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What effect do you think the economy will have on buying, selling, renting?

skimble

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Nobody has a crystal ball, but we all have timeshares in common.
The depressed economy is obviously going to effect us.... whether it's maintenance fees, rentals, buying or selling, we're going to feel it. This is real estate after all.
I'm putting out the call for speculation.
What do you think is going to happen?
 

sernow

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We've already seen resale prices fall dramatically, just watch eBay.

Developer sales have slowed. By all indications the prices for weeks that developers ROFR has dropped. If the developers were seeing demand, they would be snatching up these low priced units.

It's too soon to tell about rentals, but I have seen a dramatic decrease in inquiries about a rental I still have available over the last month. Expensive vacations are going to get cut out if you're worried about your job, your investments and savings, or if the ends will meet at the end of the month.
 

tombo

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It is a great time to be a buyer if you can ride the recession/depression out, and as long as you can continue to afford to pay the MF's until times get better. It is a very bad time to be selling timeshares (retail or resale). Renters are harder to come by too, and the competition to rent weeks is lowering rental prices.

The bad economy combined with high air fares have dealt island travel a double whammy. ROFR prices (if ROFR'd at all),resale prices, and rentals prices at Hawaii locations and the Caribbean are the lowest I have ever seen them. Many, many Island weeks are renting for less than the cost of MF's if they even rent at all. You can trade through RCI and II for Hawaii and the Caribbean easily now with weak traders that would never have been able to trade for an island week in the past.

Timesharing like the rest of the economy is going through a tough time. Most prices and locations will hopefully recover in the not to distant future. Having said that, I am not sure that travel to island locations will ever return to the high numbers of vacationers we saw over the last couple of decades due to extremelly high air fares for the foreseeable future. Long term predictions say that air fares will get higher (and remain higher) than most Americans can afford to do on an annual basis. Whether the predictions are right or wrong, I have sold all 3 of my Hawaii weeks. I am going to my timeshare in Aruba in 2009 (already purchased tickets) and I have rented out my timeshare in St Maarten for 2009. If I can rent out my Aruba week in 2010, I will go to St Maarten in 2010 (if I can still afford air fare prices). If I can't afford to go to St Maarten and if my Aruba week won't rent, I will sell my last 2 island locations for any price I can get. I hope to remain an owner of all of my currently owned weeks which are within driving distance of my home. I don't own a week at a place that I don't personally love to stay, and I don't own a week that I really want to get rid of, but if times get tough........
 
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mpizza

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I believe we will see a decrease in new resorts as construction financing has dried up. I am involved in commercial real estate transations and have been notified that three 2009 projects will be delayed and may never come to fruition due to unavailability of construction loans.

I have already received a 10% increase in the maintenance fee at one of my resorts to due rising energy costs.

The good news is that there are alot of deals on ebay and more availability for previously hard-to-get trades.

Maria
 

skimble

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I'm seeing the same thing in terms of renter inquiries. They have ceased. I've also seen the prices on Ebay drop.
I have to wonder how the developers will weather this. And, I have to wonder how long it will last. If we do the bailout AKA "rescue", it's going to lead to higher inflation. This, in turn, will cause maintenance fees to go up, the dollar to go down. High maintenance fees lead to more sales, more defaults, and... higher maintenance fees for the hoa. A devalued dollar, increases the fees in other countries dramatically, but where you'd normally see an increase in property value, the depressed world economy would offset this.
Yes, you may be able to pick up some great values on weeks, but will they be worth it? If maintenance fees go up 15-30% (which is conceivable) value goes down. For most resorts and resort areas, it's safe to say, there's a correlation between the value of a timeshare week and the maintenance fees. As maintenance fees go up, value goes down (and there are some exceptions.)
One of the values in owning a timeshare is the low cost investment in annual vacations. That maintenance fee typically beats market price by 50-100%. So, if your maintenance fees are $700, you'll typically see these weeks offered for $1050-$1400. When those prices go down significantly, so does the perceived value of your ownership. When prices on the outside (even At the resort) can compete with maintenance fees, you own junk.
My point is... there's the potential for a vicious spiral here. Fees have to go up, rentals will go down, values will go down. When fees equal rentals, people default, and fees go up again.
 

mamiecarter

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I have stopped buying even at ebay prices

Economy is a disaster. I don't even bid on things on EBay anymore.Timeshares are gonna tank!!!!
 

abc31

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I just let a Manhattan rental go for $100 per night. After months on 3 different rental sights, I posted it on the LMR here on TUG. All I was asking on the other sights was $150 per night. Any other time I have rented out Manhattan units, I easily got $200 per night.

