DVC RESALES
DVC RESALES

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Old 07-29-2013, 03:31 PM   #31
jerseyduke
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Originally Posted by NoleFan View Post
what makes no sense to me are these stripped contracts (no points until 2015)??? I would sooner wait to see what happens with the market than wait 2 years for points or 1 year to borrow! Even those are going for the $80's!!

VERY good point! I find it hard to see the resale market going up much more
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Old 07-29-2013, 03:35 PM   #32
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I can't wait for Star Wars land
WDW... DO IT...This alone should convince my DH that we made the right call with regards to DVC
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Old 07-29-2013, 03:44 PM   #33
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Originally Posted by dmunsil View Post
Correct me if I'm wrong, but doesn't foreclosed inventory belong to DVD, who then has to pay the dues on it? So if 25% of the inventory goes back to DVD and they haven't sold it to new owners yet, don't they owe 25% of the maintenance cost?

Is there some way out of it where they can foist the costs on the existing members? Perhaps by not foreclosing, just letting the past-due fees pile up?

If someone is not paying their dues, but has not yet been foreclosed on, I wonder who picks up those costs?
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In the case of contract defaults, doesn't Disney usually take them back into their inventory? And in that case, doesn't Disney assume responsibility for the maintenance associated with those units?
There are two separate entities at work here: Disney Vacation DEVELOPMENT, who constructs and sells the units, and Disney Vacation CLUB who manages the timeshare properties.

Right now Disney Vacation Development IS actively foreclosing and reselling delinquent accounts. So all is well.

Problem is, Disney Vacation Development is under no obligation to do so. And if there comes a time where it's not in their best financial interest to foreclose, they may stop.

Meanwhile Disney Vacation CLUB still needs to keep each property solvent. They need to make sure that dues collections are sufficient to operate the resort. They can certainly take owners to collection and use every legal avenue available to compel owners to meet their obligation, but those efforts are costly (to the condo association) and not necessarily successful.

In short, as long as DVD feels it can re-sell the points or at least get some financial gains--even if it's just selling One Time Use points or giving the capacity to CRO for cash reservations--they will continue foreclosing. But if they stop foreclosures, owners stop paying and collections are difficult, remaining owners will be faced with a higher dues burden to keep the resort solvent.

The other possibility is that Disney keeps paying the bills for delinquent owners just because they have an image to maintain and rooms to rent to the general public. Possible...but not a certainty.
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Old 07-29-2013, 03:56 PM   #34
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TOTALLY AGREE. I think it's practically lunacy. You are essentially giving your sellers 1/2 years free vacations on your points. You'd be better off paying a few extra dollars per point for a flush contract and then renting those to pay for part of the cost of the contract!

If your contract is 150 pts, and it's stripped till 2015, you are losing the use of a total of 300 points ($3,600 at 12/pt rental, today's rate). That is like giving your seller $3,600 extra. Even if you wouldn't rent them, you're still paying for vacations this year and next out of pocket that you woudn't have to otherwise.

The only argument you could make is that you are hedging against pt increases, but honestly, logically the net present value of the ttpoints should go down as the contracts age-- so with a super stripped contract, you are only buying 27 years of use. For a 29 year price. Just wait for another downturn if you are so patient that you don't need anything for 2 years.
PLUS, you are paying dues on those 2014 points when Disney bills you in December-January. Better be a cost concession for that as well.
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Old 07-29-2013, 04:26 PM   #35
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I don't think I would call it a "bubble" but if the 2008/2009 recession taught us anything, it's that timeshare prices are VERY succeptible to the state of the economy. Even DVC.

Given the current direct selling prices, availability of resale contracts, demand for resale contracts and value that can still be gleaned from a contract with 30 years remaining, there's nothing inherently wrong with today's resale prices.

But when those conditions change, prices are gonna drop. Quickly.

There WILL be another hiccup in the economy. Could be driven by something that's foreshadowed like the housing crisis or more unexpected like a terror attack. Could be 10 years away...5 years...2 years. But it will happen.

