The short version of the article below illustrates what happens when real estate prices get ahead of a local economy. Most of us could never afford a home in Aspen or Vail. So what happens if real estate prices get ahead of ALL local economies? Well, then they will start to sell timeshares like the ones below most likely. Why hasn't someone thought of that already in Denver? There is a home for sale in Denver for 20 million. How many people are going to afford that? Why can't that be split up into 20 pieces and sold to people all over the country? At some point someone's going to do it. It will most likely be in Cherry Hills or in Cherry Creek first, but could technically happen in any area with million dollar homes in it...which is getting more common by the day. How about areas like The Timbers, Centennial Ranch, Castle Pines, just to name a few?
David Frey - Aspen Daily News Correspondent
Wed 05/02/2007 06:01AM MST
When Rusty Parker first heard about fractional ownership projects, he was dubious. He envisioned some of the decrepit timeshares of old. So on a trip to Aspen, he checked out the Ritz-Carlton Club at Aspen Highlands when it was still under construction. He left town a member.
He couldn't afford to buy a home in Aspen, Parker said. The roughly $250,000 he spent for a winter membership wouldn't have bought him, well, anything. But it did buy him a share in the club, and he says he spends some 50, 60, sometimes 70 days here, in luxury accommodations, with his family's clothes in the closet and a concierge at hand.
"I think it's the wave of the future," said Parker, 51, an Austin, Texas, real estate developer. "Lots of people would love to have a place where they could store their stuff and sink some roots in town without having the expense of a stand-alone property."
Fractional ownership is dominating real estate markets in many resort towns, and Aspen is leading the trend. Pitkin County has 11 fractional-ownership properties, from Aspen to Basalt, with some 207 opportunities either for sale or under contract. More are being considered as existing lodges consider switching to fractionals and redevelopment in places like the Snowmass Mall get under way.
But as fractionals make up a bigger and bigger fraction of resort real estate, watchers are weighing its pros and cons. "It's a huge issue in every resort town," said Snowmass Village Town Manager Russ Forrest. Fractional ownership is a part of Snowmass' new Base Village development, and it's expected to be a part of the redevelopment of the Snowmass Mall. It has also been a big part of the redevelopment of Vail, where Forrest had previously been community development director.
"You want to make sure you have a balance," Forrest said.
A new survey by the market research firm Ragatz Associates declared 2006 a record year for private residence clubs, high-end fractionals like Aspen's that, according to the survey, sell for over $1,000 a square foot. Ragatz found sales of these luxury fractionals nearly doubled last year, with $1.1 billion in sales.Aspen in Front The Aspen area leads the market. Its offerings account for about half the private residence clubs in Colorado and a fifth of those in the country.
In all, the survey found some 254 fractional projects, more than half with active sales. Colorado, California and Florida make up more than a quarter of all fractional developments. Over half the $2.1 billion in fractional sales last year came from private residence clubs.
dfrey@aspendailynews.com
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