TS vs real estate prices

[Steamboat Bill Banned Find all posts View Profile Close Steamboat Bill]

Is there any correlation to the correction in the hosuing market and TS resale prices?

[tonyg Goomba & Super Moderator Find all posts View Profile Close tonyg]

Not much if any. It's more a question of the economy and other monetary factors. Homes are more a necessity and timeshares are discretionary. There would be a tendency for values to move downward together, but upwards movement usually eludes timeshares.

[Glitter Brunello Super Moderator Find all posts View Profile Close Glitter Brunello]

Timeshare sales people love to equate them with Real Estate, often displaying sales prices of nearby condos, etc... to justify t/s prices and investment, etc... My answer is 'that's fascinating, but I don't consider t/s as real estate, I think of them as discount travel...'

[cluemeister Member Find all posts View Profile Close cluemeister]

Some similarities

I think developer sales will drop off significantly during a recession, similar to new home sales fluctuations.

During an economic slowdown, a $3000 resale timeshare may sell for $2400, which would represent a 20% correction in the market. That would be similar to the real estate market.

But we never saw the increase in timeshare resale prices, such as the doubling of real estate values over the last 6 years.

So I would say the drop in timeshare resale prices would closely mirror the real estate market, but not the increases.

[Bill4728 Super Moderator Find all posts View Profile Close Bill4728]

The Marriott in SoCal often talks about the local real estate prices as a reason to spend so much on the Marriott TS. Saying at 52 weeks at NCV was 1.5 -2.0 million and a comparable condo was over 2.5 million. So maybe there is some comparison but a resale at NCV would only be $800K.

How can you explain a condo being worth 2.5 million and a resale marriott being $800K?

[Glitter Brunello Super Moderator Find all posts View Profile Close Glitter Brunello]

How can you explain a condo being worth 2.5 million and a resale marriott being $800K?

I recall someone doing an analysis about how living at NCV full time might actually make financial sense... assuming you didn't mind sweating bullets every week trying to reserve next year's consecutive week

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

The Marriott in SoCal often talks about the local real estate prices as a reason to spend so much on the Marriott TS. Saying at 52 weeks at NCV was 1.5 -2.0 million and a comparable condo was over 2.5 million. So maybe there is some comparison but a resale at NCV would only be $800K.

How can you explain a condo being worth 2.5 million and a resale marriott being $800K?

The explanation is quite simple. If an equivalent condo is worth $2M and a resale Marriott for 52 weeks equates to $800k, that's because the timeshare plan is value destructive to the condo. By eliminating the timeshare plan, the market value for the condo would immediately be appraised at $2M.

The same thing happens in business all the time. There are many businesses whose market value as determined by its stock price is lower than the assets in the company including the cash on its balance sheet and the underlying Real Estate less debt. This happened to Kmart and Sears which is how Eddie Lampert created value in Sears Holdings.

This is why I am for the idea (supported by PerryM and instituted in states such as North Carolina) of a timeshare plan being terminated after 30 years. Then, the timeshare can either be reformed and offered to the current owners or sold off as whole condos. Either way, it unlocks the underlying real estate value for timeshare owners.

I am, in general, for a free market. But, if ALL US timeshares instituted this policy, then timesharing would improve by leaps and bounds over the course of only one generation (30 years). As it is now, it will continue to limp along with bad HOAs making horrible, value destroying policies.

The other thing that needs to happen is to eliminate the non-profit HOA. For profit HOAs would ensure that their timeshare resort was operating at peak efficiency and generating a positive return to owners. Or, they would go out of business. Some HOAs need to be taken out to pasture and shot.

[Steamboat Bill Banned Find all posts View Profile Close Steamboat Bill]

This is why I am for the idea (supported by PerryM and instituted in states such as North Carolina) of a timeshare plan being terminated after 30 years. Then, the timeshare can either be reformed and offered to the current owners or sold off as whole condos. Either way, it unlocks the underlying real estate value for timeshare owners.

I missed the KMart Sears stock buying opportunity.

I own DVC and they have a 40 year expiration. This has not hurt sales at Disney. I often wonder what will happen at the end of the time cycle, but I may not be around for that long