And when the economy struggles again, the DVC resale market is gonna be ugly. Especially for those 2042 resorts which will have little hope for recovery and low demand among buyers.
Isn't this the definition of a real estate bubble? Notice that I didn't say that the prices were artificially high, as I agree with you that they are probably correct based on current market conditions. That being said, I don't think that the current market conditions are sustainable (I could be wrong) which is what led me to classify the current resale market as being a bubble. Perhaps it's the terminology we disagree on, because from reading your post I can see that we agree that BWV for $85 a point is not a strong likelihood in the future.
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Old 07-29-2013, 04:49 PM   #36
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That being said, I don't think that the current market conditions are sustainable (I could be wrong) which is what led me to classify the current resale market as being a bubble.
Well, if sustainability is the only criteria, all of DVC exists in a bubble. They will all eventually be valueless.

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Perhaps it's the terminology we disagree on, because from reading your post I can see that we agree that BWV for $85 a point is not a strong likelihood in the future.
With VGF selling for $150 and others for $165, I see nothing inherently wrong with 29 years of BWV at $85.

That BWV price might be a little high when time value of money is taken into consideration. But one would also have to consider the value in booking a BWV Standard View at 11 months vs a much higher prices VGF or BLT room. Points go much further at BWV than many others.

If anything, BWV at previous rates of $55-60 seems significantly under-priced for the number of years of ownership remaining.
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Old 07-29-2013, 05:35 PM   #37
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But this isn't a conversation about the Disney parks. It's about DVC. Star Wars will have very little baring on DVC. Marvel is absolutely useless in WDW as they can't build any attractions or use the characters.
I disagree. As long as Disney upgrades their parks and maintains their brand, it will keep DVC desirability high. Have you seen the Ironman exhibit at Disneyworld...its pretty nice

To me, DVC goes where the Disney parks/brand goes. Should Disney rest on their laurels and let the parks go, DVC value will go down with it. The only reason I even considered DVC was due to my kid's love of Mickey
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Old 07-29-2013, 05:37 PM   #38
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But one would also have to consider the value in booking a BWV Standard View at 11 months vs a much higher prices VGF or BLT room. Points go much further at BWV than many others.
You bring up a great point here, and one that often goes overlooked. A lot of times the value of owning DVC is the ability to parlay the potential savings along with the prime room booking categories. BWV Standard studios at 10 points a night are a ridiculously good deal and you're right, one needs to own there in order to take advantage.

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If anything, BWV at previous rates of $55-60 seems significantly under-priced for the number of years of ownership remaining.
I would agree. Which is probably why I bought at those prices.
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Old 07-29-2013, 06:08 PM   #39
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I would agree (with BWV prices being low at $55-60/pp). Which is probably why I bought at those prices.
Yeah, us too!
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Old 07-29-2013, 07:11 PM   #40
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Originally Posted by Apps

I disagree. As long as Disney upgrades their parks and maintains their brand, it will keep DVC desirability high. Have you seen the Ironman exhibit at Disneyworld...its pretty nice

To me, DVC goes where the Disney parks/brand goes. Should Disney rest on their laurels and let the parks go, DVC value will go down with it. The only reason I even considered DVC was due to my kid's love of Mickey
The only Iron Man stuff I saw was the monorail and a suit at Planet Hollywood. Disney has been resting on their laurels for quite some time. When was the last time Epcot got a new attraction, not just an "upgrade" from a previous attraction? How long has the yeti been broken for?
If Disney wants DVC to continue in the future, they need to up their game at the parks.
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Old 07-29-2013, 07:31 PM   #41
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Originally Posted by ELMC View Post
Isn't this the definition of a real estate bubble? Notice that I didn't say that the prices were artificially high, as I agree with you that they are probably correct based on current market conditions. That being said, I don't think that the current market conditions are sustainable (I could be wrong) which is what led me to classify the current resale market as being a bubble. Perhaps it's the terminology we disagree on, because from reading your post I can see that we agree that BWV for $85 a point is not a strong likelihood in the future.
It certainly seems like a bubble. During the real estate bubble 5 years ago, BWV was selling for $77/point, BCV for $87/point. Now these memberships have lost 1/7th of their years yet asking prices are above where they were in 2008. And, unlike 5 years ago, today's resale market is being saturated with BLT, SSR, and AKV. (BTW, those 3 alone nearly doubled the number of DVC rooms.)

