In This Issue:
1. Guam Real Estate Market Update: First Quarter 2011
2. Featured Article: Freddie and Fannie
3. Property Previews: A Buyer’s Market
4. Past Newsletters
HEADLINES: Median House Price Soars to New High; Increasingly Strict Lending Guidelines Contribute To Decline in House Sales; Overall Real Estate Sales Volume Rebound Includes Former Okura Hotel; Inventory of Vacant Housing Units Questioned
Guam Real Estate Market Update: First Quarter 2011
Activity Update – Mixed signals dominate the housing sector as the median price of a Guam single family home soared 18 percent from a year earlier to $260,000, pushing the affordability index into increasingly unaffordable levels. The Guam median home price is now 53 percent higher than the national average of $170,000. The median price has doubled during the past decade, “…partially due to market recovery and partially due to a change in product mix”, according to Captain Real Estate Group President Nick Captain. The median price increase occurred as transaction activity has slowed significantly with only 118 units closing during the first quarter of 2011, reflecting the slowest pace in 8 years (except for 113 units sold during peak of financial crisis in Q1 2009). Stricter lending guidelines are one factor contributing to what could be Guam’s first major housing crisis in 20 years as federal regulators have proposed rules that will likely boost interest rates and fees on many low-down payment loans. Families looking to enter Guam’s homeownership market have also been recently hit by massive utility connection fees and increasing utility costs, further eroding the ability to pay mortgage costs. As housing costs soar, the inventory of vacant housing becomes an increasingly critical component of projecting future demand. However, while GHURA’s recently completed $350,000 Comprehensive Housing Study estimates vacant housing units at 9,125 (2009), the federal government’s recent free estimate reflects 2,800 units, a difference of over 300 percent.
As the number of housing units sold declines, the inventory of unsold units is increasing to unhealthy levels. Based on Q1 2011 sales volume and a Multiple Listing Service capture rate of approximately 40 percent, the inventory of unsold homes on Guam reflects nearly 15 months, compared to just 6 months on Oahu.
Condominium sales volume during the first quarter of 2011 surged to nearly $13 million. This past quarter included 9 units sold at prices above $500,000, as the high-end market continues its recovery from the recent lows in 2009. The condominium sector has been reflecting less volatility due to increasing investor confidence in Guam’s economic future.
During the first quarter of 2011, overall quarterly real estate sales volume on Guam exceeded $100 million for only the second time since mid 2008, and quarterly islandwide sales volume reflected 60 percent growth from a year earlier. The sales volume was boosted by the closing of the former Hotel Okura property in Tumon, which sold at a price over $20 million. Future aggregate sales volume figures are likely to be impacted by foreign investment trends, which have been rebounding primarily due to progress on the military build-up. However, the impact of the triple disasters in Japan on Guam’s real estate market remain unclear.
Featured Articles: Freddie and Fannie
Freddie and Fanny Make Home Loans Harder to Get – Click To View Article
Property Previews: A Buyer’s Market
For Sale
Days Inn Airport South – MLS #:10-2556
Reduced! Price reduced to only $100 per square foot! Unique opportunity to invest in renovated, 66 room national brand hotel. Includes franchise agreement and all furniture, fixtures and equipment. Creative alternative uses invited. Room count includes 2 Penthouses amd 7 suites. Rooftop swimming pool.
Asking $4,100,000
For Lease
Leopalace Resort – MLS #:10-3776
Condominium units at Leopalace Resort now available for lease for the first time. One to three bedrooms, furnished and unfurnished units available.
Asking $1,500 to $4,500 per month.
For Sale
Talofofo Oceanfront Land – MLS #:11-1334
Oceanfront land on Talofofo Bay. New A-frame house nearby. Prime residential lot over 2,000 square meters. Build your vacation home here after the boom.
Asking $229,000 $199,000 (Reduced!)
For Sale
Yigo Land (20,235± square meters)- MLS #:10-3611
Prime Marine Corps Drive location between the population center of Dededo and the Front Gate to Anderson Air Force Base, just south of Ace Hardware and former Yigo Amusement Park, Municipality of Yigo.
Asking $3,200,000 $2,529,375 (Reduced!)
Sincerely,
Nick Captain
President
