posted by orlandovacationhome on Sep 23

The Orlando Sentinel (1) recently noted that Orlando hotels are now facing the worst economic conditions since recordkeeping began over 20 years ago. These are business conditions possibly worse than the aftermath of 9/11.

We projected that many hotels in Orlando would be facing some type of systemic failure back in December of 2008 (2).

Checking rates for September 28^th 2009 for one night, we identified several major luxury hotel brands offering rates under $99 directly on their websites. The irony is that thousands more branded new luxury hotel rooms have either recently opened or are just opening, further increasing supply in an oversaturated market.

Some related articles are claiming that as many as one in five hotels are now in some stage of foreclosure (3). Hotels are now also facing their most aggressive competition from timeshare rentals and vacation homes.

Orlando vacation homes can now be rented for the price of a typical hotel room, but offer multiple bedrooms, living spaces, full service kitchens and even private garages, pools and game rooms. Based on personal experience, once a consumer has rented a vacation home and understands the concept, they will not rent a hotel room again.

What does this mean for our readers? We think that booking a vacation home with a reputed and accredited vacation home management company is always the best value and solution for travelers.

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posted by orlandovacationhome on Nov 20

Let’s be clear, no one can predict the future. If we could, we wouldn’t be writing a blog. This post is  just an opinion. DISCLAIMER. As with any economic opinion, take it with a grain of salt. The authors of this blog are not professionals and do not give out professional advice.

The Orlando vacation house market has been hit hard, especially for many buyers who purchased vacation homes around the years 2005-2006. Prices have dropped in some vacation home subdivisions over 30% from their peak 2 to 3 years ago. For the metro Orlando area as whole, prices appear to have dropped. Click HERE STATISTICS(1).

There are arguments that prices will continue to DROP(2):

Vacation homes are much harder to finance than primary homes, and in the current market even primary homes are now hard to finance (2A).

Foreclosures are piling up. As people struggle with their primary home mortgage, they may give up their second homes.(2B)

There are large inventories (2C).

A few vacation home subdivisions struggle with upkeep of resident exterior areas. Vacation home managment struggles to keep this under aesthetic control for vacationers.(2D)

Banks will begin to compete against each other to sell foreclosed homes, and this could negatively effect vacation home pricing (2E)

Tourists are cutting back big time on Orlando (2F).  Thus, the demand for vacation rentals is also dropping. This means that owners have less income to pay the current mortgage which increases the risk of foreclosure.

In a depressed economy, the last thing people often want to do is buy a vacation home, but the first thing they may want to do is sell if they own one (2G).

Homeowners unable to refinance their vacation homes (they may owe more than the home is now worth) might let the home foreclose if they are unable to modify the loan terms (2G1)

When the world is facing an economic crisis (2I), discretionary items such as vacation homes are no longer in demand. If the USA enters a severe recession, the demand for some vacation home products could dry up.

There are arguments that prices will STABILIZE(3):

It would appear that the rate of price decline in some subdivisions is SLOWING(4) down, but prices are still dropping.

Some subdivisions are making the transition from primarily a short term rental market to subdivisions that cater to full-time owner occupiers as the prices drop, and the vacation homes become affordable relative to regular homes.

The government is reacting on a massive scale to solve the problem(4A).

There are some SIGNS(5) that the number of home sales has been increasing.

In conclusion, vacation homes in the Orlando and Kissimmee area face a unique set of circumstances that has allowed for significant price drops from their peak prices over the last 2 to 3 years. Forecasting the future with absolute certainty is an impossibility.

Subscribe to our blog for in depth graphical analysis and forecasts scheduled to be released next month. Click here to subscribe.

As always, please consider the people writing this post/bog to be unprofessional and incompetent at all times. Due to your own due diligence at all times use an Orlando appraisal company, real estate attorney and other professionals accordingly.

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posted by orlandovacationhome on Nov 15

Cheap Orlando Vacation Homes

Expect the Orlando vacation home rental rates to drop further for the following reasons:

1. Many current owners are now cash strapped and are willing to rent their homes for less
2. As the recession sets in, less people are visiting driving demand down to rent these homes for their Orlando vacation. Please see our POST on this topic.
3. There are large amounts of these vacation villas entering foreclosure and are being picked up for a fraction of their original price, thus the new owners can rent them out more affordably.

Many of these expansive villas can now be rented at a lesser price than most cramped hotel rooms.

Don’t be afraid to shop around for vacation villas in Orlando, and feel free to ask a lot of questions. Remember, all vacation villas and vacation home management companies are not created equal, so do your homework.

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posted by orlandovacationhome on Nov 11

If you are visiting Orlando Florida and looking for a vacation villa rental, there is great news. There is a huge oversupply of Orlando luxury vacation homes for rent. This means deals to be had abound for your Orlando vacation. For about the price of a mid-market hotel room, you can rent a fully equipped vacation villa home with your own private pool and do as much self-catering in a full kitchen as you like.  This would certainly help you cut down on your dining and entertainment bills. Thousands of homes were built over the last ten years, and now many owners need to rent them. On any single night in Orlando, many of these homes sit empty.

