PARTY’S OVER FOR GUAM REAL ESTATE

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PARTY’S OVER FOR GUAM REAL ESTATE Sales cut nearly in half this year

By Steve Limtiaco

HAGATNA, Guam (Pacific Daily News, Oct. 1, 2008) – Guam last year saw about $686.8 million in real estate transactions, but "the party's over, at least for now," according to real estate expert Nick Captain.

Captain said that amount is projected to drop to $350 million this year, and to $300 million in 2009.

"We're anticipating a continued slowdown in the market," Captain, who is president of the Captain Real Estate Group, told members of the Rotary Club of Tumon Bay during the group's meeting yesterday at the Hilton Guam Resort and Spa.

There has been limited economic growth on island and a decline in tourism, he said, and falling prices in mainland cities have created competition for foreign investment.

With respect to the island's military buildup, Captain said, there has been a "reality check that 2014 is a long way away."

That is the year 8,000 U.S. Marines from Okinawa, and thousands more of their dependents, are scheduled to relocate to a new base in Dededo. The move that is expected to bring $15 billion in military construction projects here and increase the island's population.

Investors in Japan and Korea also have less money to invest, Captain said. He said Guam builders were counting on Korean investors to buy some of the high-end homes being built on island -- those costing $500,000 or more -- but only five of those homes were sold during the first half of this year, with dozens more unsold.

"That market has shriveled up," he said.

The Guam government's moratorium on new development in some villages also has been a contributing factor to the slowdown, he said, because it is difficult to tell investors they should buy real estate here but not do anything with it.

The Guam Waterworks Authority in July placed a moratorium on new development projects in central Guam because the wastewater system servicing the area was at capacity. The moratorium was expected to last four to six months, but was extended to next April because of the government procurement process for required projects.

While foreign investors have fewer resources, Captain said, the good news is, "Guam banks still are very active in providing capital for real estate transactions."

Captain said he doesn't believe real estate prices here will drop, and the military activity on Guam limits the downside of real estate investment.

Guam is the only U.S. jurisdiction virtually guaranteed to benefit from significant economic and population growth in the coming years, he said.

"Don't forget to smile, because the Marines are coming," he said.

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