I also think purchases are sure to tank. I'm sure there will be plenty of people who don't pay their maintenance fees wich will cause the rest of ours to go up.

It's a big mess.
 

Patri

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I've been actively watching for a particular resort and was outbid a couple times. Now I'm going to hold off. The future is just too unsteady to get saddled with maintenance fees that might spike. Still in closing for a t/s I got for a steal and it's nearby. That one we may use and our other one keep trading, but beyond that I think I'm going to ride for awhile. Bargains will be out there even when the economy gets better.
 

JMAESD84

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One thing that we might expect to see is a greater availabilty of exchanges, if owners are unwilling to pay the other related travel expenses during tough economic times, deferring the use by depositing their units.

Hopefully, owners will do this with an independent exchange company like RedWeek who doesn't have a built in rental operation tied to (and fleecing) the exchange inventory.

Deposit a week with RCI and get two years to make your exchange, if RCI wants they will turn around and rent out your deposit denying it to other member depositor/exchangers.

Deposit a week with RedWeek and get three years to make you exchange and your unit remains in the exchange pool for others (RedWeek doesn't rent out deposits, but allows other member depositor/exchangers too).

Full Disclosure - I do not work for either RCI or RedWeek.
 

sernow

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"Bargains will be out there even when the economy gets better."

So true.
 

ace2000

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Deposit a week with RCI and get two years to make your exchange, if RCI wants they will turn around and rent out your deposit denying it to other member depositor/exchangers.

Deposit a week with RedWeek and get three years to make you exchange and your unit remains in the exchange pool for others (RedWeek doesn't rent out deposits, but allows other member depositor/exchangers too).

Full Disclosure - I do not work for either RCI or RedWeek.
Personally, I'll take the RCI ''sure thing' vs. the gamble of RedWeek still standing 3 years from now.
 

reddiablosv

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Rentals are dead.

:( I have two weeks for rent on Redweek and My resortsnetwork. One is a 5 star resort on the big Island of Hawaii for Thanksgiving week. The other is an oceanfront unit on Kauai for New Years week. Both are prime units offered at prime time. No luck! I am renting them for cheap. In a normal year both would have been rented by now! I guess I may end up depositing them and hope for a good exchange. Ben
 

JMAESD84

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Personally, I'll take the RCI ''sure thing' vs. the gamble of RedWeek still standing 3 years from now.
I don't see why you would think RedWeek would be any more likely to fail. The real issue is one of deposits and who gets them and makes them available to the members.

Each business model receives deposits for free and makes money when someone else pays to get them.....not much risk in that.
 

x3 skier

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What goes around comes around

Great for those with spare cash and lousy for those who do not, just like any other time. Of course, more of those who don't have than do have right now.:)

The older I get, the less I worry since I have been through enough good and bad times to be sanguine about it. Trouble these days are too many news sources chattering away and every one of them has to scream DISASTER or BONANZA to try and be heard. Seems a lot like the story of the boy who cried wolf.

Cheers
 

AwayWeGo

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[triennial - points]
This Is "Political" (But Maybe The Grand Pro Will Give It A Pass -- We'll See, Eh?)

THE BANKERS ON THE WABASH
(To the tune of "The Banks of the Wabash")

Round & round the old inflation spiral keeps turning,
And a bag of groceries costs more every day.
You may never taste that steak for which you're yearning.
The administration’s phased it all away.

For everything you buy you have to pay more,
And for everything you sell you’re getting less.
The rich are getting richer, & vice versa.
Our economy is really in a mess.