Occupancies Dropping

In Orlando, the hotel industry will be the first to tell you their occupancies plunged in September 2008 over 2007, with room revenues dropping by as much 20-25%.

Many Owners Need to Rent

Many vacation homeowners are now feeling the pinch of the housing crisis, and many of the speculators who bought now need to generate additional income to the pay the mortgage.

What does this mean to you, the renter?

1. Shop around. There are thousands of Orlando villas and hundreds of vacation home rental management companies. Make sure you rent a good home, get a great deal and stay in a great location for your Orlando vacation.
2. Always pay by credit card.
   

   Orlando Vacation Homes - Great Deals for Renters!

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posted by orlandovacationhome on Nov 1

We started this blog with this tagline promise “… the inside scoop”. We never thought good news would be this hard to find much less discussed publicly.

Although it’s no large consolation for Orlando villa homeowners who are losing their homes to foreclosure, the recent 50%+ slide in petroleum prices

Gas / Petrol Prices Down

should be a big boon for the Orlando vacation home industry/market. This would include both the domestic and international travel market that is desperate for some good news. This drop in fuel should help bring about firmer occupancy demand for the Orlando vacation home market. We have established in another blog that vacation villas in Orlando can present a great value to consumers in general when purchased at a distressed level from a bank. Those on the ground in Orlando estimate that transient occupancy demand is now off by as much as 15% year over year due to the recession. Disney attendance by all accounts is off as well.

As stated in another area of the blog, one cannot be sure where the bottom is for actual vacation home pricing. There are many factors that come into play in evaluating this. However, one can be sure that lower costs for petro should eventually help turn the travel market in the right direction to the benefit of vacation home owners and consumers. Demand in the vacation home rental consumer market does play a role in the valuation equilibrium which is played out in the form of net rental revenues to the home owner. Let’s hope that will be the case moving into 2009.

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posted by orlandovacationhome on Oct 29

Buying A Vacation Home in Orlando – Kissimmee

At a dinner party in our home town of Frome, England, we recently met a couple who told us they just bought a vacation home in Orlando, Florida.

As we go to Orlando all the time and our mum owns two vacation homes, we had a lot in common. Our new friends told us where they bought the home, so we looked it up on the Internet. When we visited Kissimmee the following week, we met with our management company and started talking about the home. The owners told us they paid $220K cash for the house. Our property manager said the same model was selling for less than $160K (bank owned).

In America, there are various real estate professionals that can help you. To ensure you are getting the best deal possible, directly hire your own independent professional advisors. Your cost for this type of advice will be several hundred dollars for an appraiser as an example. 

Hiring a professional to do some market research could have saved our friends almost $60,000. Don’t make the same mistake!

So if you are looking to buy a vacation home in the Orlando, Kissimmee, Clermont or Davenport area, do your homework and directly hire a team of independent professionals these might include CPAs, Appraisers and Attorneys. As always we just express an opinion and don’t offer professional advice. Please reference our disclaimer.

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posted by orlandovacationhome on Oct 28

Foreclosures Effect Orlando Vacation Home Market.

The level of foreclosures in the Orlando vacation home market are now at or near record levels. As many vacation homes in the Central Florida are second homes and many were bought by speculators, the prices in many communities have dropped significantly. It would seem that many owners have simply walked away due in part that the rents from such homes are not enough to cover their expenses.

Some of the communities hardest hit are those that saw the greatest appreciation. Unlike regular homes, vacation home communities tend to have less permanent resident owners that can help stabilize the area or neighborhood.

Many banks are also being tough when lending on vacation homes which can further hold demand down. In effect, this means that many homeowners who bought a property over the prior three years could now face significant losses they sell today.

We are not real estate professionals, as we had to go through online public records, and methodically pull sales along with calling a few local realty offices in the Orlando and Kissimmee area. Our information may not be perfectly accurate so, as always, consult a real estate professional in the area and have them pull the data for you.

So what will happen to the Orlando vacation home market in the future? No one knows, and it is pure opinion and speculation at best. If we knew, we would be sitting on an island in Tahiti sipping a beer rather than worrying about the general state of the market.

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posted by orlandovacationhome on Oct 12

Renting an Orlando Vacation Home Rental in the Foreclosure Crisis – 10 Tips

Orlando vacation home foreclosure

Renting an Orlando Vacation Home - In Foreclosure?

1. Try and book the home rental as close to your travel date as possible.
2. Ask if the home you are reserving is behind on its mortgage
3. Ask how many homes in the subdivision have been abandoned
4. Ask what percentage of the development you are staying in contains vacant lots
5. Ask if the community facilities have been completed
6. Ask what percentage of homes in the community have overgrown lawns
7. Pay by credit card only
8. Use a reputable rental management company. If a home they manage is repossessed, they have others.
9. If booking direct from an owner, you must be able to verify the rental home will not be repossessed by the bank by the time your stay comes around.
10. If in doubt, keep asking questions. There are hundreds of management companies handling rental homes – so pick a good one!

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