Timeshares never came back after the recession of 2008. Resales are not recovering value.

[OldGuy]

In 1996 I bought my first timeshare, at Vistana Orlando, 2BR, week 27 for $5200 resale. Six years later I sold it for $4,000. I would now have to pay closing costs to give it away.

Why?

Getting to the bottom of why would be a good first step.

 

[OldGuy]

Sounds like you found the needles in the haystack!

They were always there.

Big needles, little haystack.

 

[rickandcindy23]

When our friends bought here at Hono Koa about 15 years ago, they knew what they wanted, SOk, so they went to a broker, dickered over a couple of Sands of Kahana 2 bedroom units priced at $15-20K. Not one person would come down in price. That was resale, mind you. They found Hono Koa oceanfront and bought it for about $12K instead. Rick and I visited the resort (we are here now) 14 years ago, loved the place, and I just started watching ebay. Now we own 3 weeks here, all deeded to oceanfront units. Most were purchased over the last 10 years or so, and we paid about $2,000 per week with the closing costs included.

The fees have gone up substantially. They started at about $1,400, now they are $1,900.

We do love it here, but it is so hot in our unit without AC and facing the west. Hono Koa needs AC for summer. They could disconnect it in winter. I wouldn't use it.

 

[bogey21]

The only TS Week I sold for a real profit was a Summer Crown Suite Week at Monarch on HHI. Paid $25k Resale; used it for 5 or 6 years; and sold it for $42k...

I shudder at the thought of what Crown Suite MFs are likely to be today...

George

 

[dagger1]

OK, I sit corrected.

We were way ahead, way, way ahead, paying $4000/year for something that had outlived it's usefulness for us.

I should have kept them, so we could be getting even more way, way ahead. Think how far, far ahead we would be in another, say 30, years.



(20 years ago, when we were in our timeshare-lover denial phase, I used to say, "When we are done, we'll just walk away."

Long, difficult walk.

There is no doubt that by giving up TS’s you save a lot of money. But this only works for folks who stop traveling. Staying at home is always much cheaper for us than traveling with family and friends. But for those of us who travel, TS’s save us a lot of money. We don’t have to rent 2-4 hotel rooms and we can have a lot of family meals in (which saves us a lot of time as well.). But I totally agree, it makes zero sense to keep TS’s and never use them.

 

[dioxide45]

Obviously the financial crisis caused the timeshare market to crash. Many, even name brand timeshares that were selling for several thousand sold for $1 or perhaps a little higher. We paid $7000 for our first Gold Grande Vista in 2007. In 2009 we paid under $1000 for a gold Harbor Lake. I don't think those have recovered at all. Perhaps the Grande Vista could fetch $1500? I don't know, I don't track the prices these days. SVV Bella and Key West have seen a resurgence in pricing in the last 8-12 months. However, for the most part prices will never recover even with developer ROFR. THe developer doesn't want to pay too much either.

I think the issue now is simply oversaturation. With the two big run ups in the economy (in the mid 2000s leading up to the crisis and the near decade long one we are in now) cause the developers to over develop and over sell. Even Marriott has brought in a huge amount of new inventory with Pulse locations as well as the third tower in Las Vegas. Vistana is adding inventory in Mexico and south Kauai. They also built out Nanea. Hilton is building fast too. WIth so much inventory and those that bought in the 1990s and 2000s perhaps now looking to unload, you will only see more and more resale inventory on the market depressing prices. Only the weeks that rent for well above MF will still command decent prices. But when the next economic downturn comes around (and it will unfortunately, some time, some day) it will cause those resorts to lose their value as rentals and people will then try to unload them, depressing the prices lower.

 

[HenryT]

I think the biggest issue depressing timeshare prices now is the existence of the condo rental market (airbnb, VRBO,flipkey, etc.). There are a ton of people who still see the value of staying in a condo vs a hotel but why purchase a timeshare when you can go on the web and easily find condo rentals for any location you are interested in without the ongoing obligation of ownership? Many of these condos have similar amenities as timeshares

Also the over-supply of timeshare rentals in many locations results in timeshare owners renting their units at prices equal to or less than maintenance fees which is another reason resale prices are so low. Again, why buy when you can rent at a reasonable price?

