Marriott Resale Prices low??

[chemteach]

I've been watching Marriott prices for Newport Coast Villas and Palm Springs area for about ten years now. (I own Starwood, and often considered purchasing Marriott, but never did so.) NCV platinum annual weeks sold for $16K+ ten years ago, and now sell for less than $8k. Palm Springs resorts seemed to sell for around $8k ten years ago, and now sell for $500 to $2000 for a platinum annual 2 bedroom. Four questions:
1) Do these prices pass ROFR??
2) Why such a decrease in resale?
3) Is it super difficult to reserve a spring week in Palm Springs? I have always read that it is difficult to reserve summer weeks at NCV.
Thanks in advance for any feedback.
4) Why such a drastic price drop?

 

[VacationForever]

I own at DSV I (Desert Springs Villas I). This phase does not have ROFR. Since I own 2 weeks, I call at 13th month right at 6am PST and have been able to get the 2 weeks for Spring (March). If I wait until 12th month (for single week), I can book at 6am, and are all gone by 6:03am.

Your observation that the price is now at $500 to $2000 is not what I am seeing for DSV I for a red week. In Redweek, the going rate is around $5K to $7K.

I believe a drop in the overall prices for these Marriott weeks is due to the inability to be enrolled into DC.

 

[vacationtime1]

Let me respond to your questions 2 and 4.

Starwood/Vistana resale prices have also crashed during the past ten years. Westin Mission Hills (very comparable to Marriott's Palm Springs/Desert properties) has seen resale prices fall off a cliff. The numbers you suggest for MDS are comparable to WMH prices.

imo, this is a result of MF's becoming too high compared to rental prices.

 

[ljmiii]

NCV's season calendar is somewhat odd - the first 5 months are gold and all the rest are platinum (ignoring weeks 26 and 52) unlike some similar resorts where gold is in the spring AND the fall. So anyone with a platinum week and kids is competing for the same three 'good' months of summer. But from what I've read NCV isn't in the first tier of MVCI resorts with availability issues. I don't really follow the Palm Springs properties so I can't help you there.

As for ROFR, most sales pass and some properties (as VacationForever noted) don't ROFR. But if you have a property, season, and unit size in mind you should look through the ROFR thread and/or websites to look for 'real' selling prices.

IMHO MVCI resale prices have seen such a drastic price drop because of the way MVCI has chosen to implement the Destination Point system. There are many facets to this but the most important are 'stripping' enrolled weeks of their status when sold and reducing the availability of Marriott II trades. II's decision to introduce fees for trading into larger units has also affected the value of lock-off weeks.

Lastly, there is the issue of ever increasing MFs which affects all timeshare systems. But while my HGVC weeks have held their value and my DVC points have increased in value (despite their impending RTU date) the resale price of my MVCI weeks have plummeted around 75%.

 

[vacationtime1]

Your observation that the price is now at $500 to $2000 is not what I am seeing for DSV I for a red week. In Redweek, the going rate is around $5K to $7K.

Redweek data is obviously asking prices; we don't know what the ultimate sales price really is.

An 2bd platinum eoy unit at Marriott's Desert Springs II just went for $547 in a recent eBay auction by seans0302, a reasonable seller. Of course, eBay is the bargain basement, DSV II is slightly less desirable, and this is just one data point. But I agree with OP's assessment of the current FMV.

 

[chemteach]

Let me respond to your questions 2 and 4.

Starwood/Vistana resale prices have also crashed during the past ten years. Westin Mission Hills (very comparable to Marriott's Palm Springs/Desert properties) has seen resale prices fall off a cliff. The numbers you suggest for MDS are comparable to WMH prices.

imo, this is a result of MF's becoming too high compared to rental prices.

Sorry - I wasn't trying to compare Westin and Marriott resale values... The Westin resale prices plummeted years ago for non-mandatory staroption weeks. I was just surprised by what seems to be a much more recent decrease in Marriott resale prices. Ten years ago I wanted to buy into Marriott, but resale prices were a bit too high for me. Now I can afford to purchase a week, but wanted to check on whether it made sense to purchase - or if something in the system made Marriott not work as well as it had in the past.

