Guam’s real estate industry seems to be faring better than most in the midst of the pandemic. The question is, how long will that trend continue?
Although the real estate market hasn’t escaped the effects of the pandemic, the Guam Association of Realtors president Clare Delgado says the industry is still seeing plenty of activity.
Much of that is leftover transactions from before the public health emergency.
“The activity is there. When we were allowed to go back to work back in May, there were a lot of closings that didn’t happen because of our industry being shut down. So the minute that we did start going back to work, things kind of took off a little bit because there was so much that was being held back,” Delgado said.
Delgado says new property listings are still being added online and the military and investor markets have been steady
“The strongest market that we do have, from what I see, has been the VA buyers. They’re able to purchase with zero down, so that’s been a pretty dominant type of purchase that we’ve seen. And then also we do see some investor cash purchases to turn it into rental income. And that’s another thing also, is that people are looking for investment properties, but there’s a shortage of that as well,” Delgado said.
In spite of this, the industry still faces some challenges.
A shortage of houses in the market has caused an increase in median prices.
So has the labor shortage and rising costs of materials.
“When someone wants to buy investment property for income, they’re going to be looking at margins. Currently, renting to a higher paying tenant – which in most cases are the military service members – is where you see a lot of the shift. Because again, the margins are higher on that,” Delgado said.
Even before the pandemic, Delgado says, developers were building more and more high-end homes in the hopes of better profit margins.
As the pandemic continues, the real estate industry – like every other industry – faces more questions than answers when it comes to the future.
“We don’t know how long this pandemic is going to last. We don’t know if stimulus money, how long that’s going to last either. So, in my opinion, there are still a lot of uncertainties. So we don’t know. It’s wait and see,” Delgado said.