 

[Roger830]

There are not many fixed week timeshares on the beach in south Florida.

We own weeks 4,5,6 at Hollywood Sands Resort on Hollywood Beach, purchased resale at an average of $4000 per week from 2000 to 2012.

Currently similar units are selling for $5000-6000. There are only 25 units, and only one 2-bed unit. Last year week 7 sold for $13,000. I know two of the losing bidders, one bid up to $12,000.

Prices for other seasons are lower, but units sell well. Surprisingly there is an active Fall season.

http://www.hollywoodsands.net/index.asp

 

[hurnik]

I am just talking resales here because I bought almost all of my timeshares resale.

I think Hilton and other companies with ROFR maintain their value somewhat, but what about pre-2008 to today? Have they maintained value, when inflation is figured into the equation?

Disney is a phenomenal thing to own. When resales are going for $200, I might sell. I might not. 500 points X $200 is a lot of money. But I rent for about $9-11 over MF's.

In regards to Hilton (since I have 5 resale contracts in my portfolio):

None of them have "held" their value, except possibly the last two.

I'll have to double-check my numbers, but I'm fairly certain:
In 2011 I purchase 3,400 points resale in Vegas (gold week) for $3,200
Today I'd be lucky to get $1,000 for that. probably $500 or give away.

In 2011 I purchased a 3 BR Gold in Vegas 7,000 points for $9,500
Today I'd probably get maybe $4,000 for that.

In 2015 I purchased a 5,000 point 2 BR Gold in Vegas for $2,500
Today I might be lucky to get $1,500 for that

In 2017 I purchased a 7,000 point 2 BR Platinum at Flamingo for $2,500 That was an anomaly
I could probably sell this one for $5,000. Maybe more? (Flamingo has no ROFR so they tend to go slightly higher)

In 2019 I got a "free" HGVC Seawatch on the Beach. It's week 32 "gold" = 3,500 points. 2 BR fixed week.
Probably would also have to give it away if/when I sell it, but it's an affiliate so maybe get $500 for it (but it's not prime week).

Excluding my anomaly purchase, all have not "held" value if you mean it's less than what I paid for it. But not necessarily $0 except for 1 or 2.

Disney, on the other hand.....

 

[bogey21]

There are not many fixed week timeshares on the beach in south Florida.

Years past I owned at two in Deerfield Beach, the Emerald Seas and the Birkshire Beach Club. Both Fixed Weeks/Fixed Units right on the beach. Not luxury but location was fabulous. I bought and sold both for under $2,000...

George

 

[scot111]

any resale timeshare that is being used ... is a good investment

 

[JudiZ]

Cindy,

You really made me think about what we have owned/own. Our first timeshare was a non-branded place in Orlando. At the time, it was the closest timeshare to Disney. Bought in 1996 for $3000 and sold five years later for $2000. Similarly, purchased a non-branded unit in Phoenix in 1998 and sold it for the same $1500 I paid for it. Our biggest loss was a Marriott we bought in 2000. Paid developer price, no loan. A few years later, DH was laid off and unemployed for nearly a year. We sold it for half of what we paid but I think I have a black hole in my memory of that time because I can neither remember what we paid or for what we sold it. All I knew is that we weren't going to have to default on MFs. Also why I feel so sad when people can't get out from underneath a timeshare. Today, we have two non-branded summer in New England weeks and 231,000 Wyndham points. All were purchased in the last 6 or 7 years and all cost less (together) than $2000. I can assure you that I, like their previous owners, will get even less than I paid for them. And yet their intrinsic value is much greater to me than what I paid.

