Is the Island Full?
Interview with Wally Jones
(Photo: SPI Sept. 2021 Housing Report, Courtesy of SPI Board of Realtors)
Many have seen the impact COVID-19 has left on South Padre Island in the past year, and the housing market has seen a direct impact. Looking back on his records, former Chair of the Conventions and Visitors Bureau, and Chief Executive Officer/Founder of Padre Getaways, Wally Jones, has housing report records that go back to 2006.
Since the pandemic, says Jones, the Multiple Listing Service (MLS) has shown an incredible amount of activity in Port Isabel, Laguna Vista, but mainly South Padre Island. “It’s Primarily related to COVID-19. I think that some people may think it’s because of Space X, but we don’t see that being an influencing factor on South Padre Island.”
The Pandemic
Jones describes the pandemic as “changing the landscape” for people whose traveling became limited due to government mandates. “They wanted to have their own place and in driving distance that wasn’t horribly inconvenient.”
Just in the last 18 months and since the fall of 2019, Padre Getaways saw their market starting to move strongly since interest rates were low. When COVID first hit, Jones, admits he thought it would not be a good year for real estate sales, but prices took off.
Condos that once sold for $195,000 one year were averaging a $100,000 increase the next year. However, when comparing the housing report, in June of 2020, the median price compared to 2019 only rose 1.1%, standing at $240,000 as the current median price.
Compared to September 2020 – September 2021, the median price increased 18.4%, bringing the median price to $325,000. The only issue facing the island now, according to Jones, is there is no inventory left. “We are out of product.”
“If you see the reports from 2020, you’ll see that the median price is $150,000, then by September 2021 the price is up to $325,000. The increase in value has undoubtedly risen,” said Jones.
How will this affect the future?
South Padre Island’s fixed inventory leaves no room unless more listings sell or more product is built. Jones says there’s no crystal ball but mentions that after a drought of listings, the only option is to build north, but the north end of the island lacks utilities.
Despite limited listings, Jones believes if interest rates remain low, prices will hold. However, real estate agencies will likely face an impact due to the reduction in activity since there’s nothing to sell. “If there’s nothing to sell and what are you do? You knock on doors and ask if owners want to sell their house. The problem with selling your house/condo is, if you want to sell it and replace it you can’t replace it.”
In retrospect, according to Jones, the likelihood of seeing the same activity in 2022 is low simply because there’s nothing to sell. “We had a lot of inventory at the beginning of 2021.”
Future Predictions
As mentioned, Jones predicts that prices will continue to hold because there’s no place to build a new property. “The demand is going to need to stay strong. I think that the activity in terms of the number of sales is going to go down simply because there’s no inventory,” stated Jones.
He also predicts that if interest rates rise, it still might not force prices to go down since inflation affects everything from the cost of building now versus a year ago. If inflation continues, it will be more expensive two years from now. “Everything is getting more expensive. I do not see the possible rise of interest rates creating a situation where the selling prices go down.”
(Pictured: Wally Jones)
Ultimately, the market will remain strong in value and prices but will slow down because there’s nothing to sell.
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Island Matters | P.O. Box 2778 | South Padre Island, TX 78597
