Timeshare Study Comparison - Resale vs Retail

Although published over a year ago this discussion is still relevant for timeshare owners who want to sell their timeshare. So, here’s a second look:

Very recently, a study prepared by Ernst & Young on behalf of the American Resort Development Association produced results worth looking at from a timeshare buyer and timeshare seller’s point of view.

To quote the article in the Orlando Sentinel: “According to the latest report, the average sales price of a unit fell 5.7 percent to $19,308 last year.” An average retail price for a timeshare was roughly $19,000? And they reported that maintenance fees rose 8 percent as well.

In comparison, a study recently conducted by Timeshare-Resale-Broker.com revealed that resale prices have sagged as well by 25 percent over 2010. The average timeshare resale price of a timeshare sold on that market was $6,865.92 which is a dramatic drop from the highs of 2007-2009.

From the report here’s more insight: ”

Wayne Stroman, the broker for Timeshare-Resale-Broker.com a division of Stroman Realty, Inc. cites two main reasons for the drop in the average prices.

Number one is the present global financial crisis that has caused residential home and condominium resale prices to fall in similar percentage drops in many vacation areas.  It could take several years for those markets to fully recover.”

Number two reason is the effect of “Relief Companies” having the owners pay them to take the week away. Again from Stroman’s report this is a critical analysis of what is happening: “The second reason is the Relief companies’ onerous downward pressure on timeshare resale prices.  They do this by massive direct mailings followed by sales presentations touting impending large mandatory resort assessments and increasing timeshare maintenance fees.  This fear tactic seems to work well to break down the owners desire to keep the timeshare property and motivates them to pay as little as $1000 and up to $4000 or more to be rid of it.  Also as a condition of the Relief proposition, the owner must sign over the deed without getting any equity in return.  This is not a sale.  It is a transfer of ownership and the timeshare must be paid off before the Relief company will be interested in taking the week and the transfer fee.

Then the Relief companies flood the market with the give away timeshare weeks they take from the owners.  Last year the low estimate is that they added over 25,000 weeks to the resale market. This further distresses timeshare resale pricing and you can see it in our lower sales prices. The Relief companies are taking massive equity out of the hands of the owners.”

Timeshare resales prices are falling thanks to the fear tactics relied on by the Relief Companies. Then adding insult to injury they rob the timeshare owner of the potential financial gain by taking away their week and giving it away on EBay for $1.

For timeshare buyers? This is the time to buy timeshares on the resale market. Why would you pay an average price of $19,308 when you could buy a timeshare on the resale market for $6,865.92!

Check out the details for yourself posted earlier in this blog.

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