2023 St. John Real Estate Wrap Up

As St. John celebrated Old Year’s Night as it is called here in the Virgin Islands, we took some time after the festivities to run the year-end numbers.  I always like to wait until the very end to make sure we capture any of the last-minute closings.  We have a house under contract scheduled to close tomorrow as we speak, but that data will have to wait until next year.  

View fullsize

Sales remained strong overall in 2023 with almost $120 million in total volume market-wide on St. John!  The average home price bolstered a 13% jump from the previous year, and the marketplace of actively listed homes is following that trend.

View fullsize

Land sales dipped, not only in total sales, but also in average price, which was down 19%. While the decline in land sales and uptick in home values are likely a reflection of the higher costs of construction, new home builds are very busy island-wide with some stunners expected to complete in 2024. 

Cliffhanger - 3 Bed 4 Bath - $1,699,000

Secret Seashell - 3 Bed 3.5 Bath - $2,100,000

As I processed all the numbers, the data point that seems most significant to discuss is the stability of the marketplace.  Looking back 21 years (the complete history of the digital MLS on island), we have certainly seen a few dips and climbs, but ultimately the market is dependably stable. When I look at median sales prices, rather than average, to get the truest feel of value trends, the median home price increased 58% over the last 21 years. An average 2.75% year over year.  What gives me confidence in the market is that this is not too high and not too low.  It slightly outpaces the national average of 2%.  I use this number to forecast appreciation and see what you could expect 10 or 20 years into the future. 

At 2.75% annual non-compounding growth, if you purchased the average-priced home on St John in 2023 for $1.7 million, you could reasonably expect it to be worth $2.17 million in 10 years. 

When I run that home through a proforma including conservative vacation rental income and all expenses of owning a home you are looking at a capital gain of $830,000 or a 62% return on your investment.  A 6.2% annual return on your cash is pretty hard to beat when you take into account that you would also be able to enjoy 8-10 weeks a year at your new Caribbean home. 

Want to talk about it deeper?  Give us a call at 340-626-8229 or schedule a virtual or in person showing of your favorite listings.

2022 Real Estate Year in Review

The market remains healthy after a busy year in 2022.

With 2021 flexing as the biggest year in real estate on St John, we wondered how 2022 might do.  Turns out, the market remains healthy and 2022 carried on the steady stable trend we have seen for decades on St John.   While 2021 was likely an anomaly year seeing 117 closings at a higher average price, 2022 turned out to be the 2nd highest on record.  Seventy-nine homes sold on St John in 2022 with an average price of $1.55 Million.  If any of you have had a chance to talk with me about the St John real estate market, one thing I have consistently advised on is that the factors here produce a dependably steady and stable market.  We are not subject to huge upswings or down turns like the volatility you see in many markets in the United States.  If you look at the trend curves they are nearly straight lines.

View fullsize

View fullsize

View fullsize

This stability is due to, but not limited to, a couple of unique things on St. John:

1.     The Virgin Islands National Park being the biggest land holder and therefore protecting the natural beauty of the island from over development.

2.     The fact that our market is not under any pressure for people who HAVE to buy or HAVE to sell.

3.     The undeniably strong demand for travel to St John as one of the top tropical destinations in the world year after year.  We were surprised to find that 2022 was somehow able to beat out 2021 in short term rental income, but it did so handily with our owners enjoying the extra income while still coming to visit their lovely homes during prime weeks.

In investing, what you want is steady slow growth.  Of course, it’s lovely to hit the jackpot and cash in on quick gains, but long term is the best way to look at real estate investing and the long look on St John is predictably bright (and sunny).

We discussed homes above, but the land market did not care about 2021’s banner year and just went ahead and beat it.  I expect to see a lot of new gorgeous homes built in the next 24 months.  Check out this amazing lot we have listed with views over the dramatic Reef Bay Valley and to the North over Maho Bay!

We have a few select weeks left for winter and summer 2023 and next winter 2024 are filling up fast.

Check out our diverse inventory of stunning vacation rentals on St John and book your next stay with us easily online with just a few clicks.

View fullsize

View fullsize

View fullsize

View fullsize

St John Vacation Rentals vs St John Long Term Rentals

The Enduring Strength of the St John Rental Market

Even as the economic roller coaster permeates real estate and financial markets globally, here on St John, the real estate rental market refuses to burst.  Both long and short term rentals on island continue to command high prices in what seems to be a reflection of the steady stream of demand and extreme shortage of supply. 

View fullsize

Gorgeous St John Rentals are in high demand, both for short and long term.  This stunning short term rental has sold out for Nov - June for the last 10 years.   

Short term rental villas have solidified their position in vacation accommodations on St John.  Even with as many as 900 properties available for weekly vacation rentals on island, occupancy for this season was strong and projections for next season are strong from a poll of booking agents and owners, with most properties already booking up or nearly sold out for the 2017 high season.  With short term vacation rentals, owners who have good property management can expect nearly 100% occupancy for Nov 1 - May 1.  And it does not turn off like a switch.  The summer months can see as high as 80% occupancy on average for June and July.  August and November average at about 50% occupancy.  It is no wonder that investing in real estate on St John has it's advantages.  The short term market provides a viable stream of income to the owners who also want occasional use of their homes and can be the best option for owners who want their home professionally maintained and cleaned weekly. 

View fullsize

Getting a long term rental with a view like this isn't cheap.  Many simple homes such as this rent for as much as $2000/month for a one bedroom apartment with a year lease.

Long term rentals are difficult to come by.  The extremely high demand, coupled with the limited inventory have set monthly lease rates (on year long leases) to an average of $1800 for a one bedroom apartment plus utilities.  Furnished apartments go for even more.  With rates this high, many owners have built small apartments below their homes or on their properties to capitalize on the additional income stream.  Some have developed small apartment buildings or condos on vacant lots to target this lucrative market. 

All in all, owners and buyers can take comfort in the fact that properties on St John can and will continue to provide real income from rent, be it year leases or weekly guests.  Get in touch with me if you would like to further discuss the rental possibilities of properties here on St John.