Is it a Good Time to Buy a Home on Guam?
Nimitz Towers, Santa Rita (Near NBG)$1300 p/month
Nimitz Towers, Santa Rita (Near NBG)$1300 p/month
I was just reading over the latest issue of "Casa Guam" magazine. It's the best source of information on what the market is doing that I've been able to find. For the most part, it's a advertisement vehicle for real estate agents, with agent pictures splattered over most of the pages. I never really figured out the purpose of that, but that's another topic. But, there is usually a good article citing statistics for sales for the quarter.
It looks like sales are on their way up on the island, but prices have dropped a bit. Median single family home prices are in the area of $210k now, with median condo prices just short of 120k.
Enacio Condos, Tamuning $1200 p/month
There seems to be a growing number of $400k+ homes being built on Guam, particularly in the Dededo & Yigo areas. Given that the military controls the housing market, and generally speaking, the maximum amount of rent you can generate from most properties is $2450 (the OHA rate for service members E-5 and above with dependents), I'm not sure buying a property at that price to use as a rental unit is the way to go. The idea of making $100 or $200 per month from an investment of that size doesn't make sense.
In my humble opinion, I feel like the market has found it's limits. Beginning in 2006 when prices soared, landlords felt out the market by asking for higher rents and seeing what they could get. It wasn't that uncommon to find a home with an asking price of $3k per month and getting it for $2k. To put it quite plainly, they were trying to find out what they could get away with. Prices began to come back down to be more in line with the military OHA rate.
So what about those of us who pay our own rent?
Falling into this category myself, I know my way around the topic a little.
Perez Acres, Yigo $1300 p/month
A lot of people write asking about more affordable properties. There are plenty to choose from, but they just don't get the press the way the new & shiny places do. There are plenty of places for rent in the vicinity of $1000 per month, and they're quite easy to find.
You just have to realize, especially if you're coming from the mainland U.S., that standards and living conditions here are different. If you've lived in Asia before, you'll understand what I'm saying.
My solution to the high cost of rent is to buy. Even if it's an inexpensive place. I don't recommend anyone that's only going to be here for a year or two get into the $400k+ market. I just don't see how you'll get a return on your investment in a short time. Gains here will be nominal from now on, as the market as found its limits and is adjusting. In my building, I could rent a place for $1400, or pay my $800 mortgage and $250 HOA dues every month. It's easy to rent, easy to sell, and should the bottom fall out of the market, how much will I really loose?
