The annual survey by Ragatz Associates of private residence clubs, destination clubs and fractional interests shows total sales of $516m in 2014, which is inline with the overall sales for 2013. The mix of sales within these groups has changed between the two years.

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. The total sales, including pre-sales and in-house resales across all three categories, were $517m in 2013. These figures do not include sales made at individual fractionalized homes or at developments with less than five units. Ragatz estimates that of the $516 million in 2014, about 64.3 percent was from new closed sales, 7.9 percent was from presales, and 27.8 percent was from resales.

The table below shows the breakdown of the 2014 sales:

    Fractional Interests $71m
    Private Residence Clubs $126m
    Destination Clubs $319m

Fractional interests saw an increase of 11% compared to 2013 and private residence clubs declined by $55m or 30% compared to the prior year. The bright spot was destination clubs which increased by $63m or 25%, although this was largely driven by the Ritz-Carlton Club focusing on selling access to its overall portfolio and so being included in the destination clubs, whereas in prior years it also sold individual ownership at individual properties and was inlcuded in private residence clubs. In the peak year of 2007 the overall sales across these property types was $2.3 billion.

Concentrated Interest

As in the last couple of years, a few clubs have seen high sales. Amongst fractional interests and private residence clubs 12 projects had total sales volumes of over $4 million, and five sold more than $10 million. The 12 projects are all in prime destinations where prices for whole-ownership residences have traditionally been high and inventory scarce.

Pricing

The average price per share for fractional interests in 2014 was $111,000 and for private residence clubs was $346,600. Both of these averages reflect a mix of all sorts of units from studios to four bedroom residences, with the average unit size at 1,670 sq ft. Annual maintenance fees average $6,550 per share, ranging from $5,350 among fractional interest projects to $10,150 among private residence clubs. On a per week basis, these averages are $1,050 and $2,100, respectively.

Share Sizes

As a broad rule, private residence clubs have lower share sizes, with a range of 1/12 to 1/8, or roughly 4 to 6 weeks of use each year. Fractional interests can have larger shares with 24 percent of the market made up of 1/7 shares or larger.

The full report for 2014 is available through Ragatz Associates website and costs $250.

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