Why Is There No Resale Market?

[spirit Junior Member Find all posts View Profile Close spirit]

Ooops

Got my forums mixed up. Meant Timeshare Forums but both are wonderful.

[chriskre Super Moderator Find all posts View Profile Close chriskre]

Thanks to everyone here on TUG.

Nice to have you here but this is not TUG.

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

One big fallacy is considering eBay to be ''the'' timeshare market. It is not. It is only a very small piece of it, although the rest of the market is fragmented into even smaller pieces, it is probably one of the biggest visible pieces and thus the one people look at most.

Yes, the eBay sub-market is indeed trashed, and likely was done on purpose by the PCC's flooding that market so that they could use it as an example in their sales presentations. I watched that happen from a front row seat when I held the resale portfolio for my HOA. We sold on several online auctions, including the old Yahoo auctions, eBay and others. Blue weeks always sold, usually in the $200-300 range but some in the $500 range, as of course did better weeks. The eBay market worked, then. With hurricane damage and other things to get the result up to par afterward, we were off the market for quite a few months. When we looked to go back on, we saw these new vendors flooding the market and prices going down. Only later did I learn that these vendors were pumping out PCC inventory. It was the PCC's, not the economy which killed the eBay market.

But that is not the only place the market has been deliberately flooded. RCI's rental to the public program has flooded the rental market, made it more difficult for owners to rent out there own weeks, and depressed rental prices. Fortunately in my area, rentals are still strong and I can rent my summer week for a nice profit but I read too much of that not being the case in some other areas.

Changes in exchange programs, primarily at RCI have also put more inventory out there on the market. One longtime local reseller told me that it was extremely rare to hear anyone saying they were selling their timeshare because they were upset with RCI until RCI really started in with the rentals and with points, at which time that became the most common reason she was hearing for people selling. It was not that they mentioned points or rentals. What they mentioned was that the exchange system was no longer producing the results it used to. When Points Lite came out, resorts in our area were deluged with calls from exchanger owners wanting out. Fortunately most such owners did hold on and pay their m/f last year, but that increasingly is not the case this year, and will add to the crisis. RCI's bean counters have looked at ways to goose short term profits without considering the overall impact on the sustainablility of the timeshare system. That is typical of bean counters who suck in most industries as they have incredible tunnel vision that does not allow them to see bigger negative impacts of something that looks likie a money spinner when considered in isolation.

From resorts in my area, the far largest part of the resale market is for own to use buyers, not exchanger buyers. Most of this market is localized rather than online and it is quite fragmented. I have from time to time posted an analysis of resales on the broad market from my area, and while prices are down some and total number of sales are down some, the broad resale market is in much better shape, at tleast in our area, than the eBay fragment of the market. It would be interesting if someone really looked at other areas to see if this pattern holds up.

The challenge for resorts will be to find enough off season and shoulder season own to use buyers to soak up the disillusioned exchangers who are wanting out, or to switch them to other exchange companies that will serve their needs. The difficulty is that many of the HOA's may not be up to that. This has been a slow motion train wreck from the changes in the industry imposed by RCI, but the train is now starting to come off the rails.