The recent AOPA Aviation Summit provided me with a lot of opportunity to visit with pilots – airplane owners from all sections of the country. Most of my discussions focused on residential airparks, naturally enough.
Fortunately, I was able to speak with a number of airpark developers as well as individuals who are currently living on airparks or looking for a place to purchase. A couple real estate agents who specialize in homes on airparks were also on hand for me to share ideas with.
One developer from Texas said he had sold three lots during October alone and business had held up quite nicely during the last year. Another airpark developer explained that while his business had been quite slow during the last year at his upscale airpark, recently traffic had increased tremendously with more lookers than had shown up in a long time. As a result, he said airpark lot sales totaling more than $2 million had closed in the last 90-day period.
Two real estate brokers specializing in residential airparks told me they had experienced ongoing sales activity during the last year.
Not every report was as glowing!
One individual explained that his development was at the stage where the entire infrastructure was in place except paving the runway. He said there had been only a few people showing up to examine the airpark and none of them had made an offer for a lot. He planned to hold up on the paving project until he saw more definite prospects in the near future.
Fortunately, he said finances weren’t a problem for him although he would like to get back the $1 million he and partners have invested to date.
He asked what course of action I would suggest and I offered him a couple scenarios:
- Run some fire sale ads, I said. Tell people the status of the airpark and indicate you’ve slashed lot prices because you are under bank pressure to get some action.
- The other option from my viewpoint is to sit tight and hope that things will turn around in his area in the next year and he can sell lots then.
One other idea I mentioned was to build a spec house so prospective buyers see there is some construction underway.
After thinking of the ideas for a day, he came back and said his plans for the foreseeable future are to sit tight and wait for the market to turn up. I can’t argue with that idea, as long as his finances are acceptable. I’ll be looking forward to hearing from him a year from now!
Regardless of the current sales pace, it appears to me that there is still a lot of interest out there among potential buyers and developers.
I had one fellow send me an email asking where he could find property that would allow him to moor his ocean-going yacht and have an adequate runway near by. I mentioned his needs to a couple of real estate agents from Florida and both said they had the perfect spot for him and would contact him.
Like most people in aviation, I’m an optimist and it appears to me things have hit bottom in the residential airpark business and things are moving forward again. From conversations at the AOPA gathering, I think my optimism is not misplaced.
Lots of people are out there looking for bargains, trying to find those whose finances are stretched beyond their capabilities. That certainly is one area where potential buyers are showing up but from most of the folks I visited with they don’t seem to be ready to cut their prices just to sell a house.
Our past surveys indicated most airpark residents are middle aged or above, well established in their business or profession and financially upper middle class. More often than not their kids are gone and their living expenses are down. They don’t have to sell!
The net result is that residential airpark property probably is and will remain a good investment into the future, at least from what I’ve seen and heard.
Let me know your thoughts and experiences (comment below) so I can share them with others.