Guam – It’s a home seller’s market on Guam and could be for the next few years. While housing prices may be on the rise, the President of the National Association of Realtors and her former president father just paid Guam a visit to assure homebuyers they’re in good hands in the hunt for an affordable place to live.
“The market is transitioning. It started a few years ago…from a buyer’s market to a seller’s market, and inventory and supply has been going down fairly steadily the last couple years,” Chris Felix told media gathered at Hyatt Regency on Oct. 15. Felix is the President of the Guam Association of Realtors and the Principal Broker of Century 21 Realty Management in Tamuning.
“Unfortunately what that means is prices are going up. And because of the military buildup and because of Guam’s positioning and our economy, we expect that to continue at least over the next three to four years. We are expecting prices to continue to rise, especially in the residential market, in the housing market, the condominium market, and the multifamily market.”
So, how bad is it? The local deficit of affordable labor and the high cost of utility hookups means a new three-bedroom, two-bathroom home is going to cost you upwards of $350,000. Plunk down 20%, add a 30-year fixed rate of six percent, and you’re looking at almost $1700 in monthly mortgage payments, totaling over $600,000 dollars over three decades.
New 3BR home
30-year payoff: $604,346.40
The result? A lot of hardworking folks are priced out of the market or need to lower their expectations and consider older homes and renovations, smaller homes, and fixer-uppers if they want to buy now.
But, as the market shifts, it may be reassuring to know that the top brass at the National Association of Realtors cares enough to reassure homebuyers they’re in good hands with sales agents who are members of the Guam Association of Realtors.
“It was important to come out and visit the Realtors in the area who are committed to advocacy for homeownership, for property rights, and also for the profession,” said Elizabeth Mendenhall.
“The Guam Association of Realtors is just doing a really great job servicing their buyers and sellers and making for a much more orderly real estate market for all of Guam, and I appreciate the visit extremely,” said Richard Mendenhall, former President of NAR and Elizabeth’s father.
Although the vicissitudes of Guam’s economy are tied more directly to events in Asia than the US mainland, the Mendenhalls tell Guam residents they’re feeling the effects of a burgeoning housing bubble in the lower 48, too.
“There’s a lot of parallels in Missouri, where we come from,” Richard Mendenhall said. “We’re midway between St. Louis and Kansas City. We have a shortage also of housing—it’s pretty much all across the country. So, it’s not just Guam. The US is [shy of housing] for different reasons, probably, but it’s something all buyers and sellers are having to deal with now.”
“Definitely the cost of housing [is] continuing to [increase] with the many multiple events, natural disasters that we’re continuing to see,” Elizabeth Mendenhall said. “It’s affecting the cost of construction, housing, workforce, and that’s not changing. It doesn’t appear to be changing anytime soon.”
So, if you’re hungry for upshots and silver linings, consider some of the other critical influences pushing home prices up…
Real Estate Pricing Factors:
- Visitor industry diversification
- Steady military buildup
- Asian spending power
…the incremental rebounding and diversification of the visitor industry, a slow but steady military buildup, and the considerable spending power of neighboring Asian economies.
With Guam’s gubernatorial election less than two weeks away, the incoming administration will soon be in a fresh position to set a new direction in affordable home construction and house buying. This, while leveraging federal, regional, and local initiatives to spur win-win investments, nurture sustainable development, and kindle the kind of job growth that spells rewarding careers, spending power, and the circulation of more money right here on island.
The National Association of Realtors enjoys a thriving membership of 1.3 million. And 450 of those Realtors work right here on Guam.
Are there enough Realtors on Guam? Half in jest, Felix expresses mixed feelings.
“Um, you know, we hope there will be. One part of me says that. The other part says there’s too much already,” the veteran broker laughed. He’s been selling real estate on Guam since the mid-1970’s
“But, honestly, I think the Mendenhalls come from a city about the size of Guam: 170,000.
“You have 500?” he asked his guests. “Six hundred members — so obviously, there is room [to grow on Guam]. We have the same population, pretty much the same everything else, and they have 600 members, we have 450. There is room for more.
“I think what’s more important is to get the existing licensed real estate agents who are not Realtors to [come] and join our organization and follow our Code of Ethics and the way we do business here on Guam. And that’s our real hope over the years to come— is to get more of the licensed people who are not members, to join.”
“In the states, we’re at the lowest unemployment we’ve seen in decades, but yet our Realtor population is climbing,” Elizabeth Mendenhall said. “But I think a lot of that [is due to the fact that people] see it as a second career, which is an avenue for Realtors.”
“Here in Guam also we anticipate that,” Felix said. “We anticipate that as the Baby Boomers, as the island ages, that we’ll see that as more of a second career. It’s an ideal career as a second career.”
With so much to agree on, the mutual admiration was evident at the meet-and-greet with island reporters in mid-October.
“I just can’t tell you, again, what an honor it is to have these two people here,” Felix said. “It’s not only the position of being president and the past president of the association, but personally getting to know them for the past two days. I’m sad to see them leave, I really am. And, fortunately I’ll be seeing them again at a meeting in Boston in about two weeks,” Felix told reporters early last week. “I’ll be seeing them there, and we will continue our friendship and our relationship.”
“It must just sound like I’m blowin’ smoke at you, but I’m not,” Richard Mendenhall said. “I—both Liz and I—have been all over the continental United States, all over the world. I’ve never been greeted so gracefully and friendly as I have in Guam. And I’m not just saying that. It was so extraordinarily special that it’s just hard to describe. Everywhere I’ve went, the people I’ve met…everybody was so friendly, so open to us. And I very much appreciate that.”
Mr. Mendenhall said he visited Guam for the first time 50 years ago in the summer of 1968 during a fuel stop on his return from Vietnam and that it’s been a “major honor returning.” He said he really enjoyed touring the island with Felix, especially since the longtime local broker is so knowledgeable about Guam.
This was Ms. Mendenhall’s first visit.
“Not having been here before, we didn’t know what to expect. This island is beautiful. It’s a remarkable piece of land to protect and admire…and enjoy. And the people here have just been so warm, and we can’t thank you enough for your hospitality. And Peggy and the entire association, it makes us so proud to know the work you’re doing on this island and it makes me proud of everything that you’re doing.”
*Note: the Peggy whom Ms. Mendenhall refers to is Peggy Araullo Llagas, CEO of the Guam Association of Realtors.