Resort Condo Market Faces Tough Times
- Mar 10, 2009
By Anuradha Kher, Online News EditorNew York–Since the bubble in the resort condominium market burst in 2005, the industry has been facing a decline in prices as well as in number of transactions. Now with the severe downturn in the economy, unemployment and loss of consumer confidence, the industry is suffering all the more.But Anthony O’Brien, senior vice president of resort services for The Playground, developer of resort condo communities, is optimistic about growth in the sector. “The buyer today is really looking for the deal, the opportunity to buy in this marketplace where prices have gone down. Our company is reacting to the changes in pricing,” he tells MHN.While the prices declines vary depending on the locations, the Florida market has seen the largest drop—nearly 35 to 40 percent. The Colorado market has seen modest declines in the range of 10 to 15 percent, and the Canadian resorts are facing a marginal, to almost no change in prices. However, the number of transactions in Florida has gone up year-on-year due to the significant prices declines. On the other hand, transactions in Canada are down.One of the fundamentals of the secondary home market is location, explains O’Brien. A good location goes a long way in selling a resort condo. “Developers in the secondary and tertiary locations are being hit harder,” says O’Brien.One factor that has changed in this space is the fact that demand no longer outpaces supply. “There’s just not as many buyers and from the seller’s perspective, there is a lot more competition,” O’Brien says.As the reality of the marketplace has changed, The Playground is no longer pre-selling units, but is instead focusing on selling off its inventory. The company is looking at new project locations but “Since it takes close to five years from the start to the finish of a project, our intention is to be at the forefront when the market turns around 12 to 18 months from now,” concludes O’Brien.