Fractional Ownership News
Oversupply threatens fractional real estate sales in Aspen
Despite a strong month of sales for fractional ownership projects in Aspen this April, a recent study is predicting a tough year ahead for what was once the “hottest market segment in Aspen and Snowmass Village real estate”, according to the Aspen Times.
There were 20 sales of fractional interests in various projects in April, totalling $10.25 million in value, according to Land Title Guarantee Co.'s monthly analysis – a 91 per cent increase in dollar volume from April 2009.
But for the year to date, there have been 57 sales of fractional interests, a drop of 56 per cent, with a dollar volume decrease of 77 per cent from the same period in 2009.
Aspen Appraisal Group undertook a recent analysis of all segments of the Aspen-Snowmass real estate market and found a “huge amount of unsold inventory” in fractional ownership condominiums, relative to other market segments.
“We have what is to most knowledgeable observers an oversupply of fractional interest units for a resort the size of Aspen/Snowmass,” said Randy Gold, a principal in Aspen Appraisal Group and a 30 year veteran of the Aspen real estate market.
Gold says there are about 3,300 ownership interests in nine fractional condominium projects in Aspen and Snowmass Village, with 200 interests for sale through the Aspen Multiple Listing Service. Most of those are resales listed by current owners rather than developer inventory.
“Between unsold developer units at the Hyatt, Ritz, Dancing Bear and the Residences at the Little Nell (RLN), it is easy to see at least another 500 interests that have not been sold,” said Gold. “With a ballpark of 700 available interests, this translates to about 20 per cent of the total supply.”
R.J. Gallagher, managing director of sales and marketing for the RLN, said prices there have stabilized and the development has seen 22 completions this year with 12 more scheduled. Gallagher said his team remains “bullish” about their project despite an oversupply at some projects. He said he believes some independent projects — like RLN, Dancing Bear and the Innsbruck — have unique-enough qualities to keep them attractive in a slow market.
But Gold cautioned that the market may become even more saturated if current owners come under financial pressure and are forced to try to resell their shares: “The fractional interest market will likely remain weak for quite a while, and likely weaker than we saw in 2008,” Gold said.
www.aspenappraisalgroup.com
31/05/10
Got a Fractional news story? Contact Us.
Your comments
Please enter a valid email address, name and two word security code to post a comment. Your email address will not be published and will be respected by our privacy policy.
