. The story said in part:
The median price of Guam homes has soared to $195,450 during the first three months of this year, a whopping increase from $170,000 the previous quarter, according to statistics released yesterday by market tracker The Captain Company. Although the military build-up will get credit for much of the price increase, I would not be surprised if the major reason is investment from people who live on the mainland.For instance, a two bedroom townhouse in the Foggy Bottom area of Washington DC area where I live could be purchased for about $250,000 to $300,000 in 2000. Today, that same home would cost more than $700,000 — such has been the run-up in prices over the last seven years.
People who want to return to Guam or purchase a second home can either tap the equity in their existing home or just cash out, buy a comparable home on Guam, and have money to spare. Guam is still a relative bargain.
While military families will drive up prices, there is a limit to what they can pay and many will rent. My guess is Guam will see a price housing price acceleration as people seek to buy first and second homes on the island.
But a run-up in housing prices can become a serious problem as well for young families who want to stay on the island. This may quickly become a serious issue.