Real Estate Market Affect on Timeshare Values?

[dukebigtom]

It would be interesting to know what effect the true real estate market has on timeshare values over time and I suspect there are probably people who have historical data to show this.

In my neighborhood, housing prices have dropped between 10-15% within the last year and in some resort areas, the drop has been even greater.

Frankly I see the two as completely different markets, but it would be intreresting to know if there is any comparison data out there.

Any ideas?

BigTom

 

[Bill4728]

Even though timeshares and true real estate are both "real estate". The value of TS is completely disconnected from the value of real estate. The example of this is the resell value of TS on the SoCal coast. Condos with ocean views are about 2-3 million dollars. But, the TS on the coast ( like Marriott's Newport Coast) are being sold for an ave of 15K/week or ~$800,000 for the whole year. That is a huge disconnect!!

I agree with you "I see the two as completely different markets"

 

[dchilds]

... The value of TS is completely disconnected from the value of real estate. The example of this is the resell value of TS on the SoCal coast. Condos with ocean views are about 2-3 million dollars. But, the TS on the coast ( like Marriott's Newport Coast) are being sold for an ave of 15K/week or ~$800,000 for the whole year. That is a huge disconnect!!

I agree with you "I see the two as completely different markets"

I agree that they are different markets, but this is a bad example. I don't think I'd buy a $2 million dollar condo for $800,000 if I had to pay 52 maintenance fees every year for the rest of time.

 

[Dave M]

Actually, I think it's a good example. Although none of us (if we could afford the $800,000) would want to commit to the 52 weeks of MFs, Bill's comparison is one example of how different the two markets are. That's part of what makes comparisons very difficult.

For another example -

There is a healthy resale market for traditional real estate, albeit a market where many potential buyers are sitting back in the wings now. However, the timeshare resale market is known to a very small percentage of potential buyers, with no structure and with many more sellers - always, not just now - than buyers. That's why decent timeshares often sell for a nominal amount on ebay.

 

[hipslo]

I agree that they are different markets, but this is a bad example. I don't think I'd buy a $2 million dollar condo for $800,000 if I had to pay 52 maintenance fees every year for the rest of time.

I wouldnt be so sure about that - by the time you figure in real estate taxes, condo fees, insurance, utilities, maintenance, updating furniture and supplies every so often, etc etc, the 52 mfs might not look that bad.

Where I live, real estate taxes alone on a 2m property would approach 40k per year.

 

[johnmfaeth]

In general, the speculative housing markets have been deflated. The timeshares largely avoided that runup and deflation.

Areas such as the Northeast have had little price declines in real estate. Just a slowing from fear.

They are two worlds. In the caribbean, Marriott sales are at record levels and the prices charged keep getting higher, no recession there.