Ragatz Associates, specialists in fractional interests and private residence clubs, has released encouraging results from its 22nd annual assessment of the fractional market in North America, which covers the United States, Mexico, the Caribbean, and Canada.
The total sales volume in 2021 was $255 million, up 42 per cent from the previous year. This was the highest amount in eight years, signalling that the market is finally on the rise after several years of sluggish activity. The survey is often regarded as the most comprehensive in the industry.
In 2021, the average project sold $7.5 million in inventory. The average price per share was $286,000, the average weekly price was $55,000, and the average price per square foot was $1,325. All of the averages were much higher than they were in 2020.
The projects are still small, with an average of 22 units. The typical locations also remain the same – prime site, in a mixed-use development with a hotel, high-end condominiums or homesites, and where whole-ownership real estate is expensive, and inventory is scarce.
The high-end private residential club, commonly characterised as fractional interest projects selling for more than $1,000 per square foot, saw the most growth in the fractional resort market in 2021.
This industry segment accounted for 88 per cent of total sales volume in 2021. The average sale price per project was $12 million, with a share price of $352,000 and a price per square foot of $1,750.
According to Dr Richard Ragatz: “Based on 48 years of experience in the resort real estate industry, we expect the fractional interest industry will once again continue to be on a growth track as the national economy further improves, and as families seek locations to escape urban disadvantages. We believe this growth will continue because the fractional interest concept is based on personal use rather than speculation, and buyers with discretionary spending income are able to purchase only the amount of time they can use.
“Other reasons for growth include the fact that all property management is handled, leaving owners with the benefit of just showing up and enjoying the property and its amenities. Add to this the opportunity for flexibility and variety of use from the external exchange process, and the fractional interest concept becomes even more attractive.”
The complete study may be seen at Ragatz Associates, or you can contact Dick Ragatz at 541-912-9436 for further information.
Ragatz Associates is a resort real estate consultancy firm with offices worldwide. The company has been in operation for about 50 years and has completed over 2,500 investigations globally.
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