123PRC
UNDERSTANDING
Fractions/Private Residence Clubs (PRC)
WHY IT IS THE FASTEST GROWING FORM OF REAL
ESTATE OWNERSHIP
- The 76 million Baby boomers which account for 1/3 of the US population, has dominated consumer demand for all products in every stage of its lifecycle, and is now dramatically affecting demand for second home real estate.*
- The second home market has accounted for nearly 40% of all new home sales since 2004, according to National Association of Realtor’s.
- 2nd homes provide investment diversification, which has become a critical concern of consumers since the stock market crash in 2000 and 2001.
- Two thirds of the 2nd home owners spend four weeks a year or less in their home, thus making second home ownership impractical for about 80% of the households in the US earning $150,000 per year or more.*
- In response to demand, the resort industry has undergone substantial change in the last 5 years. In order to broaden the market, new products have been invented to better respond to people’s needs and pocketbooks.
- Fractional/PRC Buyer’s benefit by buying at a much lower price point for a luxury resort condominium than what they typically may be able to afford, and/or they are buying what they only have time to use.
- Industry Size- 170 fractional interest resorts have been identified as of March 2005, an increase from 151 in 2004 and 138 in 2003. **
- Fractional interest sales totaled $1,075 million worldwide during 2004. Including $31.5 million of re-sales and $436.7 million of pre sales were generated in 2004 for a grand total of over $1.5 billion**
- Consumer recognition- Half of U.S. households with an annual income if $150,000 or more have been introduced to the concept of fractional ownership. **
- Average Price of a Fractional Interest/PRC was $221,600 in 2004 up from $207,800 in 2003**
- 93 percent of Fractional/PRC owners tend to be satisfied with their purchase!** Hobson Real Estate Advisors ** Ragatz Associates,