Price Range is puzzling ??

I'm looking on RedWeek.com at 2/2 Bedroom (High) Weeks for sale at Marriott Ocean Pointe, Palm Beach Shores, FL, I'm puzzled by listed prices ranging from $9,500 to $29,500. Are not all these weeks essentially the same value, with a master suite and ajoining lock out? Why would there be such a range of prices for what is essentially the same type of unit?

I am considering joining Red Week, but am puzzled by this. Any thoughts? Thanks Jim

Jimo:

Understand that I don't work for RedWeek.com nor have any dealings with the sales side of things here, but I would venture that the price range has to do with what original owners want for their unit...based on any number of things, including what they originally paid for it as well as what they believe to be true about the "value" of a timeshare.

I agree with you that it is puzzling, in much the same way as the price is when you go into a timeshare sales presentation. I'm confident that once you discuss your needs with a RedWeek.com representative, they will be able to assist you.

Again, the prices listed have more to do with the original owner than RedWeek.com. Let me know what you decide to do and happy travels!

The price of 2 bdrm units in the high season at a beach front resort in Florida will vary significantly based on the location of the deeded unit within the resort. The most expensive will be those with an ocean front, next will be those with an ocean view, and the least expensive will be those with only a garden view . It is location, location, location, even within the same resort even when all varibles are the same except for the location within the resort.

The Red Week for sale list contains some 20 or so units varying in price as stated. Several of the listed units say Ocean Front. Many on the list say Ocean View. A few say 'Water View' (not sure what that is). I understand your point, but it still seems to me this would not justify this much price varience. At Ocean Point Resort, I think all units in each view catagory are of equal value.

Thanks for your input. Jim

jimo26 wrote:

The Red Week for sale list contains some 20 or so units varying in price as stated. Several of the listed units say Ocean Front. Many on the list say Ocean View. A few say 'Water View' (not sure what that is). I understand your point, but it still seems to me this would not justify this much price varience. At Ocean Point Resort, I think all units in each view catagory are of equal value. Thanks for your input. Jim

Price also might reflect supply and demand of the resort and time owned, however just because someone lists a high price doesn't mean it will sell for that price ..... many people expect to get the money back they paid a developer which doesn't happen in the real world of timesharing and some people merely want to make a profit so they list it very high not knowing that it will not sell for anywhere near the listed price or at all .... some timeshare weeks can't even be given away.

Here is my 2 cents.

1st there are big differences in units/time of the year/view within a single resort, etc... For instance one resort we go too often (in Hawaii) breaks its units out by Mountain View (Hint dry hills and parking garage - eckkk) and Ocean View (Actual Ocean and View as well --- totally cool Brah!). This difference alone can nearly double the resale value and presentation value of a room. They also have two bedroom units, two bedroom lockout and a three bedroom lock out. Finally some of the two bedrooms are top level and have vaulted double height ceilings. Then, in the case of Hawaii, all weeks are often high season but New Years and Christmas are Platinum +. Just about any large property has this level of price complexity or greater.

Often, listings on Red Week either do not cover this level of detail or are purposefully vague because a 3rd party is posting on Red Week and they choose to be vague, the seller is clueless (Such as an inherited or estate resale), or they genuinely are either sloppy or ignorant of the property variables. None of these issues are really correctable or related to Redweek. Moral here is you need to know what you are buying... and I mean exactly. You need to do detailed homework or you may get a very bad purchase.

Now, if in fact the listing is for an identical week or class of week, unit size, view etc... and the price listed varies radically; this is quite easy to explain.

Some 3rd parties just want an up-front fee to "represent" you or help you sell your unit. They will post crazy high prices or let you believe that you can get what you think you can get for a unit. Behaviorial Economics is a fascinating field that covers this phenomenon. We "anchor" on a price. Real Estate is an emotional product and dang it, I paid XXX dollars for a week and that is my minimum selling point. It does not matter that the resale prices of time shares have dived due to the speculative nature of the investment or general carnage to individuals cash flow this recession has caused. In short, people are simply dillusional about the value of their "presentation priced" time share. Really, our minds gear us to this dillusion. This was Auntie Flow's gift to us, it's worth XXX dollars and nothing less. My mom paid XXX for the time share - if I sell it for less am I slamming mom? We are messed up at our core and it's OK to personalize money - - we all do. Just attempt to recognize the emotional side of money here.

Having said all this, it is a great time to buy on the secondary market. We just picked up a fantastic property in one of our favorite California Properties for less than 25% of the presentation price. Rentals for this pencil out (after maintenance fees) to an 8% return on the unit at close to the lowest rental rates going on this site. Timeshares are not investments but for the first time in decades, many could actually qualify as such. We picked a 2 bedroom unit with an Ocean View in the resorts second less desirable time period. We didn't want the Platinum week as we have kids and wish to go to the Theme Parks in Winter or Spring Break. Availability is actually a bit better than the Platinum weeks and we have been and stayed at the property several times before purchasing. We stated the price we would pay to several buyers (It was far below listed secondary prices) and we just waited for someone to want to sell it to us. We had no time line.

