Reaching a price equilibrium?

[SFlaDisneyfans]

We are looking to add on a contract to our current one and have been watching the resale price inflation. I happened by TSS this morning and took a count of what is for sale (not pending). Excluding locations we are not interested in purchasing, here is what I found (10/24/13).

AKV - 30
BLT - 23
BCV - 15
BWV - 15
OKW - 12
SSR - 42
VWL - 10

total - 147

If the resale inventory fails to clear the market or even increases, I am wondering if we found/surpassed the equilibrium price for resales and may start seeing a float downward a bit in the future until inventory levels start to fall. It could be getting near the end of the year and some owners are looking to move inventory before January dues and/or marginal sellers looking to lock in a profit at current market prices. Or none of the above. This is the largest inventory I have seen in a while and wonder if we have found a ceiling.

Updating with new data (11/1/13):

AKV - 31 (+1)
BLT - 20 (-3)
BCV - 16 (+1)
BWV - 23 (+8)
OKW - 11 (-1)
SSR - 43 (+1)
VWL - 08 (-2)

total - 152

As of 11/4

AKV - 32 (+1)
BLT - 20 (+0)
BCV - 19 (+3)
BWV - 21 (-2)
OKW - 8 (-3)
SSR - 49 (+6)
VWL - 09 (+1)

total - 158

As of 11/9

AKV - 35 (+3)
BLT - 18 (-2)
BCV - 21 (+2)
BWV - 17 (-4)
OKW - 06 (-2)
SSR - 49 (+0)
VWL - 11 (+2)

Total 157

As of 11/15

AKV - 30 (-5)
BLT - 19 (+1)
BCV - 18 (-3)
BWV - 17 (+0)
OKW - 13 (+7)
SSR - 54 (+5)
VWL - 10 (-1)

Total 161

As of 12/04

AKV - 29 (-1)
BLT - 27 (+8)
BCV - 12 (-6)
BWV - 15 (-2)
OKW - 10 (-3)
SSR - 54 (+0)
VWL - 11 (+1)

Total 158

As of 12/12

AKV - 33 (+4)
BLT - 25 (-2)
BCV - 11 (-1)
BWV - 19 (+4)
OKW - 13 (+3)
SSR - 62 (+8)
VWL - 15 (+4)

Total 178

As of 12/30

AKV - 35 (+2)
BLT - 28 (+3)
BCV - 14 (+3)
BWV - 17 (-2)
OKW - 14 (+1)
SSR - 63 (+1)
VWL - 18 (+3)

Total 189

 

[glamdring269]

I think you may be right. I've been keeping my eye on four specific contracts at three different locations that have been sitting there much longer than I expected. Based on this I'm inclined to wait for prices to start falling. I'm not planning to return to the Dis until 2015 so no huge rush at this point!

 

[Commish]

I do not think that is a large inventory of contracts given the size of DVC,
The primary driver IMO is the March DVC price increase and Disney's ROFR Activity, that has pushed up the prices as sellers react and are in a better position to start at a much higher ask.

OKW prices have jumped almost 40% since last year ($50 to $70) seeing a disconnect in the market I jumped on Vero @ $39 a few weeks ago, current VB asking prices are now ~$50 (non-stripped)

 

[NoleFan]

I also noticed that the small contracts (stripped or not) are not always selling so fast. A few months back, they appeared to sell within minutes of the listing going live.

 

[Silver19]

We are looking to add on a contract to our current one and have been watching the resale price inflation. I happened by TSS this morning and took a count of what is for sale (not pending). Excluding locations we are not interested in purchasing, here is what I found. AKV - 30 BLT - 23 BCV - 15 BWV - 15 OKW - 12 SSR - 42 VWL - 10 total - 147 If the resale inventory fails to clear the market or even increases, I am wondering if we found/surpassed the equilibrium price for resales and may start seeing a float downward a bit in the future until inventory levels start to fall. It could be getting near the end of the year and some owners are looking to move inventory before January dues and/or marginal sellers looking to lock in a profit at current market prices. Or none of the above. This is the largest inventory I have seen in a while and wonder if we have found a ceiling.

