If you are one of the six or seven New Yorkers who were not in Aspen last month, you may not be aware of the explosion in the newest real estate craze – fractional ownership. In that upscale resort, there are twelve new fractional properties coming on stream; virtually all new commercial development is of partial ownership properties.

It’s not just an Aspen phenomenon. Sales of fractional properties in America soared to $513 million in 2003, up 38% from the year before, and are estimated to top $1 billion this year.

Why this sudden boom? There are many reasons. First, we must note, as do all the participants, that fractional ownership is not the same as timeshares, which have a sullied reputation. Interestingly, no one can quite cite the differences; in truth, the distinction is somewhat in the eye of the beholder. Mainly, the new fractional market is high-end, and includes a service level not associated with time-shares.

Fractional ownership is concentrated in resorts; almost half are in ski towns, with the rest found in beach or golf locations. The properties are aimed at people who frequent a popular destination, but who don’t want to invest a sizeable amount of money to have a second home there.

Also, the fractional-interest resorts are being developed by organizations like Ritz-Carlton and the Four Seasons that offer a deluxe level of service and a brand synonymous with luxury vacations. These outfits, too, inspire confidence that a long-term investment will hold its value.

How does it work? Taking the Ritz-Carlton property in Aspen Highlands as an example, you can buy a one twelfth interest in a specific three-bedroom “residence” (they are not called condominiums because, in truth, they are somewhat small) for about $320,000. You gain the right to use the unit for two weeks determined ahead of time (these are peak-season prices), and then for another two weeks during the year.

You also pony up approximately $11,000 per year in charges, which cover numerous amenities. These include concierge service, twice-daily maid service, a van that ferries you in and out of Aspen, and many other niceties such as a health club and spa. The management will store your personal effects for you and decorate your suite with photos and keepsakes before your arrival; the record to date is 32 cartons of personal effects kept for one family. Naturally, they will also stock the refrigerator with your favorite foods.

Sound pretty good? It does to a lot of people, evidently, who would otherwise have to plunk down several million dollars for similar ski-in ski-out digs. That’s a lot of money to invest if you only plan to ski two or three weeks a year. Also, few people want to be bothered with keeping up an expensive house in a remote location.

Further, one of the main attractions is the opportunity to swap your Aspen weeks for time elsewhere. Ritz Carlton currently has four properties and is planning to open several more. Two are currently in ski resorts; the others are in St. Thomas and Jupiter, Fla. If you are tired of snow and feel like going south, you simply call the management and put in a bid to go to St. Thomas. Though such interchange isn’t guaranteed, it often works out, especially if you can travel off-season.

So far, the value of fractional shares in the Aspen Highlands unit has appreciated; the company estimates the yearly increase at about 7% to 8%. Similar properties in other ski areas have recorded similar gains, in line with local real estate values.

The developers cite this as an advantage that fractional interests have over time-shares. Historically, a great many time-share interests lost value. The reason was simple – the popularity of the programs was such that too many developers tried to get in on the action, and created an oversupply.

This hasn’t happened with the fractional properties – but it could. The number of units coming onto the market in Aspen is just one example of potential overbuilding. Though there is a natural scarcity of great ski areas, and slim opportunity to build new units in the developed ski resorts, the more peripheral sites may be vulnerable to excess.

Over time, as in any real estate investment, it is probably wise to go with the high end, and with the most coveted locations. For some of us, the decision could well be based on the availability of superior room service; after all, we’re from New York.