The annual North America survey by Ragatz Associates showed a slight increase of 4% across all shared property types, including fractionals, private residence clubs and destination clubs.
Ragatz counted 98 fractional and private residence clubs that were being actively sold by their developers. There are several hundred that have completed initial developer sales or in some cases have stopped selling because of the economy.
The sales split by property types were:
|Private Residence Clubs||$228m|
Some interesting points from the survey are that average prices have dropped about 27% since 2007. These results mirror the some of the specific results that we've reported on as private residence clubs lower their prices, in line with the general drop in the overall real estate market.
The reported average maintenance fees work out to about $2,000 per week for private residence clubs. This reflects the very high level of service and amenities in the clubs, which are comparable to five star hotels. Services typically include daily housekeeping, full concierge services, and very high levels of fittings. The clubs are a good fit for people who want and appreciate this high level of service, and don't want the bother of maintaining their own fully owned home.
An increasing proportion of both the fractionals and private residence clubs also offer an exchange service, in which members can swap some of their ownership time for vacations in other locations. These exchanges may be internal to the parent company, for instance Ritz-Carlton runs its own exchange, or may be operated by a third party exchange company. If you're considering buying into a shared ownership property, do ask about the exchanges that are available and how they work.
One other interesting insight from the survey was that half of developers said their project had done about the same as whole ownership in their area. 20% said they had done better and 32% said they had done worse. So broadly speaking the fractional market appears to be mirroring the overall real estate market.