Ragatz Associates Announces Dramatic Growth of Fractional Resort Real Estate

Richard (Dick) L. Ragatz

Ragatz Associates, the leading expert in fractional interests and private residence clubs, has announced highly positive findings in its 23^rdannual survey of the fractional interest and private residence club industry in North America, indicating significant growth in the past two years. The data includes properties in the U.S., Mexico, the Caribbean, and Canada.

Sales volume for 2022 was estimated at $624 million, the highest in 13 years, when it topped $665 million in 2009. Sales had peaked before the recession at $1.7 billion in 2007, but in succeeding years, the amount fell dramatically, averaging only $232 million between 2006 and 2020. The recent upward trend began in 2021 at $495 million, increasing to $624 million just a year later in 2022.

The vast majority of the $624 million was sold at the luxury private residence club level – in which the average per square foot price is over $1,000. For this industry component, the average share (with five weeks of annual use) sold for about $325,000, or $65,000 per week and $1,350 per square foot. More than one-quarter of the residences at this level are priced at over $2,500 per square foot.

As in past years, the size of the developments remains small with an average of 28 units. Typical locations also remain the same – prime site, in mixed-use developments with hotel, high-end condos or homesites, and where prices for whole-ownership real estate are high and inventory is limited.

According to Dr. Richard Ragatz, “Based on 49 years of experience in resort real estate, we expect the industry will continue its recent growth track as the national economy hopefully stabilizes and families seek locations to escape urban disadvantages. We believe this growth will continue, because the 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 concept becomes even more attractive.” A copy of the full report is available at www.RagatzAssociates.com, or call Dick Ragatz at 541-912-9436 for more details. Ragatz Associates is a leading international consulting firm in the resort real estate industry. The firm has been active for almost 50 years and has conducted over 2,500 studies around the globe. The Annual Survey is generally acknowledged as the most thorough and accurate study conducted of the fractional interest industry on a global basis.

Marge Lennon