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US Virgin Islands experienced tremendous growth from 1997-2007 — with home prices more than doubling — but that run has come to an end. In 2008, property prices and sales dropped sharply on St John and St Thomas, because about 80% of foreign property buyers in the territory come from the US, where the contagious global crisis started.

In St Croix, the average home sales price rose 9.9% to US $511,532 in 2008 from a year ago, based on Coldwell Banker St Croix data. However, the condo market has been badly affected by the crisis, with average price falling 18.8% to US $217,196 in 2008.

The first quarter of 2009 shows a continued downward trend in property prices and sales in USVI. This contrasts sharply with strong house price increases over the past decade. Property sales on St Croix 50.4% in 2008 compared to a year earlier, to 139 units.

The economy of the US Virgin Islands is largely dependent on tourism, which generates about 80% of GDP. There were about 2.4 million tourist arrivals in 2008, down 6.7% from more than 2.6 million a year earlier. Around 679,000 tourists stayed-over in the islands in 2008.

There is a very limited supply of long-term private rental properties in US Virgin Islands, since most landlords choose to cater to short-term wealthy vacationers and holiday makers. Most rental apartments are located in St Thomas and St Croix. One-bedroom apartments in the islands rent for about US $1,000 to US $1,800 per month. On the upper-end market, three to four-bedroom beach houses cost from US $3,500 to US $7,000 per month.

Contact our Coldwell Banker offices in St Croix for details.

(Source: Global Property Guide via NuWireInvestor)