Grace Santiago, 41, has been wanting to buy their first family home and get out of the rental market.

Owning a house, however, has become more out of reach for many on Guam.

“I started searching for a house during the pandemic because, at that time, I noticed a lot of first-time home buyers got their first house with no down payment,” the Dededo resident said. But the low interest rates and other perks offered at the start of the pandemic have started to change.

And even if Santiago and her husband both have full-time jobs and own a little dress shop, finding a good enough house within their budget of $280,000 to $320,000 is quite a challenge.

Guam’s new median price for a single-family dwelling is now $426,000, Cornerstone Valuation Guam, Inc. President Siska Hutapea told Pacific Daily News.

That’s a substantial increase from the median price of $299,000 in pre-pandemic 2019, and $333,500 in 2020.

In just about a year, the median price went up by about 12%, or from $380,000 in 2021.

Liz Duenas, RE/MAX Diamond Realty associate broker and current president of the 610-strong Guam Association of Realtors, said a household buying a $400,000 home with a 30-year loan term at a 5% interest would end up paying about $2,147. That is, if the family has no other debts.

“How many local families, tell me, can afford that?” she said, on top of other bills.

Hutapea said “limited supply, high construction cost, low interest rates, VA loan buyers that can buy with zero down payment and closing cost rolled into the mortgage” are the factors contributing to the higher costs of houses.

New construction

Building new homes is also proving to be more costly for developers and individual families because of the increased costs of construction materials and shipping, and limited construction workers to build residential units off-base.

The number of H-2B workers on Guam reached a record high of nearly 3,000 in almost three decades, but most of them are working on military construction projects. Guam still has limited local skilled construction workers to meet the demand.

Because of the low inventory of houses in the market, multiple offers on a property also artificially raise the prices, leaving many to stay in rental housing rather than own a home.

“For a decent house, no renovation and high market value, it’s hard to find a house based on my price range,” Santiago said.

But she’s not losing hope about finding a family house they can call their own, saying “nothing is impossible if you want to pursue your dream.”

After all, she said, owning your own house “is like having your own freedom, and privacy.”

Million-dollar houses

There are only about 240 homes in the market, lower than the 400 to 500 that Guam used to see at any given time.

About 78 of the currently listed homes are “pending” or in the process of being sold, and many are in the $220,000 to $375,000 range.

That leaves only about 164 single-family homes to choose from, including single-family dwellings that cost $1 million to $2 million.

“We never had these many $1 million-something homes,” Duenas, of RE/MAX Diamond Realty, said of property listings that show how the prices have significantly increased.

They used to be in the $900,000 range but with limited inventory and multiple offers, the prices went up, she said. Even if most sales happen in the lower range of the market, they also eventually boost the price per square foot for the higher-end properties.

Losing to cash buyers

Mark Scott and his wife spent almost two years looking for their own house online and doing those awkward “drive-bys” on the weekends until they started seeing prices rise sharply about a year ago. They got serious about owning a home and asked a realtor for help.

“Unfortunately, the prices were rising so quickly, all we could afford was another condominium,” Scott said.

He lived in a condo for over 10 years until he got married a few years ago. He and his wife started daydreaming about having a home with a yard for the kids.

The Scotts placed “offer after offer” on condos for over six months, “way over the asking price,” only to lose “mostly to cash buyers every time.”

“We were discouraged, and we wanted to give up altogether,” Scott said.

Duenas, of the Guam Association of Realtors, said most cash buyers have been from South Korea, many of them have been on Guam for a long time.

While there have been cash buyers from China, she remembers having a property sit in escrow for about six months while waiting for money to be transferred from China to Guam.

For the Scotts, the house-buying experience is “tough out there.”

“We expected it to be challenging of course — but we had no idea how inaccessible housing was on Guam. We couldn’t compete with foreign cash buyers. All the executive homes intended for military rental were out of reach,” Scott said. “There just aren’t many affordable options out there for the people.”

VA loan

Acting fast when they saw a house “that seemed perfect” in December, and Scott’s eligibility to get a Veterans Affairs home loan worked in their favor, Scott said.

Scott recently retired as a captain in the U.S. Army National Guard and has remained its spokesperson as a civilian.

“We just had some luck in the timing, and our realtor Duane and our banker Jiamei believed in us. But we also had to make sacrifices,” Scott said. “We lived small and ate ramen for a period of time. Joining the Guard and getting a free education helped me have a better station, and qualified us for a VA loan.”

He’s thankful that he and his wife were able to move into their three-bedroom, two-bath home in March. Although a little out of their $300,000 price range, the house “was everything we envisioned.”

They got their home just in time, before the interest rates rose.

“I don’t think it would have been possible today, just a few months later,” Scott said.

High demand

Residents face competition from military personnel and their families also looking for housing off base.

For service members living outside of Andersen Air Force Base or Naval Base Guam, the housing allowance is $2,205 for single personnel and $2,450 for those with families with them. They also get a utility allowance of about $700.

Many landlords have priced their rental units for the military, making them beyond reach for many families with limited income.

Military families that have decided to buy their own home, just like the Scotts, get a competitive VA loan rate, and their closing costs and other fees could be rolled into the mortgage cost.

The Guam Housing and Urban Renewal Authority raised its standard Section 8 rental aid for low-income families to compete for available housing, Duenas said.

“But the families who don’t qualify for Section 8, they only have fixed income like the people who make $40,000 a year, where are they going to stay?” Duenas said.

The unaffordability and unavailability of family homes, for the most part, has so far not been a hot-button topic this election year.