When I started out in real estate in 2007, it was a Buyer’s market – a Buyer’s market on steroids. The strategy was simple – lots of homes out there, lots of eager Sellers. So…offer lowballs. Lowball until a Seller grabs the ball and runs.
When the 2017 hurricanes hit the Virgin Islands, Realtors across the territory looked out their windows and gasped. We could barely traverse the roadways, let alone go on showings. Many homes had lost roofs, decking, windows, flooring, as well as less tangible qualities – charm. The winds had stripped away all the surrounding foliage, even trees. Suddenly idyllic St Thomas homes were bald and exposed, no longer the cozy tropical retreats that endeared outsiders to our Caribbean lifestyle.
Time to get a bartending job. But wait. The market was changing.
Lots of compromised homes hit the market, many-an-owner, especially in condos, were eager to beat feet and sell. A Buyer’s market, but somewhat different. More competition among Buyers. Prices not so easily slashed.
And then comes COVID.
Once again – everything is shut down. We can barely show the listings we have, let alone garner new ones. And if we are able to show, who’s going to buy?
Well – suddenly, we can’t keep up. Buyers started flooding to the Virgin Islands in pursuit of the perfect St. Thomas waterfront home with waves splashing on the shore and distant cays framing the views from every window. People with wherewithal were trading the isolation of their stateside suburban homes for the warm climate and expansive outdoor lifestyle of the Caribbean. And those with less wherewithal were buying St Thomas waterfront condos as a second home, as well as using their VI condos for rental income.
We had rocketed from a years’ long Buyer’s market into a Seller’s market. Instead of offers coming in radically lower than list price, we were seeing home after home selling for list price, and quickly. A few years later, the Seller’s market continues in the VI, but we’re slowing down. Inventory is increasing, and list prices are no longer convincing in all cases.
But, like in any market, strategy is important when it comes to purchasing the St. Thomas home you’ve been searching for. Lowballs are not going to work in this market. Some homes deserve offers that defy the list price – but bargain basement shopping, for the most part, isn’t going to work.
With the inventory of homes in St Thonas still somewhat short, especially in the below-one-million market, make your offer and make it a good one. Don’t just start low and presume there will be a back n forth volley. Come in with your best and final, or close to it. Let the Seller know you’re serious, and then if there’s a counter, hopefully the two sides are very close, and the deal can be executed. But if your offer is 30% off the market in hopes of getting to 15% – you may lose your Seller and your chance.