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.
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.
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.