 

[BocaBoy]

In my opinion, the big reasons for the drop in MVCI resale prices are the out of control maintenance fees, the financial and real estate crash of 2008-2009, the inability to enroll these weeks in the DC, and perhaps the biggest one of all--the internet. With the internet, it is now possible for a buyer to easily find distressed sellers and that drives all prices down. Going forward, the high and increasing maintenance fees are what will prevent resale prices from increasing a lot.

 

[JIMinNC]

In my opinion, the big reasons for the drop in MVCI resale prices are the out of control maintenance fees, the financial and real estate crash of 2008-2009, the inability to enroll these weeks in the DC, and perhaps the biggest one of all--the internet. With the internet, it is now possible for a buyer to easily find distressed sellers and that drives all prices down. Going forward, the high and increasing maintenance fees are what will prevent resale prices from increasing a lot.

But are MVC maintenance fees really increasing at a faster rate than other comparable resort systems like Vistana Signature Experiences, Hilton, etc.? I know my MVC fee increases over the last 3 years have been quite a bit lower than what I experienced in my previous 16 years in the Sunterra/Diamond system.

 

[Xpat]

But are MVC maintenance fees really increasing at a faster rate than other comparable resort systems like Vistana Signature Experiences, Hilton, etc.? I know my MVC fee increases over the last 3 years have been quite a bit lower than what I experienced in my previous 16 years in the Sunterra/Diamond system.

It certainly feels that way based on the different weeks I own with MVC, HGVC and Wyndham.

This year's increase at Canyon Villas, DSV II and Newport Coast were all above 5.5%

See the 7-year compound annual growth rate at these different resorts...

Resort / 2017 increase / 2010-2017 CAGR
Marriott Canyon Villas / +6.8% / +5.11%
Marriott Grand Chateau / +2.1% / +2.78%
Marriott DSV II / +5.9% / +5.64%
Marriott Newport Coast / +5.7% / +4.76%
HGVC Las Vegas Blvd / +2.4% / +1.71%
Wyndham Bali Hai / +3.0% / +2.61%
Wyndham National Harbor / +2.8% / +2.27%
Worldmark / +5.0% / +4.39%

 

[bogey21]

My how times change. Many years ago I bought Weeks at Sabal Palms, Harbour Club, Heritage Club and Monarch. I spent something like $62 thousand for them. I ended up selling them all after using them for 5 or 6 years. My gross proceeds were something like $80 thousand. After commissions I about broke even.

George

 

[Saintsfanfl]

Marriott maintenance fees are still really low for decent weeks compared to the annual fees for equivalent points to book the same week. Marriott has no problem selling points on a daily basis. It's a good product but it's expensive. I've seen resorts no where near the same quality but with higher fees per sq ft. The resale weeks are still a bargain. It's definitely cheaper to buy than it used to be and obviously more expensive on the annual fees.

 

[VacationForever]

I know TUG often compares MF with rentals. MF is still inexpensive when compared with hotel retail rate, which is what I use to compare with. However I am not thrilled with the high and increasing MF that we are now committed to spend each year, especially now that we are retired. I am planning on selling my Marriott weeks because those are my highest MFs timeshare, but not for a few more years.

 

[JIMinNC]

I've seen resorts no where near the same quality but with higher fees per sq ft.

Bingo...the last year that I have a maintenance fee bill for our old 2BR at Diamond's Kaanapali Beach Club - 2015 - the annual fee was $2090. By contrast, according to the Historical Maintenance Fee spreadsheet, the maintenance fee for a 2BR at Maui Ocean Club (original) for that same year was $2032. While I've yet to stay at MOC, I am very familiar with the property, and there is no question it is superior in most every respect to Kaanapali Beach Club - better location, better grounds, better pool, better furnishings, etc. Both properties have mini-kitchens instead of full kitchens.

One other thing...our first year of ownership at Kaanapali Beach Club in 1999, the maintenance fee was $686 annually. By 2015 it had grown to the aforementioned $2090. That's an annual compound growth rate of 7.2% over 16 years.

