swot analysis second home market

SWOT ANALYSIS

SECOND HOME MARKET

PREPARED BY

Adam Greenfader

DIAGNOSTIC MARKET ANALYSIS May 21, 2005

Brighton Country Club Dorado, PUERTO RICO

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AXYON

ALL RIGHTS RESERVED ®

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Table of Contents

The Goal of this Study .................................................... Pg. 3

Scope of Study .................................................... Pg. 3

About Axyon ………………………………… Pg. 3

General Assumption ………………………………… Pg. 4

Market Research Sources ................................................... Pg. 4

Market Area .................................................... Pg. 5

Housing Supply & Demand ………………………………… Pg. 5

Key Facts Brighton ………………………………… Pg. 6

Current Competition ………………………………… Pg.7-31

S.W.O.T

Strengths ………………………………… Pg34-41

Weakness ………………………………… Pg.42-49

Opportunities ……………………………….. Pg.50

Threats ………………………………… Pg.50

Conclusion ………………………………… Pg. 32

Addendum

Past Sales Report



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Key Facts: Brighton Country Club

Project Name: Brighton Country Club

Location: Dorado, Road # 693, Puerto Rico

Construction Year: 2000

1st phase: 88 Units

Units Closed: 4

First Close: 2005 (54 months)

Options: 53 (Not in Bank /Qualified)

2nd Phase 58 Units

Units Closed: 4

Average Closings P/ Month: N/A

Unit Type: Townhouses, 2 story

Construction: Concrete

Finishings: Excellent, multiple options

Unit Models: 3,023 SQFT (Living Area)

Average Sales: $477,300

Recreational Facilities Under Construction (Gazebo, Basketball,

Club house, Olympic Swimming)

Other: Controlled Access



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S.W.O.T ANALYSIS (Strengths, Weakness, Opportunities, Threats)

Strengths: Internal forces that could positively affect the sale of the project

1. Strength: Location

Brighton Country Club location is very good. It is located walking distance to several

shopping malls. The Dorado town center is approximately .5 miles from the project.

2. Strength: Small Community The project is relatively small compared to its competitors. There are a total of 85

homes. This small size creates a feeling of intimacy.

3. Strength: Controlled Access

Brighton Country Club has a controlled access system. This controlled access will

help BCC residents distinguish itself from older communities.

4. Strength: Unique Design

The homes in Brighton Country Club have a very unique exterior design. The homes

feel as if they are part of another world.



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5. Strength: One Entrance

Brighton Country Club has only one entrance and egress. This will limit vehicular

traffic and control circulation.

6. Strength: Home Finishings

The Brighton Country Club home finishes are significantly more elaborate than its

competitors. These finishings include central air conditioning, marble floor tiles,

granite counter tops, and gypsum board moldings.

Weakness: Internal forces that could negatively affect the sales of the project

1. Weakness: Distressed First Phase

The first phase of Brighton Country Club has suffered many setbacks. Potential

clients will be hesitant about purchasing in Brighton Country Club.

2. Weakness: Temporary Entrance

The temporary entrance at Brighton Country

Club is aesthetically displeasing. The area

that belongs to Brighton should be

maintained.

Weakness:Abandoned buildings

Brighton Country Club abuts to an

abandoned building. The building is

not closed off.



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4. Weakness: Adjacent commercial/residential community

The adjacent commercial and residential

community “over-power” Brighton Country

Club’s quaint ambiance. Special care should

be taken to block the views with landscaping

and walls.

5. Weakness: The Sales Center

The sales center at Brighton Country

Club is difficult to find. It is located far

from the project and has no signs

welcoming visitors.

6. Weakness: Option Program – Home Finishings

The option program at Brighton Country

Club appears to over-complicate the

management of the home delivery. In

Puerto Rico, options are not common.

This is due in part to contractual and

management limitations.



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7. Weakness: Construction Control

As of present, the construction crew

and residents are not separated.

Construction vehicles and tools can

be seen through resident’s area. This

makes the residents very

uncomfortable.

8. Weakness: Working Guard House

The guard house should be activated as soon as possible. This will give the residents a

feeling of protections.

9. Weakness: Perimeter Fencing

The project should close off its

perimeter. This will provide

security for the residents.



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10. Weakness: Recreational Facilities

As of present, the recreational facilities

at Brighton Country Club are not built.

The facilities are a key sales element in

any project. Brighton Country Club

should build a temporary signs to

highlight the key areas throughout the

project.

12. Weakness: Single Carport

Many of the units have only 1 covered carport.

This can be viewed by prospective clients as an

inconvenience. This is especially true from the

target market that are comparing Brighton with

single family homes that all have double garage.



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Opportunities: Positive external forces that could affect the sales of the project.

1. Opportunities: New entrance

The new entrance will help Brighton Country Club improve its curb appeal.

2. Opportunities: Improvements to commercial facilities

There is a significant amount of commercial development under construction adjacent

to the Brighton Country Club project. This development will help the area and make

Brighton Country Club increasingly attractive.

3. Opportunities: Marina Facilities

There are plans to build a marina in the Dorado area. The developer Frederico Stubbe

has received community support for his development and should begin construction

in 2006.

Threats : External forces that could negatively affect the sales of the project

Threats: Future Developments:

There are numerous residential projects under development throughout the Dorado

market area. Each new project will draw prospective clients away from Brighton country

Club.

Threats: Crude-Oil Prices

In the past two years, the price per barrel of crude-oil has more than doubled. If prices

remain high this will have a major impact on Puerto Rico’s economy.

Threats: Status Issue

The local economy is currently suffering from “status paralysis”. The “status” issue has

divided the local government. There is a rift between the legislative and executive

branches. If the two government bodies do not seek peace, the short/mid term growth

forecast of the island will be limited.

Threats: Community Opposition

Puerto Rico is currently undergoing a strong anti- development movement. The proposed

site has suffered from this phenomenon.



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Threats: Higher Interest Rates

Interest rates are at historic low levels. Any significant rise in rates will make housing

less affordable. A 2% increase in interest rates is equivalent to $600 additional monthly

payment on a $477,000 mortgage. This payment increase would require an additional

$23,000 more of yearly income.

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