I just got off the phone with Chris, one of my Virgin Island real estate colleagues based in St. Thomas. My call to him was because of some friends arriving on-island tomorrow and I wanted to get a first hand report on the weather. ( It is 89 degrees with light winds and the water temperature is close to 80 degrees.) As our discussion progressed we got into the topic of how Hurricane Season in the Virgin Islands effects real estate sales and prices. (July through October).
Some background on my 30+ years experiencing the Caribbean during July through October may help. I am very fortunate to have never had an experience with a hurricane while on-island in the Virgin Islands. Now, that is not to say that they are not extremely dangerous acts of Nature to be highly respected, but I have never been afraid of them. You usually get a week or more of advanced notice, so you can make a decision to get off-island or batten down the hatches and wait it out. I am much more fearful of earthquakes than hurricanes, but my wife will not be on-island during these months because of her extreme fear of hurricanes.
The last BIG ONE that hit the Virgin Islands was Hurricane Hugo in September 1989 – a Category 4 when it hit. It created a real mess in the Virgin Islands with six deaths. The total damage in the Virgin Islands was approximately $3 billion. When there is such a disaster as Hugo in the islands, it leaves a very big impression in the minds of people who own Caribbean real estate, and on people who are thinking of buying real estate in the islands. One of their thoughts is, “Oh my God, what if I had owned property there? What a mess I would be in.” There are no guarantees, but the Virgin Islands are not typically in the major hurricane paths. However, a hurricane will hit the Virgin Islands again – just like an earthquake will hit San Francisco again.
Chris was off-island for a few weeks in August this year, and when he heard about (Caribbean Hurricane Network) Hurricane Dean forming up around the St. Lucia region he hurried back to St. Thomas to see if he needed to batten down the hatches at his house and find a safe harbor for his boat. Hurricane Dean created a mess in the middle of the Caribbean island chain, but it wasn’t a Hugo. However, Hurricane Felix is just moving through Central America and this one could be catastrophic, not because of the high winds, but because of intense rains that are falling.
Now, back to the “opportunity” – making lemonade out of lemons. If your mind set is OK about living in a region of the world with the possibility of hurricanes, then the time to buy is during hurricane season – July through October, and obviously after a hurricane. During my discussion with Chris today, he was talking about the amount of real estate inventory that is currently on the market in St. Thomas, and how slow the market is because so many of the people who visit the islands come after October and leave in June. What that tells me is that it is time to BUY! Opportunity is knocking for those savvy international buyers/investors.
What better opportunity to negotiate a favorable price and terms with a Seller than when there is a very large inventory of properties and a very small Buyer pool. Not only do investors have an advantage, but the Buyer who is interested in purchasing a home or townhome on-island for their visits throughout the year is also in a great negotiation position.
The prices in today’s real estate market in the U.S. Virgin Islands range from $300,000 condos to $4 million and higher priced estates overlooking the Straits Of Sir Francis Drake. So, whatever price range you may be in, you will find many properties to choose from during this annual “slow time” in the Caribbean real estate market. Again, I would rather deal with a hurricane than an earthquake, but some have said I am a bit peculiar. Let me know about your experiences during July through October in the Caribbean. Until next time…