 

[BocaBoy]

But are MVC maintenance fees really increasing at a faster rate than other comparable resort systems like Vistana Signature Experiences, Hilton, etc.? I know my MVC fee increases over the last 3 years have been quite a bit lower than what I experienced in my previous 16 years in the Sunterra/Diamond system.

My comments on maintenance fees apply to all the major systems I know of. It is a timeshare problem and not just a Marriott problem. I don't feel better being gouged because others systems gouge you too. The choice is not just whether to buy Marriott or another system, it is whether to buy a timeshare at all. And it was not always this way. Marriott timeshare fees in the early hears even went down occasionally. The problem really started about the time inflation screeched to a halt 10 or so years ago. It is ironic that fees were better controlled in high inflation times than they are today. This year is our 30th year of owning Marriott timeshares.

 

[RLS50]

My comments on maintenance fees apply to all the major systems I know of. It is a timeshare problem and not just a Marriott problem. I don't feel better being gouged because others systems gouge you too. The choice is not just whether to buy Marriott or another system, it is whether to buy a timeshare at all. And it was not always this way. Marriott timeshare fees in the early hears even went down occasionally. The problem really started about the time inflation screeched to a halt 10 or so years ago. It is ironic that fees were better controlled in high inflation times than they are today. This year is our 30th year of owning Marriott timeshares.

With respect I still disagree with any assertion that inflation ended 10 years ago. It did the exact opposite. It surged once the economy collapsed and the FED threw out the playbook they operated under for decades and went into full time money creation mode. Real inflation...inflation that impacts real stuff that people need and buy has been running at a 5+% clip for almost 9 years now. The CPI report has been adjusted multiple times since 1980 and no longer reflects true cost of living increases for the average person.

Let's keep it even more simple...in any fiat economy...anywhere in the world or anytime in history...it is impossible to have no inflation. By it's very nature when you create more of something, it adds to the supply and makes what was there already less valuable.

It isn't just timeshare maintenance fees that have surged. Everywhere the average consumer looks, things are more expensive, smaller in size for the same price, or companies have changed their products to use cheaper parts or cheaper ingredients to minimize their final product cost charged to consumers. Why? To keep pace with real inflation...which will ALWAYS track the real growth in money supply in a fiat currency.

This is not a political, ideological, or opinion discussion. It is just math.

http://www.forbes.com/sites/periann...lation-dont-bother-with-the-cpi/#5a3a1109118b

 

[taterhed]

Redweek data is obviously asking prices; we don't know what the ultimate sales price really is.

An 2bd platinum eoy unit at Marriott's Desert Springs II just went for $547 in a recent eBay auction by seans0302, a reasonable seller. Of course, eBay is the bargain basement, DSV II is slightly less desirable, and this is just one data point. But I agree with OP's assessment of the current FMV.

Doubt that will pass..... DSV II has ROFR

MVC resorts that do NOT require a ROFR: (14 resorts)

Birch at StreamSide
Desert Springs Villas I
Douglas at StreamSide
Evergreen at StreamSide
Fairway Villas at Seaview
Frenchman’s Cove
Harbour Club
Harbour Point
Heritage Club
Monarch
Ritz-Carlton Club (RCC), St. Thomas
Sabal Palms
Sunset Pointe
Royal Palms

Some recent data (chuckle on the $575)
Resort Date Season Usage Type View Price Result Name
Desert Springs Villas II 3/5/2016 White Annual 2BR N/A $825.00 Failed samara64
Desert Springs Villas II 3/2/2016 Red Annual 2BR N/A $6,200.00 Failed Mark
Desert Springs Villas II 11/10/2015 White Annual 2BR N/A $2,200.00 Failed samara64
Desert Springs Villas II 8/31/2015 White Annual 2BR N/A $2,100.00 Failed saintsfanfl
Desert Springs Villas II 6/14/2014 White EOY 2BR N/A $699.00 Passed Saintsfanfl
Desert Springs Villas II 4/30/2014 White EOY 2BR N/A $575.00 Failed seaport104
Desert Springs Villas II 4/30/2014 White EOY 2BR N/A $575.00 Failed seaport104
Desert Springs Villas II 4/2/2014 Red Annual 2BR N/A $5,000.00 Failed Okies
Desert Springs Villas II 4/2/2014 Red Annual 2BR N/A $5,000.00 Failed Okies
Desert Springs Villas II 11/18/2013 Red Annual 2BR N/A $4,300.00 Failed S1b000

 

[elleny76]

I guess this is the time to buy Marriott Weeks? Just want to use those weeks for Aruba every year. I have been thinking about it for like 8 months now but I still no sure about it.