But that goes back to your initial question. Why? I do think that, in no small way, the Internet with its eBay, Redweek and even TUG has put so much information into our hands that the perceived value of a product, in this case, timeshares, is transparent for those who would research. So instead of my paying what the intrinsic value of something is based on my own beliefs or experiences, I have the opinion of its value from millions of others. And those millions of others are not timeshare salesmen. Every time somebody comes on TUG and says they just bought a timeshare and have buyer's remorse or just curiosity and we all respond "rescind, research and buy resale," we change the marketplace. Granted the Internet was around before 2008 but the explosion of information and access and the way we do business these past ten years has profoundly changed.

An interesting question; thanks for raising it.

Judi

 

[Sugarcubesea]

At Pinestead Reef where I own 3 weeks, 2 summer and a flex week. The summer weeks still go for big bucks ($9K to $17K) and the recession did not slow that down. These summer weeks are almost impossible to buy because the original owners pass the unit down to their kids.

I was at the owners update this week and when we did our round robin and introduced ourselves. Everyone but me has been coming here for 30+ years and they got their units from their parents when they died.

 

[DannyTS]

any resale timeshare that is being used ... is a good investment

if you did not overpay for it

 

[DannyTS]

To me the value of a timeshare is: usage + rental + internal exchange + external exchange. It seems that the most important factors are the first two, of course people are looking for quality and location, hopefully with reasonable MF. The internal exchange (if allowed for the resale owners) can also play an important role but only in the limited cases where the price per point is the lowest of that system. The external exchange value is very interesting. This is where I actually extracted the most value so far, my exchanges have been great considering the total cost. The very unpredictable nature of these exchanges and the suspicion that they may come to an end one day makes people not value the traders much, even those with good trading power and low MF.

 

[scot111]

And yet their intrinsic value is much greater to me than what I paid.

how much is spending time with family and friends worth?
how much is knowing the quality of your accommodations worth?
how much is having access to $200,000/ $300,000 condo at the click of a mouse worth?

 

[rickandcindy23]

At Pinestead Reef where I own 3 weeks, 2 summer and a flex week. The summer weeks still go for big bucks ($9K to $17K) and the recession did not slow that down. These summer weeks are almost impossible to buy because the original owners pass the unit down to their kids.

I was at the owners update this week and when we did our round robin and introduced ourselves. Everyone but me has been coming here for 30+ years and they got their units from their parents when they died.

An anomaly in the timeshare world. Sounds like a real gem of a resort.

You would think a resort in Myrtle Beach, Orlando, Hawaii, etc., would keep its value. If I sat in on a timeshare presentation at Westin Nanea today as a timeshare newbie, I would probably imagine the value would hold. I would be impressed with the beautiful resort and think that buying could be worthy of the price tag. But we check in on Friday for our first visit, and I have no desire to go on a presentation.

I think the barrage of commercials on radio and TV about timeshare exit companies are affecting the resale market. More people getting out, convinced that the product is going to put their kids into the poorhouse and realizing they aren't using it much, if at all. Mostly because they never figured out how to use it.

 

[CalGalTraveler]

@OldGuy just like an old car or boat, if you have no use nor enjoyment from it, getting rid of it is absolutely the right thing to do. Ever try to sell an old car or RV when you don't want it anymore? Those don't have much value either. And they are hard to sell. But as you astutely point out, giving away such items that originally cost thousands avoids the cost of ongoing maintenance, insurance and storage payments. Reducing one's burden can be a good decision.

No doubt, staycations will always economically pencil out to a better deal. But that is not the same experience as traveling to a destination. When teens and college students are at home, it is difficult to see them because they are off with friends and activities. When you have them on a vacation to destination, that forces them to take time out from their schedule and that's quality family time. I wouldn't change that experience for anything.

 

[buzglyd]

I bought all mine after the crash so I'm not too concerned about what I'll get when I sell.

 

[scot111]

I would probably imagine the value would hold

I find it hard to believe the big developers haven't figured out a way to profit from the resale market.
It seems it could make their retails sales better.
Lower the default rate.
Provide better financing ...
Perhaps some corporation will figure it out ... fairly soon they'll have access to negative interest rates.

 

[Sugarcubesea]

An anomaly in the timeshare world. Sounds like a real gem of a resort.

You would think a resort in Myrtle Beach, Orlando, Hawaii, etc., would keep its value. If I sat in on a timeshare presentation at Westin Nanea today as a timeshare newbie, I would probably imagine the value would hold. I would be impressed with the beautiful resort and think that buying could be worthy of the price tag. But we check in on Friday for our first visit, and I have no desire to go on a presentation.

I think the barrage of commercials on radio and TV about timeshare exit companies are affecting the resale market. More people getting out, convinced that the product is going to put their kids into the poorhouse and realizing they aren't using it much, if at all. Mostly because they never figured out how to use it.

I really feel that it’s because it’s an independent, that’s owned by the owners that it can command these prices for the summer weeks. It’s run very well

 

[klpca]

Mostly because they never figured out how to use it.

Personally, I believe that this is a big part of the problem. If people could use their timeshares the way that they planned to use them, they would be happy with their purchase. Some don't bother trying to figure it out, some try but can't get the hang of how to use their ownerships, and others can't keep up with the changes that the developers make to usage (and I think this is terrible, but developer/managers and owners are at odds with each other when it comes to timeshare usage) - in the end you wind up with a large number of unhappy owners who think that their timeshare is worthless. And, to them, it is because they can't figure out how to use it.

Tuggers feel differently because we're timeshare nerds who love the game. It's great for us, not so great for others.

 

[Sugarcubesea]

I bought all mine after the crash so I'm not too concerned about what I'll get when I sell.

I also bought all of mine after 2008 and all were resale.

I bought units that I would at least be able to give away for free if I needed to

I own in locations that would cost me double or more to stay in those same locations for less.

 

[OldGuy]

There is no doubt that by giving up TS’s you save a lot of money. But this only works for folks who stop traveling. Staying at home is always much cheaper for us than traveling with family and friends. But for those of us who travel, TS’s save us a lot of money. We don’t have to rent 2-4 hotel rooms and we can have a lot of family meals in (which saves us a lot of time as well.). But I totally agree, it makes zero sense to keep TS’s and never use them.

I am fairly certain that more people want to get rid of their timeshares because changes in their lives/lifestyles, and other reasons relating to wants and desires and needs, than because they are deadbeats who shirk their financial responsibilities.

We used six weeks a year in our business travels . . . CO, OH, and FL . . . then we retired from that business in 2004. But, we kept going to FL, so kept our TS. In 2011, we bought a place in FL, so started spending the entire Winter there instead of just a couple of weeks. At that point, I got serious about the divesting. We spend the whole Winter where we used to spend a couple of weeks, for about the same amount of money as the couple of weeks cost.

We've purchased at a local resort in FL, twice, flipping one of them.

Like I said, it's about changes in us, and I'm sure that's true for a lot of people trying to get rid of timeshares.

 

[OldGuy]

@OldGuy just like an old car or boat, if you have no use nor enjoyment from it, getting rid of it is absolutely the right thing to do. Ever try to sell an old car or RV when you don't want it anymore? Those don't have much value either. And they are hard to sell.

Kinda funny, we have three old cars and two old boats, and I have never thought of getting rid of any of them.

But, bad example on the selling an old car . . . . .

A couple years ago we wanted to get something with a 6.0 L engine to pull our camping trailer back and forth from Florida, and then use it as our daily driver in FL, and, besides, our 5.3 L Yukon had 225,000 miles on it anyway. So, I got a 6.0L older Escalade from The Russians. Same color as our Yukon, same drivetrain except for the 6.0L, same seating arrangement.

The first day they were parked together at our house, the neighbors across the street called and said they wanted the Yukon . . . how much? The next day they brought over hundred dollar bills. They said they wanted it because they knew how we take care of things.

So, a lot easier, and a lot more money, than getting rid of timeshares.