I think you're right. And based on the offers we've made on BWV contracts this week, I believe prices are falling. All three contracts we wanted ended up selling in the 70's, despite higher list prices. We reached agreement at $70. There's a lot of inventory compared to what I've seen over the last three years and I check daily. Sometimes hourly.

 

[sndral]

I've noticed on a site that aggregates listings from 4 brokerages that the AKV listings have climbed from 2 pages to 5 pages in the last month or two. More supply typically suggests downward pressure on price in most markets, it'll be interesting to see if that's the case going forward.

 

[Nabas]

I think you're right. And based on the offers we've made on BWV contracts this week, I believe prices are falling. All three contracts we wanted ended up selling in the 70's, despite higher list prices. We reached agreement at $70. There's a lot of inventory compared to what I've seen over the last three years and I check daily. Sometimes hourly.

Resale inventory is way up. In the last 2 months, listed inventory on 6 DVC resale websites has doubled. Lots of inventory is starting to sit. Several are asking stupid prices for stripped contracts.

At it's low, BCV had only 4 listings available. Now that's expanded to 29 listings. Despite the much higher inventory, BCV asking prices have climbed to over $100/point, whereas asking prices have been flat at the other resorts for a few months.

It seems to me the market has peaked for 2013. Let's see if prices decline.

 

[DVC Dude]

well, it may be that we are approaching the end of the year and the bad old annual dues is coming up and the holiday shopping season is about to begin

this is a normal cycle for timeshares

 

[Dean]

We are looking to add on a contract to our current one and have been watching the resale price inflation. I happened by TSS this morning and took a count of what is for sale (not pending). Excluding locations we are not interested in purchasing, here is what I found.

AKV - 30
BLT - 23
BCV - 15
BWV - 15
OKW - 12
SSR - 42
VWL - 10

total - 147

If the resale inventory fails to clear the market or even increases, I am wondering if we found/surpassed the equilibrium price for resales and may start seeing a float downward a bit in the future until inventory levels start to fall. It could be getting near the end of the year and some owners are looking to move inventory before January dues and/or marginal sellers looking to lock in a profit at current market prices. Or none of the above. This is the largest inventory I have seen in a while and wonder if we have found a ceiling.

I don't follow volume and prices day to day but IF this is the case you should start to see prices fall. First you'll likely see lower asking accepted then listing prices fall IF this trend continues.

 

[Anthony1971]

Your theory could be correct.
However the economy is improving as well as house prices going up and this drives the price of timeshares as well.
The flip side of the inventory is simply prices are high so let me list mine for a lot more than I paid and see if it sells if not I will keep it...
There are also a lot of people who purchased multiple contracts so they could have a two bedroom every year or..... and things change...
I talked about selling my small contract as we really do not need it much -- last trip 4 adults and 1 child in a two bedroom could have done it with two studios or not gifted the others a room....
If I listed my contrcat I would not accept a low offer as I have no need to sell it...
You need to prove need for your Theory and I just do not see it right now... But it is possible that some that need to sell will accept a lower price..

 

[Dean]

Your theory could be correct.
However the economy is improving as well as house prices going up and this drives the price of timeshares as well.
The flip side of the inventory is simply prices are high so let me list mine for a lot more than I paid and see if it sells if not I will keep it...
There are also a lot of people who purchased multiple contracts so they could have a two bedroom every year or..... and things change...
I talked about selling my small contract as we really do not need it much -- last trip 4 adults and 1 child in a two bedroom could have done it with two studios or not gifted the others a room....
If I listed my contrcat I would not accept a low offer as I have no need to sell it...
You need to prove need for your Theory and I just do not see it right now... But it is possible that some that need to sell will accept a lower price..

Maybe but I don't see as much impact from the economy in this situation as for other more standard parts of the economy. IMO the main reason for the increase was related to VGF hype. Now whether the Poly announcement is enough to keep it going for a while, we'll see. IMO we've been at an artificial high in price and low in availability.

 

[dundey]

We are also looking to add some points and I agree. A contract I placed a bid and made a fair offer for, is still sitting at a high price. Others I've been watching are still there as well.