 

[BocaBoy]

With respect I still disagree with any assertion that inflation ended 10 years ago. It did the exact opposite. It surged once the economy collapsed and the FED threw out the playbook they operated under for decades and went into full time money creation mode. Real inflation...inflation that impacts real stuff that people need and buy has been running at a 5+% clip for almost 9 years now. The CPI report has been adjusted multiple times since 1980 and no longer reflects true cost of living increases for the average person.

Let's keep it even more simple...in any fiat economy...anywhere in the world or anytime in history...it is impossible to have no inflation. By it's very nature when you create more of something, it adds to the supply and makes what was there already less valuable.

It isn't just timeshare maintenance fees that have surged. Everywhere the average consumer looks, things are more expensive, smaller in size for the same price, or companies have changed their products to use cheaper parts or cheaper ingredients to minimize their final product cost charged to consumers. Why? To keep pace with real inflation...which will ALWAYS track the real growth in money supply in a fiat currency.

This is not a political, ideological, or opinion discussion. It is just math.

http://www.forbes.com/sites/periann...lation-dont-bother-with-the-cpi/#5a3a1109118b

With all due respect, any economist would say that is just not true. The big worry in economic circles the past 8 years has been potential deflation, not inflation. I guess if the facts don't support you, just make up your own.

 

[RLS50]

With all due respect, any economist would say that is just not true. The big worry in economic circles the past 8 years has been potential deflation, not inflation. I guess if the facts don't support you, just make up your own.

Make it up? You are free to believe otherwise, I respect your right to do so and no hard feelings. I did not reply to create an argument nor mean to show you any disrespect. What I am speaking to is the basic math involved in any fiat currency, anywhere. Traditional economists don't deny that, they merely defend hedonic quality adjustments used to suggest improvements in the service or technology negate the actual dollar increase in cost. This is why reported inflation is only running at 2% a year, while money supply growth has been at least 5% a year since 2008.

Anybody who works and supports a family knows costs have went up across the board on almost everything a family needs and uses from day to day. Some things have increased a little, some have increased a lot.

It isn't just maintenance fees that have been increasing 5% a year or more.

Peace.

 

[VacationForever]

The basic issue is that the measure of inflation uses a limited basket of goods (CPI) whereas in reality, real cost of living has risen much faster than the reported inflation (CPI) for some groups or population/location. If you want to read what makes up CPI you can read it up here: https://www.bls.gov/cpi/cpifaq.htm

 

[BocaBoy]

The basic issue is that the measure of inflation uses a limited basket of goods (CPI) whereas in reality, real cost of living has risen much faster than the reported inflation (CPI). If you want to read what makes up CPI you can read it up here: https://www.bls.gov/cpi/cpifaq.htm

Thank you, but I am quite versed professionally in these measures. But here are some facts. I just bought a new car for just about the same amount as a comparable model cost me in 2001. Real estate prices tanked in 2008 and are only now approaching their previous level. Cars and housing are two of the largest components in any family's budget. Oil and a natural gas are still MUCH lower than before the crash in 2008, and energy is a major cost element for many if not most things. I could go on and on, and there are certainly things that have gone up in price besides timeshare maintenance fees, but on balance inflation has been extremely low in recent years, so much so that the Fed has actually been trying to increase inflation to avert the disaster that would likely come with a period of deflation. In my own life, I don't notice a lot of difference in the aggregate between now and 10 years ago.

 

[VacationForever]

Thank you, but I am quite versed professionally in these measures. But here are some facts. I just bought a new car for just about the same amount as a comparable model cost me in 2001. Real estate prices tanked in 2008 and are only now approaching their previous level. Cars and housing are two of the largest components in any family's budget. Oil and a natural gas are still MUCH lower than before the crash in 2008, and energy is a major cost element for many if not most things. I could go on and on, and there are certainly things that have gone up in price besides timeshare maintenance fees, but on balance inflation has been extremely low in recent years, so much so that the Fed has actually been trying to increase inflation to avert the disaster that would likely come with a period of deflation. In my own life, I don't notice a lot of difference in the aggregate between now and 10 years ago.

