a neighbor's million dollar home which they could never afford to build themselves could very much affect the taxes of the neighborhood, especially when the value of the home is based on the view instead of the quality of the home.
There are other concerns as well that the real estate market has on the community. Buying a home at these prices is out of reach for many locals. The high cost of buying land and building is also becoming harder and harder too. It is no wonder we have a brain drain of our young people. They have difficulty being paid for the education they received and do not have the options of hoping to start a family, own a home of their choosing in the area they would like, as much as they could find elsewhere. We wonder why so many have not surpassed being dependent on government housing and assistance? The answer is simple. Many can't afford to step out of the dependency because they can't afford the homes on the market. What happens when a large sector of the community can't even dare to dream of owning a home?
For the average locals that do own a home, they already have the concern of property taxes and insurance being too high. When the costs of these practically equal what it would cost to rent a home, one has to wonder why own a home and have the additional costs of repairs etc. What affect does all of this have on retirees? Many can't opt to retire because of high bills they have to keep paying for on their homes with the other costs of living.
We need to take a hard look at everything concerning properties not only property taxes because the affects it has on the community are multi-fold. From the figures below, St. John locals more than have a right to attempt getting their voices heard about the real estate problems on their island. St. Thomas is following right behind on the high cost. If this all keeps up St Croix will eventually be in the same position as we are in.
211 homes on St. Croix for sale combined value – $175,734,635.00
54 homes under $300,000.00
44 homes between $300,001.00 and $500,000.00
69 homes between $500,001.00 and $1,000,000.00
44 homes over $1,000,000.00
107 homes on St. Thomas for sale combined value – $119,419,339.00
6 homes under $300,000.00
20 homes between $300,001.00 and $500,000.00
45 homes between $500,001.00 and $1,000,000.00
36 homes over $1,000,000.00
120 homes on St. John for sale combined value – $268,990,798.00
No homes under $300,000.00
6 homes between $300,001.00 and $500,000.00
27 homes between $500,001.00 and $1,000,000.00
87 homes over $1,000,000.00
If value was distributed equally for each home per island (this is not fact, its based on an "if")
St. Croix – $175,734,635.00 divided by 211 = $832,865
St. Thomas – $119,419,339.00 divided by 107 = $1,116,068
St. John – $268,990,798.00 divided by 120 = $2,241,589
All islands combined – $564,144,722.00 divided by 438 homes = $1,288,001
According to the mortgage calculator on the flexmls, with 20% down, and 8% interest for a 30 yr mortgage:
Payments on a $300,000.00 home shows at $1,761.00 a month
Payments on a $500,000.00 home shows at $2,935.00 a month
Payments on a $1,000,000.00 home shows at $5,870.00 a month
$1,761.00 times 12 months = $21,132.00
$2,935.00 times 12 months = $35,220.00
$5,870.00 times 12 months = $70,440.00
Keep in mind, the cost of living here, the minimum wage payroll is $10, 712.00 before taxes a year and these mortgage calculations are including having 20% down first. On top of that if a mortgage payment on a $300,000.00 home at the rates that come up on the mortgage calculator is $21,132.00 a year times 30 years totals $633,960.00. My next question would be, "Are the lenders really making $333,960.00 profit on a $300,000.00 home?
If so I would have to agree with Mr. Magbie's letters comment of "Gosh when the bankers and the realtors where having their way and the property values were going up, all the pigs were at the trough developing and selling, developing and selling etc." If lenders are really making these kinds of profits it would help explain why for such a small community we have so many banks on our islands, it would be very profitable business.
The only thing Mr. Magbie doesn't know is that the majority of those at the trough were and are not locals or your aver
age low or middle class from the states flipping homes like you see in the states, most were and are those who came with the money to afford to get into the market and make more monies off it. There is not a flipping market in these islands like there is on the mainland.
While some may think the million dollar homes not selling is a problem, it not an entire loss for most of those owners, many have these homes listed as "villa vacations rentals" in which they charge thousands per week to tourists to rent them.
Carol Berry
St. Thomas
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