But the price of corn is high along the Wabash,
And old Agri-Biz is really making hay.
Through the sycamores the Cadillacs are gleaming,
And the bankers on the Wabash shout “Hooray!”

[Parody lyric by Ben Cole of The Indianapolis Star -- Sung at March 1973 Gridiron dinner, Washington DC, when Earl Butz was Sec. Of Agriculture.]

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​
 

irish

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in the past 4 years i have always rented at least 2 of my units by this time. this year NO TAKERS. so, i deposited 2 with II will use 1 and turn in the other 2 for marriott rewards. between my kids and myself we will use the points for short stays at various marriott hotels so i don't feel it has been a total loss.
NOW, the increasing m/f's are another problem.
 

Mel

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I don't see why you would think RedWeek would be any more likely to fail. The real issue is one of deposits and who gets them and makes them available to the members.

Each business model receives deposits for free and makes money when someone else pays to get them.....not much risk in that.
It's not a question of Redweek failing, but of their ability to sustain their business model in the current economy, and to deliver future value for your deposits.

If 75% of the people depositing their 2009 weeks don't intend to exchange them for other weeks in 2009, who uses those 2009 weeks? That is the issue. While I don't like the idea of RCI renting out deposits, I don't want them sitting empty either. Assume those exchangers intend to use weeks in 2011, and do the same with their 2010 weeks - assuming the economy will improve some by 2011. For 100 deposits made in 2009, 25 will be given back out as exchanges, 75 will be held over. Then you get another 100 deposits in 2010 with another 75 held over. In 2011 even if all 100 people deposit, you have 100 deposits to satisfy demand for 250 exchanges! 60% of you requests can't be filled. Now, some of that slack can be taken up by developer inventory, but the developers may not want to simply give RCI or any other exchange company their weeks to use - they may want them to produce income. Where does RCI get the money to pay for that inventory? From the rentals this year of what could be significant excess inventory.
 

brucecz

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I don't see why you would think RedWeek would be any more likely to fail. The real issue is one of deposits and who gets them and makes them available to the members.

Each business model receives deposits for free and makes money when someone else pays to get them.....not much risk in that.

RCI Points even gets paid $26 for each week deposited for non RCI Points weeks deposted for the non Points weeks for Points program.

Bruce :D
 

falmouth3

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I was browsing eBay last night. I'm seeing weeks selling for 1/2 of what they were getting earlier in the year. There are some incredible deals out there. And, IMHO, going to get more plentiful.

This economy is scary. If people are losing their homes, they are not likely to be planning vacations.

Sue
 

dms1709

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The rising airline costs will be a factor. I think most people that like to travel will pay the high costs once a year, but will consider cutting back for other trips. What used to be a $ 400.00 ticket now is $ 700.00 and for most families will no longer be a possibility.

Donna
 

nazclk

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Prices on Ebay

I think the prices on ebay are reflecting the stock market, sell, sell, sell,
dump, dump, dump at whatever cost. :whoopie:
 

skimble

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I think the prices on ebay are reflecting the stock market, sell, sell, sell,
dump, dump, dump at whatever cost. :whoopie:
It may sound like a great investment now, and compared to a year ago, there are amazing prices to be had... but value has changed. If you are looking to get a unit that you plan to use, a bargain can be had. If you're a speculator and anticipating growth in equity or anticipating a unit to rent out, it might not happen.
I hate to give a dismal outlook, but the more I learn about the greed and the magnitude of this tangled web, the more I think there might not be a recovery--Western capitalism could be the former USSR communism.
The insurmountable greed that got us all into this mess is still ever present. The $700 billion bailout increased to $800 billion with PORK--- that's like my wife and I coming together over our family budget, needing to seek a loan to get out of a debt spiral. She refuses to agree unless I buy her a new dress and a day at the spa, and I insist on getting a big screen TV. If people just did the right thing instead of being self-serving, we wouldn't be in this mess.
 

Running Man

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Things will slow down. We as a society have been living beyond our means. Those with money will benefit from the down turn of the economy. Those that are living on borrowed money will finally have to face their day of reckoning. We should all be living within our means - if you can't pay for it with cash, then don't buy it.

Cheers
 
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