In This Issue:
1. Guam Real Estate Market Update: First Half 2011
2. Guam vs. Oahu YTD 2011
3. 6th MREIC Update
4. Property Previews: Industrial Space For Lease
5. Past Newsletters
6. Bonus: What’s Wrong With Guam Public Radio?
HEADLINES: OVERALL YTD SALES VOLUME UP 28% FROM 2010; GUAM MEDIAN HOUSING PRICE HITS NEW RECORD; MEDIAN SINGLE FAMILY HOUSE PRICE UP 26% FROM 2010; SINGLE FAMILY HOUSING UNITS SOLD UP 31% FROM Q1; FOREIGN INVESTMENT REMAINS LIMITED; SECOND QUARTER SALES VOLUME DOWN 37 PERCENT
Guam Real Estate Market Update: Second Quarter 2011
Activity Update – Overall year to date real estate sales activity on Guam reached over $165 million and increased by 28 percent compared with the first half of 2010. The second quarter of 2011 reflected yet another median price record for a Guam single family house at $268,000, up a remarkable 26 percent from the same period in 2010. The median price increase reflects a combination of more new homes sold, plus a rebound of activity in the high end residential sector. Second quarter single family housing unit sales reached over 150 units and reflected a sharp increase of 31 percent from the first quarter. In the condominium sector, the median price reflected $142,000 during the second quarter of 2011, up 19 percent from the year earlier period. The overall increase in mid-year sales activity occurred despite the sharp 37 percent decline in quarterly sales volume during the second quarter, due primarily to a dearth of high priced deals.
The Guam real estate market reflected islandwide sales volume at around $20 million per month during the second quarter of 2011, roughly the same transaction volume during the year earlier period. Major transaction activity was minimal during the past quarter with only one sale priced over $2.0 million during the entire three month period, highlighting extremely weak foreign investment activity. Although 2011 second quarter figures reflected only 40 percent of the peak $160 million achieved during the second quarter of 2007, sales remain roughly double the second quarter sales volume reflected during the four year period from 2000 to 2003. The impact of negative weak foreign investment reversed the three year trend of second quarter sales volume growth. Except for the market bottom in the first quarter of 2009, the latest period reflected the second weakest quarterly sales volume in five years.
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Single family housing sales have been remarkably stable with between 140 and 160 units sold quarterly, relatively consistent since mid-2003. During the second quarter, nine single family houses sold at prices above $500,000 and five condominium units sold at prices above $300,000, as the high end residential sector continues to recover from recent lows. Notably, recent land sales reflected strong unit rate prices with an Agana site achieving nearly $500 per square meter, a recent record for land outside of Tumon. There were land sales along Marine Drive, Ypao Road and even Tumon Heights Road that reflected unit rates above $300 per square meter during the second quarter of 2011.
Overall, Guam’s real estate market through the first half of 2011 remains in recovery from the anemic market conditions reflected following the financial market meltdown in 2008. The second quarter of 2011 reflected growth in several important sectors including single family dwellings sold. Although a lack of foreign investment contributed to second quarter sales volume shrinkage of 37 percent, year to date sales reflect 28 percent growth compared to 2010. Captain Real Estate expects to see a continuation of this volatile cyclical activity in the near term as lenders struggle to find buyers that qualify with stricter requirements, foreign investors remain skittish, and mixed signals continue to dominate the proposed military build-up.
Although market conditions remain tenuous, we haven’t witnessed any type of mass market exodus or explosion of foreclosure activity that caused prices to collapse in the early 2000s. Properties priced at market levels continue to sell, as evidenced by the recent Tamuning Industrial Park transaction and the growing number of high end residential sales. Sellers looking at 2007 and 2008 as price indicators may be challenged to move real estate in the near term, although the recent commencement of Mamizu funded military build-up activity, low interest rates and an extremely weak U.S. dollar lend favorably toward more optimistic projections, as well as the eventual return of foreign investment. While the short term outlook is generally weak, investors appear focused on potential mid and long term growth associated with the build-up.
Guam vs. Oahu YTD 2011
It’s always interesting to compare Guam real estate activity with Hawaii. Guam’s single family residential sales volume decline through June 2011 mirrored that of Oahu’s with a 7 percent drop compared with the same period in 2010. However, on Oahu, the median sales price declined by nearly 3 percent while Guam’s was up by 3 percent. On both Guam and Oahu, year to date condominium sales volume declined by nearly 3 percent. Condominium median sale prices were flat on Oahu during the first half of 2011, but the figure for Guam increased by more than 15 percent. A closer look at the Honolulu Board of Realtors data shows that the Oahu single family market dropped sharply during the second quarter, while Guam posted a 32 percent increase in the number of units sold. This round goes to Guam!
6th MREIC Update
The 6th Micronesian Real Estate Investment Conference has been rescheduled to Fall 2012. We are excited that market changes and economic activity will allow for substantial interest in Guam real estate in 2012. We’ll see you then!
Property Previews: Unique Industrial Spaces For Lease
For Lease
Agat Warehouse – MLS #:11-2629
10,000± square foot concrete and radva engineered warehouse next to Navy front gate on Route 2A. There is nothing in southern Guam to compare to this unique, renovated M2 zoned industrial facility. High power capabilities, new office space and secured, paved yard.
Asking $12,500 per month
For Lease
Tamuning Industrial Park Warehouse 6A – MLS #:11-3115
2,000± square foot warehouse space for lease. Prime central Tamuning location off of Pick-A-Nail Road. Gated, secured compound (former Chris Berg). New roof completed in 2002. Substantial mezzanine space, but tenant can modify interior. Warehouse 8B (MLS #: 11-3117) also available for lease at same square footage and asking price.
Asking $2,000 per month
Past Newsletters
- Captain Real Estate Newsletter – First Quarter 2011
- Captain Real Estate Newsletter – January 2011
- Captain Real Estate Newsletter – November 2010
- Captain Real Estate Newsletter – August 2010
What’s Wrong with Guam Public Radio?
If you’re a fan of KPRG, have you wondered why you no longer hear Captain Real Estate Group as an underwriter? What’s wrong with Guam Public Radio? A lack of transparency is a good place to start. After all, how motivated would members be if they knew that every penny of their donations went to pay the General Managers salary and benefits? How motivated would members and underwriters be if they knew that the annual management expense exploded from $30,000 in 2005 to over $100,000 today. Members don’t know that the General Manager’s salary has doubled while simultaneously benefiting from a full time Assistant GM and paid leave of nearly three months this year. Transparency problems are equally rampant in the black hole of Development where even the published materials exclude time blocks for underwriter spots. If you’re a friend of management, you get the prime time slots, even if that means listeners are blasted with the same commercials at the same time 365 days a year. If you’re not a friend of management, you might donate the same amount but get stuck with a time slot where no one knows you even exist. The lack of transparency is just one of the serious problems that threaten the future of Guam Public Radio … to be continued…
Sincerely,
Nick Captain
President
