Though analysts are citing a slow down in the nation’s real estate sector, the condo hotel market appears to be insulated from much of the market’s “cool down” trend.
The typical condo hotel buyer is usually a Baby Boomer in search of an ideal second home for retirement or an investor.
“Prospective buyers aren’t necessarily dependent on the sale of their primary home in order to purchase a condo hotel. Most clients are investors or jet setters looking for a ‘crashpad’. I believe that’s helping to keep the condo hotel market buoyant during this rough patch in the real estate market,” says Steven Roszell, owner and operator of CondoHotels.com.
Donald Trump’s latest venture in Hawaii, Trump Waikiki, is just one example that reinforces the idea of a stable condo hotel market. Sources reported that Trump Waikiki’s grand sales debut established an unprecedented record of securing more than $700 million dollars worth of condo hotel sales within hours. Corinne Huntress, sales director for Trump International Hotel and Tower Waikiki Beach Walk, confirmed that the majority of interested buyers of the 462 luxury unit condotel are investors, particularly Japanese investors, and local Hawaiians.
“Trump is obviously riding the wave of an area that still maintains a relatively robust real estate market,” says Roszell. According to a study released in July 2006 from the National Association of Realtors, the appreciation rate continued to rise by 18% in the Honolulu metro area in the first quarter of 2006 from a year ago. The NAR also reported that “a significantly higher percentage of mortgages were used to buy second/investor homes in the local area compared” to the national average.
Roszell also attributes the cooler weather to helping fuel the condo hotel market. “People have migratory inclinations,” says Roszell. “When the chill hits, people are reminded that warmer weather is better.” Since many condo hotels exist in top vacation destinations such as Hawaii, Florida, and California, Roszell believes that also will help to keep condo hotels on steady ground.
“Condo hotel projects are still going up,” says Roszell. “Developers wouldn’t continue to build them if they thought no one would buy them.”