I did go back and change my post to include "for some groups or population/location". For example, CA minimum wage has been revised many times over the 10 years and I think it has gone up 30% or more. CPI is nationwide and CA cities form part of the population captured in CPI. For those living in CA, costs have definitely gone up faster than the reported CPI, and especially for those who rely on services that are provided mainly by lower wage workers - eating out, cleaning services, home care/assisted living facility, timesharing...

 

[JIMinNC]

I did go back and change my post to include "for some groups or population/location". For example, CA minimum wage has been revised many times over the 10 years and I think it has gone up 30% or more. CPI is nationwide and CA cities form part of the population captured in CPI. For those living in CA, costs have definitely gone up faster than the reported CPI, and especially for those who rely on services that are provided mainly by lower wage workers - eating out, cleaning services, home care/assisted living facility, timesharing...

Yes...this is an important point I've made before when discussing this same issue. Just because the overall inflation rate - whether you accept the official CPI or not - is a certain stated low percentage does not mean that everything is going up at that low rate. Overall personnel costs have been rising faster than the stated rate of inflation, so any business that is people-dependent has seen costs rise much faster than the 1% to 2% inflation rate that has been reported in recent years. Last fall, the Census Bureau reported that real median household income increased 5.2% from 2014 to 2015, the largest percentage recorded by the bureau since it began tracking median income statistics in the 1960s. Even though overall median U.S. income had been relatively flat in real terms since the mid-1980s until 2015, total personnel costs have still been going up, due primarily to healthcare costs. While the rise in healthcare costs for companies did slow a bit over the last 4-5 years or so, those costs are still rising at a rate considerably higher than the CPI. Then as you say above, in states that have been willing to raise the minimum wage, wages have risen on top of the rising benefits costs. With housekeeping services and other resort staff being such a large portion of every timeshare's budget, it's not hard for me to conceive that a 5% increase in costs is somewhat reasonable.

While it's true as BocaBoy says that energy costs have not been rising - and that has helped the overall CPI stay very low - the fluctuation in the price of oil probably has minimal impact on the typical timeshare budget. If you think about the major controllable costs in a timeshare budget - housekeeping, maintenance, and administration/front desk - all three are heavily impacted by staffing costs. At our Barony Beach Club, these are three out of the top five expense categories - the other two are Property Taxes and the Management Fee. Property taxes are set by the city/county and are out of the control of the HOA. The Management Fee is set contractually as a percentage of the expense base. So of the controllable expenses, rising staffing costs have a major impact.

 

[catharsis]

1. [working pop growth + wage increase + productivity gains] accounts for the increase in total output

or to put it another way, labor costs don't feed through to inflation because less people are required to deliver something than the year before, and so on.

2

The Management Fee is set contractually as a percentage of the expense base.

- so the organisation in charge of controlling and setting cost levels is paid more as costs increase, and TUG is having difficulty working out why costs are increasing? - Really?!

 

[MOXJO7282]

I've tracked Maui, Grande Ocean, Monarch, NCV, and Myrtle Beach fairly extensively for some time, buying and selling all but Maui which I never sell once I find a good deal. Resales pricing have definitely come down in the last 10 years but they have stabilized over the last few years it seems to me because I just don't see many really good deals in the marketplace and this has been true for some time. When I do I jump on it because I see them as far and few between with a lot of others looking for a good deal like i am.


Also I think many of us have bought Marriott units in 2006-2010 that pricing still holds up. I know I bought my two GO OF gold units for $7500 each while I was selling one for $13800. Bought on ebay and sold on Redweek.

We also only see a fraction of the resales so it's hard to say what the true average resale price is. I know the GO I sold for $13800 was being resold by a HHI attorney for like $18k. So I was buying at $7500, selling at $13800 and someone else was paying $18k. I would imagine that still happens today.