Hope this covers your question. Know what you're buying and be aware of the lunacy of our otherwise organized minds.

jimo26 wrote:

I'm looking on RedWeek.com at 2/2 Bedroom (High) Weeks for sale at Marriott Ocean Pointe, Palm Beach Shores, FL, I'm puzzled by listed prices ranging from $9,500 to $29,500. Are not all these weeks essentially the same value, with a master suite and ajoining lock out? Why would there be such a range of prices for what is essentially the same type of unit?

One explanantion which no one seems to want to discuss or admit above is that some people simply believe (...or want to believe) that what they paid a developer for a timeshare has any relevance whatsover to the value of the same product in the resale market. It doesn't --- and it never will.

If, for specific example, there are five identical weeks / units advertised (and occasionally selling) in the resale market at "Resort X" for around $5,000 each, then the current market value for such a week at "Resort X" is approximately $5,000. Period, amen, plain and simple. That's the marketplace.

However, "John Doe" paid the developer $32,000 for the same unit / week at Resort X. Now John wants to sell, and is willing to "take a loss" and sell his week for $25,000. John Doe's asking price doesn't change or influence the fact that four or five other identical weeks can be bought, today, on the resale market for $5,000 (or 20% of what John Doe is seeking). No buyer cares what John Doe paid the developer (except, perhaps, Mrs. Doe, who also signed the developer contract). Smart, informed and careful buyers, reasonably and understandably, ONLY care about what they can buy the same thing for NOW in the resale market. They couldn't care less what the seller paid a developer.

It's a fact of life that a timeshare week purchased directly from a developer is the ultimate, definitive "depreciating asset". It is immediately worth 10-25% of what that unsuspecting developer-direct buyer would pay for that same thing out in the resale market, before the ink is even dry on the developer-direct purchase contract.

All good comments...I think the bit about consumers feeling that the price that they paid from the developer was the "actual value" bears repeating.

I'm not all anti-developer...without them we wouldn't have a secondary market. However, I do believe that the developer should have to start with something similar to an MSRP or "sticker price" that everyone understood.

It is one more sign of what I have been saying for awhile now, that there needs to be more transparancy in all aspects of timeshare.

Remember to do your homework ahead of time...one interval at a specific resort is pretty much the same as another one...only buy what you know and what you want.

ken1193. I believe your point is "exactly what I discussed". Behaviorial Finance covers this topic in extreme and enlightening detail. My post gave specific anchoring examples. Now anchoring is not the only mind game that can affect pricing; you could also say that the pain of loss associated with self reflection on what one spent on a time share is just as strong a motivator. Regardless, I said what you claim no one said, just go back and read it. For the original poster, I'd go get a book on Behaviorial Finance and learn why we people are wired for lunacy. Knowledge here is ultimate power.

It's all in our head. That's what I said... :-)

patrick172 wrote:

ken1193. I believe your point is "exactly what I discussed". Behaviorial Finance covers this topic in extreme and enlightening detail. My post gave specific anchoring examples. Now anchoring is not the only mind game that can affect pricing; you could also say that the pain of loss associated with self reflection on what one spent on a time share is just as strong a motivator. Regardless, I said what you claim no one said, just go back and read it. For the original poster, I'd go get a book on Behaviorial Finance and learn why we people are wired for lunacy. Knowledge here is ultimate power.

It's all in our head. That's what I said... :-)

I did indeed read your post before offering my own input. With all due respect, while not seeing to engage in debate or argument on the matter, I don't agree that our respective postings were / are the same thoughts at all, although there may be some overlap in the conclusions. I don't know anything about "anchoring" or "Behavioral Finance", nor do I claim to. All I can (and hereby do) claim is nearly 30 years of timeshare ownership, experience and the many first hand observations in owner / seller / buyer behavior which have been overtly provided to me during the past three decades of personal involvement with timeshares.

My intended points were (and remain) straightforward and quite clear:

1. The real, current market value of a timeshare simply "is what it is", like it not, at any given point in time in the resale marketplace and ...

2. What price a developer-direct purchaser may have paid for a timeshare has absolutely NO relevance or meaning to an informed prospective buyer in the secondary market, nor to determining the actual "market value" of the unit/ week in the secondary marketplace.

I don't need to return to college for any more degrees, nor read "Behavioral Finance" in order to know (or to report) that which I have already witnessed for myself first hand for nearly 30 years now. ;-) Best regards.

ken1193.