And instead of building big, DVD builds the tiny VGF and now word's out that the DVC at the Poly is being scaled back. Seems that Disney is expecting lower DVC demand.

Last edited by Nabas; 07-29-2013 at 07:51 PM. Reason: correct typo
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Old 07-29-2013, 07:48 PM   #42
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The only Iron Man stuff I saw was the monorail and a suit at Planet Hollywood. Disney has been resting on their laurels for quite some time. When was the last time Epcot got a new attraction, not just an "upgrade" from a previous attraction? How long has the yeti been broken for?
If Disney wants DVC to continue in the future, they need to up their game at the parks.
You are right...i meant at Disneyland. They had the Ironman stuff at Innoventions there. Pretty cool. Disneyland also got the fantastic Carsland which really helped book the hotels there (not to mention GCV bookings).

Lets hope WDW gets more upgrades making it, and DVC, more valuable in the future.
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Old 07-30-2013, 12:26 AM   #43
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... Add to that the fact that BLT had 50 years of use on it, it made sense to us to pay the extra for BLT. We bought in June of 2009 for $92 pp. In one year the price went up 20%.

As for the OPs original question, why shouldn't prices go up? What prices have not gone up over the past few years? Inflation has been fairly steady over the last several years so it would only make sense that the price of DVC would have gone up as well. Are you paying the same amount for food as you did 6 years ago? Also, how much has the price of a hotel stay gone up in the last 6 years?
Inflation in general has been lower than the 3.35% per annum average lately. June's annual rate was 1.75%, Jan. 2013 was 1.59%, Jan. 2012 was 2.93%, 2011 was 1.65%, 2010 was 2.63%, and 2009 was .03%.
So I don't think we can blame inflation for the recent price bump in resale prices - I attribute it to the big bump in direct sales prices.
I do wonder about future DVC projects, it took a long time to sell SSR and AKV I suspect because neither is attached to a park. Thus people value easy access to a park and are willing to pay more for it. Perhaps there is available land out the back of MK or DHS where they could build another DVC. Or maybe they could build another BLT tower - who knows, as long as DVC is such a cash cow they'll keep building IMO.
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Old 07-30-2013, 02:15 AM   #44
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In my view the resale market usually is fairly stable without much change. The reason I think that is that the majority of the resale contracts are listed at the three major brokers. All of them suggest to sellers what they should be listing at. This they base on recent sales. So they are agents for price stability.

When large price changes happen it is because of other factors, such as the economy collapsing and people being forced to sell, Disney raising direct prices, lack of iventory for properties allowing those who want to sell to raise their price, etc.

Taking BWV as the example that is being discusses, a new price level of in the $80s has been established. Buyers have demonstrated that they will buy at that level and all the brokers are probably advising sellers to list in that range. While you might see an occasional BWV priced lower, there just are not enough sellers in a hurry to undercut the $80s price point. BWV contracts are going to continue to be listed in the 80s. Anyone who bought in the $50s should feel very lucky, cause those prices are not coming back anytime soon, unless of course you expect the US economy to collapse sometime soon and I don't.

So high prices are here to stay for now.
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Old 07-30-2013, 03:42 PM   #45
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Originally Posted by Apps View Post
I disagree. As long as Disney upgrades their parks and maintains their brand, it will keep DVC desirability high. ...
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Originally Posted by sonofanarchy View Post
...If Disney wants DVC to continue in the future, they need to up their game at the parks.
Yeah, like Avatarland.
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