Life exists out there! Developers are beginning to stir. They have partially sold inventory that they need to sell for a number of reasons: getting stale, to work down bank loans, hopes that the economy is turning around, etc.
Star has been contacted by a number of developers to design work-through programs. The good news is that these are regional resorts where the market should come back first. The exception might be in Aspen, where the market never really went away, at least compared to other resorts.
Fractions have been 'missing in action' during the financial collapse and recession for reasons discussed before. But, as the seers have been saying, when the market comes back, the fractional interest will be the product of choice, again, for all the aforementioned reasons.
Will investors look at otherwise healthy resorts, where pricing is right, as an investment opportunity and finally leave the chase for buying damaged assets for cents on the dollar? We don't know that yet. But, there is an indicator or two that this may be the case. The ability to buy into a resort or project that has been well maintained and well positioned to re-enter the market with good to excellent margins should be appealing to knowledgeable investors.
There are obvious markets that have not been hyper-damaged by the recession. Texas stands out. As does New England, where prices did not crater as in other areas of the country.
Our approach has been cautious. We have poked and prodded the primary and secondary markets. We have probed the projects to see if there are fatal flaws. We have recommended use plans that fit the primary market, so in some cases there will be use plans within use plans.
It's clear that the market for buying a vacation home is still traumatized, but if the offering fits the specific lifestyle of the buyer and if the buyer will consider making an investment for his kids, then a sale will go down.
What of Gen X? We think they will be the driving force in the coming year or two. And thereafter, too, if the fractional product, pricing and lifestyle can stay attentive to Gen X needs. What say Chris Kelsey?
Damn, it's good to be back in business!
