Hi-I'm wondering when, or maybe if, the resale market will get re-established-any reasoned opinions? I keep thinking there is value going begging, or else there was a mammoth bubble.
Anita
Aloha Anita,
Perhaps a focus on the conditions that would have to converge to cause an increase in resale prices would be useful in addressing your question.
Right now, supply greatly exceeds demand by so much that prices for many categories are zero or negative. In order for demand to exceed supply, either supply must diminish or demand must increase or both must occur.
Supply will not stop growing until all new development stops.
Let’s assume (hope) that demand picks up someday. Contributing factors include increase in size of the demographics for which timeshares have potential value and an increase in the percentage of each of those demographics that have the sense of wealth to commit to perpetual MF expenditure.
The following illustration is close to current reality. An ocean front condo at Kauai Beach Villas (whole ownership not PAHIO timeshare) sells for at least $520K. Divided by 52, that is a capital cost of $10K/week. Condominium association fees are less than timeshare MFs but not trivial.
Imagine buying the equivalent PAHIO KBV ocean front unit for an inflated price of $2K. You could buy 52 of those and pay MFs for about a dozen years before the total cost curves would intersect. If you believe that timeshare values will recover to at least 1/51 price of whole ownership in significantly less than a dozen years, then there is value going begging. Otherwise, it was all a mammoth bubble.
Jack