Recent news, Oil Refining On St. Croix To Restart As Senators Ratify Landmark Agreement, projects the creation of major job opportunities on island. An Agreement between the USVI Government and Limetree Bay Terminals, Bill No. 32-0246, was announced in early June, and the Senate voted to approve a ratification of the agreement at the end of July. The south shore refinery is scheduled again be operational. The company plans a $1.4 billion investment to upgrade and restart the idle refinery.
The St. Croix Economy
Hovensa was once one of the largest refiners in the Western Hemisphere, but closed in 2012. As can be expected when a major employer closes its doors, there was an effect on the economy. So what might we experience given the project continues as planned?
- Almost immediately, an estimated 1,300 temporary construction jobs, plus upper management, will have workers and their families seeking housing, contributing to the economy through daily life spending, and will likely have discretionary money to spend on entertainment. Groceries, retailers, rental properties, restaurants, and entertainment should feel an increase in business.
- Then as the facility starts operations, housing needs may transition from renting to more permanent home purchases by some of the estimated 700 full-time employees.
Local business owners and employees should experience the direct impact of more consumers, spending more money. As the rising tide lifts all boats, this project could benefit not only refinery employees and families, but the overall economy and other residents, making a home purchase within reach.
The St. Croix Real Estate Market
Amy Land-de Wilde, Coldwell Banker St. Croix Realty Regional President and Managing Broker says, “The immediate rental market will be active, and I think that home-buying will be more drawn out. Bearing in mind rentals happen immediately where real estate closings normally have a 45-day (cash transaction) to 90-day (financing) closing time-frame.”
So, will this project affect real estate inventory, prices, and time on the market? Amy believes it will. She further explains, “After the temporary workers transition to full-time refinery employees, I believe we will start to see interest from those people perhaps transitioning from rental to purchase and trade-up homes. Coupled with our already tight home and condo inventory, it should help drive prices up and days on market down.”
MashVisor, real estate investment data analysts, agrees. “The US Housing market is directly connected to the economy. But does the well being of the US economy and job growth have an effect on the purchasing power of real estate customers? The answer is a resounding yes.”
So what advice does Coldwell Banker have for home buyers and sellers during a potentially pivotal time like this?
Real estate upticks don’t last forever. For Buyers, understand that when inventory is reduced, prices may start to rise. Don’t make offers as you might in a solid Buyer’s market as you might lose the property and have to pay more the next go-round. For Sellers, don’t hold out for the last dollar. Any number of factors, local and stateside can impact our market at any time and we’ve seen these cycles in the past.
Read in-depth discussions about the agreement in The Virgin Islands Consortium and The St. Croix Source.