The annual survey from Ragatz Associates shows a drop of 10% in the sales for various shared ownership properties in 2012.

Ragatz looks at sales in the USA, Canada, Mexico and the Caribbean, for developments with greater than 5 units. For simplicity, it splits the sales into "fractional interests", which are sold at less than $1,000 per sq ft, private residence clubs, which sell for greater than $1,000 per sq ft and then destination clubs. In reality fractional interests and private residence clubs differ from each other in terms of price, quality of product, services and amenities. Total sales, including pre-sales and in-house resales across all three categories were $497m in 2012.

The table below shows the breakdown of these sales:

    Fractional Interests $71m
    Private Residence Clubs $196m
    Destination Clubs $230m

Fractional interests saw a drop of 31% compared to 2011 and private residence clubs declined by $32m or 14% compared to the prior year. The bright spot was destination clubs which increased by $9m or 4%, largely driven by the growth of Portico and Inspirato. Ragatz estimates that in 2012 there were 1,560 shares sold in fractional interest and private residence clubs, compared to 1,925 in 2011. Prior to the recession there were approximately 6,400 shares sold in each of 2006 and 2007.

Concentrated Interest

20 of the private residence club had sales of over $4m. In total these 20 clubs accounted for $192.5m in sales or 72% of the sales for all fractionals and private residence clubs. These clubs were all in prime destinations, including Aspen, Vail, Napa Valley, New York and prime beachfront loctions. The continued demand in these locations largely reflects the ongoing high prices for whole ownership real estate in these markets, this makes the lower cost shared ownership clubs more appealing.

Pricing

The average price per share for fractional interests was $107,300 and for private residence clubs was $293,700. Both of these averages reflect a mix of all sorts of units from studios to four bedroom residences.

The full report is available through Ragatz Associates website.

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