Yes, we are actually saying the "exact" same thing but if one puts themselves out as an expert, you should be an expert. My description of "anchoring, etc... may sound collegiate in nature but in reality if one is writing about behaviorial issues, you need to know a bit about what you speak. Also your good but few points just can't possibly cover all the reasons people are dillusional with their own money. The OP's original question is all about the topic of behaviorial analysis. An understanding of this field explains exactly why timeshare pricing is so all over the place. A decent understanding of this area also helps one understand why people buy Timeshares at full developer prices,why we save so little, and why we won't sell a property at a loss. Also the information is well explained logical and quantifies a person's "30 years of timeshare knowledge".

I also mean no disrespect but these issues are currently recognized by Educators, Politicians, and Economists as the #1 problem with our national lack of savings epidemic. I don't post regarding certain nuances of timeshare ownership because I may not be an expert on a particular topic; but why people buy things and why they think irrationally concerning financial issues, that I know. You (and everyone) should read up on this topic. It is a Nobel Prize winning area of Economics and at the forefront of Ben Bernanke's plans to change the way Americans think about money. It also will give you better buying/selling knowledge than 10,000 posts on a timeshare forum. There are a number of easy reading books that cover the field. The field explains why people will live with creeping maintenance fees (Sort of the lobster in the pot theory), why buyers de-emphasize the risk of buying into a property with a depleted reserve fund. (Difficult to quantify risks as well as the tenedency to shut down when detail complicates a buying decision) and a host of other timeshare issues. The material is fascinating and really quite useful in every day life. (No I am not an author or directly tied to the field). So we can disagree while we agree because we mostly agree. "It's worth what it's worth" is very accurate. But how do you know what it's worth? I contend knowledge is power here. You get that through reading. This field is the most powerful area of study a consumer could ever learn....

I admire your enthusiasm for your subject topic of interest. For the record, however, I have never claimed to be an "expert", neither here nor anywhere else. Frankly, I'm always a bit distrustful of self-appointed "experts", myself. I claim only the benefit of nearly 30 years of experience, ownership and observations with timeshares --- my basis for voluntary forum input is no more and no less than that. Whether that makes me an "expert" is for others to decide on their own and certainly not for me to proclaim. I never have, never will.

I have no doubt that there is merit in "Behavioral Finance". That said, I also have little doubt that the demographic which would most benefit from any of the enlightenment provided therein is also the exact same demographic LEAST likely to ever read it or learn from it. I'd love to be dead wrong, but my sense is that we now live in a society where an "entitlement mentality" has somehow generally come to prevail. I don't yet see any trend away from that phenomenon, but still look forward to a day when the "wealth without work" expectation mentality is dead and gone and replaced with the "universal law of the harvest", in which we reap (and expect to reap) ONLY what we actually sow and tend...

Just for example, I purchased 4 units in Orlando and only paid under $3000.00 for all of them. These are the exact High season weeks that any new owner is purchasing at the resort for $25,000.. when they go to the presentation they have not done there "timeshare buying homework" and just sign on the dotted line and then realize after they can'afford it and that it was not a wise decision and were caught up in the moment.. what you have to do is balance what what maintenece fees are annually and what you can rent a unit from a Redweek owner is versus what you are going to pay over the years.. Think about it.. why would you put out a money to buy and pay mf's of say $1200 approx when you can rent the same week , keep your money from an owner?? Some of my fees are more than what the units are renting for and this just does not make any sense. So really research the financial end of the things before you decide ..you can almost anymore get any timeshare week from any website cheaper than owning..My thoughts.Good Luck!

bonniea16 wrote:

..you can almost anymore get any timeshare week from any website cheaper than owning.

That may be true in SOME locations and seasons (e.g. virtually ANYTHING in Orlando / Kissimmee FL, Las Vegas NV, Branson MO, Williamsburg VA), but it's certainly not true in ALL locations.

For specific example, prime winter weeks in coastal SW Florida can almost NEVER be obtained as an "exchange"from ANY of the exchange companies. When offered for rent (in limited supply), such weeks easily command rental amounts at a weekly price of TWICE the annual maintenance fee amount (and sometimes more than that).

In short, there is no valid "one size fits all" statement in regard to timeshare "values". Areas, resorts, seasons, supply and demand (and the variable, changing market forces) are all quite different from one another. If, just as another example, you want guaranteed annual access to specific winter weeks in coastal SW FL, a purchase (...resale, of course) can make financial sense --- and may very well be the ONLY avenue by which to actually obtain that annual access guarantee. Then again, even that situation could (and just might) quickly change. If BP / TransOcean / Haliburton continue to slowly turn the Gulf of Mexico into a giant cesspool of gushing oil, those "valuable" coastal SW FL "Snowbird" weeks may lose much (or even most) of the high value they have historically enjoyed --- before the recent oil rig disaster.