Eugene, OR (March 28, 2012) –– Fractional resort real estate expert Richard Ragatz, Ph.D. of Ragatz Associates has recently announced results of his annual survey of the shared-ownership industry in North America.
Dr. Ragatz released the findings of his much-anticipated annual research paper, The Shared-Ownership Resort Real Estate Industry In North America: 2012 at the 12th Annual Ragatz Fractional & Resort Real Estate Conference on March 12-13 at the Hyatt Regency Scottsdale Resort and Spa at Gainey Ranch in Arizona, attended by about 200 participants in the resort real estate industry. The document is recognized as the most thorough and comprehensive survey of this highly specialized industry.
Co-sponsored by Ragatz Associates and Resort Equities, the conference was expanded this year to include all components of the resort real estate industry, including rental clubs, timeshare, fractional interests, and whole-ownership vacation homes. Emphasis was on industry trends, including resort real estate attractors, products and consumers, as well as on social media marketing.
According to consulting veteran Ragatz, “The key finding is that total sales volume in 2011 was about $552 million, a slight increase from $530 million in 2010. While this increase is nominal, it represents a four percent gain. We also learned that a significant number of developers said that sales were better during the second half of 2011 than in the first half, giving the impression that the bleeding has finally stopped and that we may be turning the corner.”
The $552 million includes new closed sales, presales and in-house sales. In reviewing the three components, sales volumes were $103 million (19 percent) in FI projects, $228 million in PRCs (41 percent) and $221 million in destination clubs (40 percent). Even though increasing by an overall four percent in 2011, shared ownership sales volume was down by 76 percent (-$1.7 billion) since the peak year of 2007.
The survey revealed that there are currently some 305 fractional interest (FI) projects and private residence clubs (PRC), plus six destination clubs. Of the 305 developments, 98 enjoyed some sales in 2011, as did all six destination clubs. The 98 FI and PRC projects are the primary focus of the survey. Of the 305 developments, 67 percent are in the United States, 17 percent in Canada, eight percent in the Caribbean and eight percent in Mexico. Colorado and California host 22 percent of all developments. Of the 98 active developments, 67 percent are factional projects and 33 percent are private residence clubs. Eight percent of these had sales over $10 million while 42 percent had sales of less than $1 million. Most of the 207 inactive developments are older, sold-out fractional interest projects.
In the survey for 2010, there were 104 active projects that made sales that year. Some 12 new projects began sales in 2011, meaning that 18 of the active projects in 2010 dropped from the list. A few of these may have attained sell-out, but most simply ceased sales due to the country’s economic condition. Also, some were actually in a sales mode but did not complete any sales.
While prices vary widely, the average fractional interest is $131,000 per share; PRCs average $254,000 per share. Annual maintenance fees average $6,650 per share. The average price for membership in the destination clubs is $273,000.
In reviewing the overall industry performance, Ragatz added that several factors combined in 2011 to create the “perfect storm” for stagnation in shared-ownership sales performance, negatively impacting this market since the last quarter of 2008. They included uncertainty about the country’s long-term economic stability and an almost total lack of consumer financing.
However, it is widely felt in the resort real estate industry that the shared-ownership components will strongly rebound in the future. This thinking is based on personal use instead of speculation, being able to purchase only the amount of time available for use and discretionary income, along with lowering household spending habits and other factors.
The complete report is available for purchase from Ragatz Associates at (www.RagatzAssociates.com)
ABOUT RAGATZ ASSOCIATES.
For over 35 years Ragatz Associates (www.RagatzAssociates.com) has been internationally recognized as the leading consulting firm in the resort real estate industry, conducting over 2,500 assignments in 72 countries. The firm specializes in feasibility analyses, consumer research and business planning. Sister company Ragatz Resort Realty is a brokerage firm that brings together sellers, buyers and investors of resort hotels, whole-ownership and shared-ownership projects, and improved land appropriate for resort development.
For Additional Information
Please contact Dick Ragatz at 541-686-9335
Media Contact: Marge@LennonCommunications.com
SOURCE: Ragatz Associates