Plaza Resort & Spa 1st Quarter Market Report

Plaza Resort & Spa 1st Quarter Market Report


30 condo-hotel units for sale as of April 2, 2017. Starting price $34,900 for a city view studio to $89,500 for an ocean view studio. Actually, there are direct oceanfront studios for less than $89,500.

There are 8 direct oceanfront condo-hotel studios for sale. Lowest priced studio (308) is $59,900. Then there are 5 direct oceanfront studios from $62,000 to $69,000, and then two more  in the $80s.

If you are looking for a logic n pricing, there is none. For example there is a direct oceanfront unit with a balcony for $65K, and then there is a city view unit without a balcony for $69K.

Prices reflect the urge for owners to sell. Some will have to wait, some will reduce the price even lower.

Sales in Plaza Resort & Spa

However, without looking at sales, we are missing on important parameter. We need to know the absorption, i.e. how much time should it take to sell 30 units even if there are not new listings coming.

In 2016 23 condos changed hands. Starting price from $30K for a… direct oceanfront unit.  Top price was $70K for the largest corner oceanfront studio (513 sf) with two balconies and a glass cooktop.

Which under normal circumstances would mean that it would take more than a year to sell the existing inventory.

However 8 of the units were sold to the investor. So, while they were sold, it was because the investor bought 10 units there.

How often investors come and buy chunks of 10 units? Actually, never.

So the real number of sold uinits was about 15. It means that if the pace does not increase, we would need two years to sell 30 units even if no new listings would come to the market. 2-year inventory is a scary number.

Are the sales in the first quarter of 2017 give us reasons for optimism? How many condo-hotel units were sold this year so far? 0, Zero, Zilch, Nada

How many units sold in the first quarter of 2016 (before the first unit was sold to the investor)? 6. So if this is an indication of the trend, the pace dramatically slowed down.

1st Quarter is not a benchmark. It is a slow season in condo-hotels market, and it can easily happen that next quarters would bring more activity and more sales, but… we do not know it. It may or it may not.

If we look at condo market (residential condos) and compare it to condo-hotel market, in the first quarter of 2017, we will notice a slight decline of less than 5% (225 units in 2017 and 236 in the 1st quarter of 2016).

So far this year 29 condo-hotel units changed hands in Plaza. It is 30% less than in the 1st quarter of 2016 when 41 changed hands.

It does not seem that the market is gaining any strength this year, it is, unfortunately, the opposite.

Was this 6 units be a fluke? It does not look this way. In 2015 there were 5 sales in the 1rst Quarter; in “dead” 2014 there were 3 sales; in 2013 – 5; 2012, when we really scratched the bottom, there was 1 sale.


Considering that we only have 136 condo-hotel units for sale on the Beachside, the total inventory is small. It is simply that Plaza Resort units constitute 22.4% of all condo-hotel units for sale on the market, while Plaza with its 323 units is 13% of the total number of condo-hotels. Even this calculation is questionable, as 100 units in Plaza have never been sold to the public, the Bank now owns it, they are not part of the market, so the share of units in Plaza to the total number of condo-hotels units on the Beachside is about only 9.4%.

This disproportionate number of sales is what drives the prices down, and it differs from the rest of condo-hotel market and, probably, is the result of maintenance and Management issues.

What does it mean for Sellers and Buyers?

Sellers do not have good news. The market for years now have been too timid, and it is a step forward, two steps back dance. We were hopeful in March 2013 that prices started going up, and oceanfront units were selling for just over $100K, we since retreated back to the levels of previous distressed years, and do not seem to be getting out of it today. Sales of residential condos indicate that we should be close to a warmer market. Condos are usually go up in value the first, and residential condos are doing better, but when the condo-hotels will see the change in the trend is still unknown.

For Buyers / investors it should be the greatest news, but I doubt it would. They do not see the value and the opportunity due to various reasons.

A hotel management company buying from the Lender the commercial space, Front Desk operation and 100 unsold units, could bring a welcome change, but chances of it today, considering that there is a class A lawsuit brewing are slim.

About Jon Zolsky

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