As we all know, the U.S. economy lurches in fits and starts—good news is followed by negative news on consumer confidence, job creation and the like. We have yet to see what exactly the new reporting requirements for community banks, which supply much of the necessary capital for our projects, will mean.
I could not attend the ULI’s Recreational Development Council in May, but from reports, there was some upbeat news (economists aside). On the whole unit side, there are sales of new inventory of smaller houses and cottages (such as the successfulTalking Rock Ranch in Prescott, AZ), as well as the very high end, which continues to perform well. What’s left of distressed homes will sell if the price is right. At least we know the demand is still there for second homes; the younger boomers and the older Gen Xers see the value in quality family time and the multi-generational aspect of vacation home ownership.
On the downside, Daniel Alpert reports from ULI that 23% of all homes in the U.S. are under water. I know we’ve all heard the statistics before, but one in four homes—wow. It’s certainly holding down any recovery in our sector. However, the Wall Street Journalrecently reported that foreign buyers, particularly Canadians, are very active, which is some good news for the areas they travel.
In other updates, Sherman Potvin reports that his inquiries are few and far between and mainly raw land as there’s little or no money available for building. Here at Star, we continue to work on deals on the Gulf Coast of Texas and in New Orleans. The money is elusive; here, but not on the table. Gosh, this has been going on for near four years now!
Some positive news: Timbers Resorts continues its streak as it picks up yet another project in Northern California wine country (can they make the golf course any more playable?) and opens the hotel portion of its Tuscany project. And, Auberge Resorts has expanded into Oregon. Auberge is unique in that it manages small, luxury properties, many with a fractional component, allowing the company to really understand the “demands” of owners. A big congratulations to Auberge Resorts and CEO Mark Harmon.
