Real Estate up as Guam buildup nears

Real estate sales up 55%

BY GAYNOR DUMAT-OL DALENO • PACIFIC DAILY NEWS •

Overall real estate sales on Guam increased 55 percent to $56.1 million during the second quarter this year compared to the same period last year, announced local market tracker The Captain Real Estate Group.

"The good news confirms that the worst is over," according to the company, which compiles residential and commercial real estate transactions on Guam and issues quarterly statistics. Without timely government statistics, Captain's figures are looked to as an indicator of the industry's health.

"The overall market reflected strong gains during the second quarter of 2009 and expectations remain high that significant growth will occur over the next 12 to 24 months," according to the company.

At the same time, Captain confirmed there are certain sectors in the local real estate market that remain weak.

According to the company, some of the signs of a rebounding market include:

The median price of a house rebounded 25 percent to $199,500, the strongest quarterly gain on record, but still 16 percent below the $238,000 median price high set in the third quarter of 2008.

Guam saw 158 houses sold in the second quarter, up 40 percent from the five-year low of 115 sales in the first quarter. However, the 158 sales are relatively weak compared to the 210 average units sold during the same period from 2006 to 2008.

The more volatile condominium sector reflected 38 sales, up 52 percent, and a $131,000 median price per unit, down slightly from first-quarter statistics.

The U.S. military buildup, when it starts to go into full swing next year, is expected to raise real estate values, as well as sales activity, according to Captain.

Captain also noted "the bad news" that overall sales activity fell short of expectations -- 2009 sales volume reflects $225 million, down 42 percent from 2008.

Captain added "the ugly news" -- that Guam's real estate market lacks foreign investment.

South Korean investment "has shifted from acquisition into construction, which is positive, but we need foreign capital injections to push real estate to the next level," according to Captain.