Florida Fractional Ownership

The National Association of Realtors reported on April 2 that sales of vacation homes in 2007 fell 30.6% from 2006, to 740,000 units. Sales of primary residences fell 10% to 4.34 million units; and sales of investment properties fell 18.1% to 1.35 million units in 2007.

This large drop in vacation home sales is in strong contrast to the performance of the fractional market. Ragatz Associates’ annual survey of fractional homes, private residence clubs and destination clubs found combined sales of $2.3 billion in 2007, up 8.3% over 2006.

This striking contrast in the market for fully-owned vacation homes as compared to shared ownership seems to indicate that what we’ve been thinking all along is true: fractional ownership makes sense! And it makes even more sense in a struggling economy.

Fractional ownership of luxury vacation properties, that on average are used less than one month per year, is cost-effective. Owners pay only for the amount of usage they desire, without the costs and headaches of full ownership.

Fractional ownership makes sense, as well, in environmental terms. With growing awareness of the longterm impacts of consumption on the environment, it’s certainly better to share large assets such as vacation homes. The environmental impact of twelve families sharing one luxury vacation residence is far less than that of maintaining twelve separate residences!

We believe the luxury fractional vacation home market will continue to grow, even in the current real estate market. It’s a product that makes good economic and environmental sense, and consumers are becoming more aware of fractional ownership as a viable alternative.