The Plaza Resort & Spa
Got a phone call from a New Yorker. She read my old blog from 2008 about The Plaza Resort & Spa. Wow, that’s a very old one.
But The Plaza is still standing, and, funny enough, the units in this condo-hotel are unbelievably affordable. Yes, they are not as they were at the lowest point, but, honestly, they are again very close to the lowest point. Below is the table showing you resales of units in the resort since they have converted it to a condo-hotel in 2005-2006. This is the reason there were so few resales in 2005-2007. But then the crisis started creeping in. 2009 and 2015 were pathetic. Interestingly, when in March 2013 the prices for condo-hotels and condos started going up like dough on good yeast, we thought that it was the end of the crisis…
But it did not hold the steam and by the end of 2013 the market slowed down.
While there are general trends, every property is different in some way. For residential condos the worst year, I believe, was 2012.
But when I looked at the table below with the data for The Plaza resort, it was different. The worst years were 2009, and, surprisingly, 2015, 2017, and even 2018.
See for yourself. The Plaza Resort & Spa was converted to condo-hotel in 2005, so the first (and only) resale was in 2005. And check the price…
Sold Year Units Sold From $ Sold in $20s Sold in $30s Sold in $40s
2018 10 $25,000 3 3
2017 14 $28,000 2 5
2016 23 $30,000 14
2015 22 $25,000 1 9
2014 20 $34,000 2
2013 19 $47,500 2
2012 20 $42,000 4
2011 26 $35,000 5
2010 18 $31,000 5
2009 24 $28,144 1 3
*2008 3 $53,000
2007 1 $110,000
2006 1 $110,000
2005 1 $275,000
* Two other units were way more expensive, over $100K
Back to the caller.
– Is The Plaza Resort & Spa a good investment?
It depends on your expectations. If you expect decent rental income, then the answer is no. If you want to buy a property, listed for $39,900 for an ocean view studio, which originally was sold in April 2006 for $232,972, and wait when it reaches at least half the original price, then you walk away with triple the value.
So, if this is a game plan, then it is an excellent investment. Even if it does not make you a penny in rental income, as long as it covers the maintenance and taxes, you are great. Looking at 2013, at the numbers there, what if it would take 2 years to get to the half point prices off the peak of the market of 205-2006?
In 2004 right before the condo-hotel market was about to explode, I remember people walking into our office, curious why the prices were so low, and yet leaving with empty hands. They would satisfy their curiosity but would not act. I remember saying that it felt that the only way to sell a unit was to offer to pay for it and give an extra $5K to the buyer…
And 3-4 months later it exploded, and the very same people were paying significantly more for units, and the level of competition between the buyers was incredible… I think people are not motivated when there is a stagnant market. They start running like crazy when others are running.
Anyway, it is a slow season and a relatively slow market. Good prices. Not as low as they were even last year, but do not make a mistake thinking that it should stay this way. Check the inventory, we only have 17 units for sale, and Plaza used to have 3 or more dozen units for sale at a given time.
And the combination of rising prices (last year starting from the $20s, and this year only one for less than $40K) and lower inventory may mean that prices will go up.
And then comes a question: