Fractional Life: Ragatz Half-Year Report Shows Positive Signs for Ultra Luxury Fractional Market

Fractional Life recently reported that fractional consultant Richard Ragatz has released a half-year report for the fractional and PRC market in the U.S., Canada, Mexico and Caribbean. According to the article, the "total sales volume in the shared ownership resort real estate industry (excluding destination clubs) during the first six months of 2010 was about $175.1 million," down from the same period a year ago. However, Ragatz also hinted that the market is showing small signs of recovery at the upper end.

"It appears that the bottom may have been reached and demand is beginning to pick up--at least at the high-end PRC level," noted Ragatz.

Fractional Life also reported that the "projects which achieved the most encouraging performance included those at the higher-price PRC level; those in Colorado and the Caribbean... and those in prime destination resort communities such as Aspen, Vail, New York City, Maui and Los Cabos."

What does this news mean for The Élan Collection? The company's Stan Tonkin, Vice President of International Marketing and Sales, had this to say about the report: "While we continue to watch the overall shared ownership market's activity closely, we are buoyed by the Ragatz Report's findings for a number of reasons. First, we operate at the upper echelons of the luxury market--which have not been as impacted by the recession. And secondly, we are adding properties in many of the prime destination resort communities mentioned by Ragatz. So we feel particularly optimistic about the opportunities for The Élan Collection moving forward."

The Élan Collection recently added a modern, 14-acre riverfront property in Aspen to its portfolio, which already includes a stunning private estate on an acre of prime beachfront in the Turks and Caicos Islands. The Élan Collection is also currently searching for the most desirable properties in New York City, Hawaii, Cabo and Montecito, Calif.

A Piece of the Vacation Real Estate Pie: Top 3 Take-Aways from Fractional Summit 2010

Fractional Summit 2010 recently wrapped its annual delegation of the biggest and brightest stars in the international fractional industry. What were the key take-aways from the event?

1. Fractionals are resilient in the current market. We’ve been saying it all along. Fractionals, or shared ownership opportunities (as we prefer to call them), are “the smart buy” when it comes to purchasing luxury vacation properties in today’s real estate climate. Rather than hassling with the headaches of typical home ownership, the affluent can own a piece of the ocean, a slice of the good life in wine country, or a share of the mountain. It’s due to the fact that “fractionals have win-win appeal as both a lifestyle buy and an investment"; while Piers Brown, founder of the UK’s Fractional Life, noted: “Despite the economic slowdown, there are green shoots starting to appear and a week doesn’t seem to pass without Fractional Life featuring news of a fractional real estate launch somewhere in the world.” Where Piers sees green shoots, we see the glimmer of élan… but we both agree that the future looks bright.

2. Fractionals have high levels of consumer satisfaction. The delegation also found that fractional owners in a variety of price points are happy with their investment. It’s easy to see why. When you look at the offerings at fractional private residence clubs such as The Élan Collection, owner-members will have more than their fair share of benefits (forgive the pun): luxury amenities, services, affordability, flexibility, reduced running costs, stress-free management and the potential for capital appreciation.

3. Fractionals are a natural upgrade from a timeshare. Fractionals often get compared to timeshares, but they exist in a league all their own, says Stan Tonkin, Vice President of International Marketing and Sales for The Élan Collection. “Shared ownership private residence clubs like The Élan Collection offer a rare opportunity to own a luxury vacation residence for a fraction of the price,” he said. “It’s vacation home ownership at its best.” According to the delegation, shared ownership "is a viable solution to second home ownership as it fills the gap between timeshare and whole ownership. As Bryan Lunt, Chairman of the Absolute World Group of Companies, commented during Fractional Summit, “Fractionals have lower management fees, more benefits and feel like more of an asset.”

What do you think of the Fractional Summit panel’s findings? Are you seeing more enthusiasm for shared opportunities verses whole ownership opportunities? Are affluent clients embracing the fractional concept in your market?