Oct. 22, 2002 – If you're a working stiff and you don't get your piece of the St. John rock within the next year to year and a half, you may be permanently out of the running, St. John businessman Winston Bennett said Tuesday.
Bennett was speaking at a Tuesday seminar he put together at the Paradiso restaurant to enlighten local residents about the St. John real estate picture. Representatives of the island's two lending institutions, Bank of Nova Scotia and FirstBank, were on hand to help the 30 residents who attended the meeting learn about getting a mortgage.
If you're a buyer, the real estate picture is daunting. Marty Beechler, president-elect of the St. John Board of Realtors, said the supply of real property is diminishing and the price is escalating at a rapid rate. In December 2000, he said, there were 79 parcels of St. John land for sale under $100,000. In December 2001, the number was down to 55, and today there are 16 parcels on the market priced under $100,000. And that's just the land.
As far as housing, Beechler said, in December 2000, there were 64 homes listed for sale on St. John, 15 of them priced under $500,000. A year later, there were 53 for sale with a dozen of them priced under $500,000. Today, there are 37 houses on the market, with five priced under $500,000.
Beechler distributed a list of available land. The least-expensive parcel was $46,000, for a bit more than a quarter of an acre in Glucksberg. Listings aside, Bennett said the cheapest house on the market will run $595,000.
Bennett urged residents to beg and borrow from their relatives and friends to buy real estate, any real estate they can afford. He said even if the property you can afford doesn't have your dream view or location, it will provide a foot in the door. "The most important thing is to buy a place at the table," he said.
He predicted that construction costs will keep pace with inflation, but the cost of land will rise more quickly.
Beechler said home and land owners are not putting their holdings on the market now because poor stock market conditions don't offer them a better place to put their money to work.
Bennett, a member of the V.I. Banking Board, said that without some solution to St. John's housing crunch, he will be unable to find skilled professional people to work at his four tony restaurants. "The quality of our employees will start to diminish, because the more professional you are, the less you are willing to live in substandard conditions," he said.
Renters are paying $700 to $800 a month for apartments of 300 square feet, he said, and many units previously rented long term are now in the short-term market, further reducing the supply for permanent residents.
On the plus side, Bennett noted, most St. John homes include a rental apartment. If more people could get into home ownership, it would increase the number of apartments available by freeing up those where the potential homeowners now live. "The impact of putting 40 rental units on St. John would be tremendous," he said.
The bankers said they want to lend residents money to buy and build homes. However, borrowers must have good credit, which means paying off outstanding loans before applying for a mortgage, they said. And potential borrowers should get to know their banker.
"Don't wait until you need money to walk into a bank," said John McDonald, a vice president at FirstBank.
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