Why the fractional vacation industry is booming...
The most economical way to own more than one home, is to only own the piece you want to use!
About one percent of eligible U.S. (assuming $200,000 of income)
households have purchased shared-ownership resort real estate (this
includes Destination Clubs with fractional interest projects and
private residence clubs If penetration rate reaches 10 percent, about
90 percent of the market at this level remains untapped.
There are at least 10 different sizes of shares being sold. Most frequent fractional interest projects are 1/10s (24 percent) and 1/4s (28 percent). For private residence clubs they are 1/10s (23 percent) and 1/9s (26 percent). On-site amenities are extensive in the industry, especially at the private residence club level. The majority have private concierge, pre-arrival food and beverage stocking service, valet parking, transportation service, etc.
Demographics - 78 million US Baby Boomers that will retire in the next 15 years (the largest population turned 50 in 2004-05, with 50th birthdays occurring every 7 seconds). The under told statistic is that there will be 103 million Empty Nesters in Europe by 2009 and Japan will have 32 million boomers by 2010, in a total population of only 127 million people. 213 million Boomers will compete for a uniquely similar lifestyle in retirement.
Boomers Like Debt – Unlike the previous generation, Boomers have proven that they are willing to pay, and borrow for the lifestyle they want. The boomer generation has innovated everything from disposable diapers to SUV's, they will innovate the idea of retirement homes.
The Wealth Transfer – Not everyone is going to get rich. Boomers are estimated to get the biggest slice of the inheritance pie: $17.8 trillion. Distributed evenly, each of the 78 million US boomers get $228,205. But these inheritance dollars will not be distributed evenly. The 73.5% of the boomer cohort will likely join the wealthier classes. Within the next 15 years, 20.7 million boomers will become over $658,000 wealthier, and 57.3 million people will get less than $72,900 to boost their meager net worth/retirement. 20.7 million people may be able to afford luxury retirement residences if they innovate to fractional ownership, condo hotel, and private residence clubs. Whole ownership is going to be bid farther out of reach by the sheer mass of this population competing for prime property, a trend that is already under way. Boomers will need to get creative by purchasing a combination of a primary residence, Condo Hotel and Fractional and PRC ownership options, to more efficiently use their limited nest eggs and to have active and dynamic golden years.
Interesting Facts:
Traditional timeshare grew 21% to $7.87 billion in 2004, average price $15,784.
High-end timeshare grew 22%, to $1.075 billion, average price $40,270, 50% of owners say they would buy more fractional shares in the future.
Only 3% of US population currently owns fractional real estate interests.
ARDA expects a 300% growth rate in Non-equity club memberships with average annual dues of $9800, and 4-8 weeks of fractional ownership.
The average American worker gets 2.4 weeks of vacation, and will retire at age 62. Many boomers expect to continue to work, possibly in a different career after retirement.
The $100,000+ income cohort is growing 8 times faster than any other income group in the USA. Mortgage leverage has also grown in recent years. These people have money and are not afraid to borrow to own more real estate and lifestyle.
There are 142 fractional projects in the USA, 23% in Florida, 21% in Colorado. That's 549,295 boomers for each project in supply.
The most economical way to own more than one home, is to only own the piece you want to use. Call us today to learn more about the Fractional Share Home Ownership opportunities in Breckenridge Colorado.
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