In looking at the total from the 4 brokers website I think inventory is surely increasing, although I have not been tracking the total number.

We will be patient!

 

[Annielkd22222]

I don't think the prices will change much unless there are motivated sellers. I think people have a bottom line price they will sell at, and they can wait patiently as well.

 

[htmlkid]

I have a listing and from a sellers point of view I agree with the recent posts. The economy is getting better and there are not as many sellers willing to give away their points anymore. I would rather keep them till I get a fair price.

 

[Nabas]

According to dvcnews.com, VGF sales are lagging:

http://dvcnews.com/index.php/dvc-pr...-concerned-about-recent-grand-floridian-sales

Does today's article indicate that direct DVC prices have finally reached their limit?

What impact will that have on the resale market?

 

[MiramarQE]

well, it may be that we are approaching the end of the year and the bad old annual dues is coming up and the holiday shopping season is about to begin

this is a normal cycle for timeshares

This is what we're waiting for - people that are looking to sell to cover their Christmas gift bills.

With VGF hype dying, Poly announcement 18 months away and Christmas gift bills coming due, we're betting we'll see a Jan 2014 "correction" in resale selling prices.

 

[DVC Dude]

According to dvcnews.com, VGF sales are lagging:

http://dvcnews.com/index.php/dvc-pr...-concerned-about-recent-grand-floridian-sales

Does today's article indicate that direct DVC prices have finally reached their limit?

What impact will that have on the resale market?

I think this is a short blip as there was HUGE demand initially and then now a slowdown. If Disney really wants to move points, then they should offer a Black Friday special like they did in 2010 when that was the LAST time I bought direct from Disney for BLT.

This is what we're waiting for - people that are looking to sell to cover their Christmas gift bills.

With VGF hype dying, Poly announcement 18 months away and Christmas gift bills coming due, we're betting we'll see a Jan 2014 "correction" in resale selling prices.

It depends on the resort your want, but yes, that is a perfect time to be shopping for good deals.

 

[sndral]

According to dvcnews.com, VGF sales are lagging:

http://dvcnews.com/index.php/dvc-pr...-concerned-about-recent-grand-floridian-sales

Does today's article indicate that direct DVC prices have finally reached their limit?

What impact will that have on the resale market?

The article reports that potential buyers are turned off by the high per point price and the high point requirements to stay there. The steep decline from 220,000 pts sold in July v. 75,000 in Sept. is pretty amazing IMO. As lovely as the GF is, part of the experience for me is the service. When they announced GF DVC I expected them to have high pt costs but to offer concierge like the wildly popular AKV units, sort of like a DVC Sugarloaf building.
VGF are so expensive that I'm not sure the fact that sales there fell off a cliff is a good predictor of the resale market, tho'.

 

[DVC Dude]

For all VGF has to offer and it is a great resort, the major negatives to me are:

1. High buy in price ($150)
2. Higher annual dues ($5.41) vs BLT $4.50
3. High point cost to book rooms (about 25% more than BLT rooms)

 

[NoleFan]

For all VGF has to offer and it is a great resort, the major negatives to me are:

1. High buy in price ($150)
2. Higher annual dues ($5.41) vs BLT $4.50
3. High point cost to book rooms (about 25% more than BLT rooms)

I agree. In addition, I don't think staying @ VGF on a regular basis for a family vacation appeals to everyone. I view it more as a couple's retreat, stay with older kids, or occasional stay during the holidays. Other resorts are more appealing to me to stay at on a regular basis although VGF looks very nice.

Contracts seems to be staying on the market longer, small contracts aren't moving so fast, there seem to be tons of SSR contracts. I think seller's still have high asking prices in mind but many buyer's are waiting for that great deal to come along vs. a few months ago. I contracted on my small BWV contract back in March for $65/pt. Direct prices were $130 so although stripped of 2013 points, it was a good deal for me. Now, BWV is in the $80's stripped or not. I think people who want to save a bit buying resale are buying although not as fast and there are still those holding out for that great deal. Doesn't appear to be quite as much of a seller's market IMO