Fractional Ownership Sales Key to Condo Market Revitalization

Implications: Florida and Southeast  Alabama condominium sales are flatlined with bulging inventories that are losing value each day they sit idle. Investors are losing money,patience, and hope as this sector struggles for air. Builders are scrapping plans for new developments until the current inventories are reduced. Big question is--Who is going to buy under the current market conditions? Answer--Well financed private investors who are still awaiting the condo misery index to ratchet upward.

Analysis: Two years of slow sales have killed many new condo development plans and placed many others on hold. The inventory glut has kept bankers away and Realtors searching for buyers. Developers across the southeastern U.S. have sought and received permission to push back their start dates because of the stale sales market. So,where is this housing sector headed? At the very,least,I expect the current situation to offer an investor's market for the next 12-15 months. Unit condo prices will be unlike any we have witnessed in the past 30 years. Many developments will simply "bundle" their empty units in packages of 10-20 or more for bulk purchasers. Once the private investors have had their pick of the condominium units left standing and the inventory is sufficiently reduced,it will be time to assess how best to sell future developments.

Fractional share ownership is a proven method that can aid buyers concerned about the rising costs of living at or near waterfront units such as those surrounding the Florida peninsula and Alabama's Gulf of Mexico shoreline. Owners share the burden of homeowner association dues,property taxes,insurance and association imposed special assessments. Typically,fractional ownership is sold in 1/6 and 1/25 shares.

The bottom line is that the current economy is not producing enough qualified users and revitalization can only occur when the affordability of a condominum apartment or unit is brought into the economic sphere of more people. Fractional sales will be the catalyst that energizes this market sector!