2023 resale price speculation

[AvidDisReader]

And who in their right mind is in an ARM in 2022?

ARMs went out of style on first mortgages during the 2008 mortgage melt down. However all HELOC are on some kind of variable rate. People who own HELOC have been hit extremely hard with the interest rate increases.

 

[pianomanzano]

And who in their right mind is in an ARM in 2022?

There are youtube real estate "experts" who recommend 10/1 ARMs, citing average home ownership lengths as a justification.

 

[AnnaKristoff2013]

Disney will go hard on ROFR if the cheapest contracts begin selling or offers start getting too low.
The buildings are built, they'll absorb those contracts the moment the market signals that resale is eating significantly into their direct revenue.

Disney is in historically *****ty financial shape due to Chapek's mismanagement of the non-parks parts of the company. I wouldn't be so sure of this.

 

[AnnaKristoff2013]

To be clear, this is exactly the opposite of how they handled the drops in prices in 2009-11 and summer 2020. They suspended ROFR entirely and let absolute nonsense firesales go through. Some posters on this board bought at unimaginably low prices. The 2020 posts are still in the ROFR threads, and you can check the county’s sales database yourself to verify (I did).

Yeah, in the short term I don't think Disney cares if fire sales go through because they can always prop the market back up through ROFR at a later date. They have a serious cash crunch right now.

 

[BamaGuy44]

1.) The macroeconomic landscape is the worst it has been - arguably ever. The state of things in place are lining up for a Lehman level event x10.

2.) People in ARMs are getting slaughtered and losing disposable income.

3.) Luxury sales, whether it be watches, vehicles, or things like a DVC, are finally falling off the cliff. I broker exotic vehicles and luxury watches, prices have peaked and are pulling back more aggressively with every week.

4.) Those DVC owners who want/need to buy a new home for whatever reasons, lost over $1,000/month just in buying power from the rate hikes.

5.) Consumer credit debt is at a historic high, with rate hikes pushing up their APRs.

6.) Have a DVC and you finally need a new vehicle? That $430 lease in 2020 is now a $850 lease. Where do you find the $420 from?

7.) Disney experience. People hate genie, people hate the food/drink downsizing, people hate the crowds, people hate the price hikes.

Rising wages aren't alleviating anything, they're just accelerating the rate of inflation. Sure, CPI data yesterday wasn't AS bad, but it's still bad.

Don't forget, the inventory ALWAYS surges from December - January as people want out before their dues are due.

Yikes. So we can assume you've pulled all your money out of the market and made sure your bunker is fully prepped for the coming depression? Economists have predicted 17 out of the last 2 deep recessions. People have been predicting this current down cycle ("all the signs are there!") since 2010.

 

[eticketplease]

They have historically been where Disney refers people who want to sell their contracts; I wonder if they get a less educated seller as a result?

Also they charge more in buyer fees than some other sites so make sure you do all of the math before buying.

Unfortunately they do not use those fees for the website!!

No way to sort by use year without scrolling and scrolling.

Although Bill is not involved I feel like this is a good time for a quote from @RoseGold stating to fix the web site!!

 

[EYL]

Those buyer fees are sneaky. On a 50 point contract you have a $225 "Admin Fee" that immediately adds $4.50 to the purchase price agreed to with the buyer. So if you get a small point contract that's 50 points you need to factor that in.

True. But if I remember correctly, when I was shopping around in 2019, I saw the Board Sponsor's website and they had a closing cost listed for every listing. I bought from Fidelity and even with an Admin Fee, I believe it was comparable. So don't be turned off by the admin fee. Just find the right contract that suits you.

 

[DonMacGregor]

ARMs went out of style on first mortgages during the 2008 mortgage melt down. However all HELOC are on some kind of variable rate. People who own HELOC have been hit extremely hard with the interest rate increases.

True, but HELOC's have always had some variable rate as they are a revolving line of credit. Fixed-rate HELOC's (or "hybrids") are pretty rare. HELOC's are most often taken out by homeowners with established ownership/mortgage payment history (unlike the crazy days of 2008 with Countrywide and others handing them out like candy to new buyers with little income and no payment/credit history). As a result, the increases in interest rates shouldn't come as a surprise to the more educated borrower. Zero argument that the effect can be no less devastating.

When I read "People in ARMs are getting slaughtered and losing disposable income", I think most people would read that as the first mortgage, but I do agree that there are plenty of adjustable rate HELOC's getting pounded right now.

 

[Brian Noble]

less educated seller

Less educated, or perhaps more motivated.

 

[DonMacGregor]

There are youtube real estate "experts" who recommend 10/1 ARMs, citing average home ownership lengths as a justification.

 

[AstroBlasters]

Disney is in historically *****ty financial shape due to Chapek's mismanagement of the non-parks parts of the company. I wouldn't be so sure of this.

I do not want to defend “he who must not be named”, but I think Iger’s unfortunate timing of taking on a massive amount of debt for the FOX purchase just before COVID destroyed their business model for over a year plus might also be impacting things. It also accelerated peoples decision to cut the cord and go streaming (negative for ESPN fees) and shifted more movie watching to at home (money loosing Disney+) instead of the theatre.

 

[AstroBlasters]

I think the real question is what is going to happen to Disney’s hotel prices in 2023. It seems that people run the numbers for DVC compared to what they pay cash price for at the corresponding hotel. Also, current owners who no longer want to travel to Disney factor in wether to hold or sell based on the rental value of the points. That rental value per point is also tied to the cost of the hotel rooms at the cash price.

Right now a base room at the Grand Cal can go from $600 to $800 a night. It wasn’t that long ago that it was $400 a night. If people start pulling back from the hotels, then Disney will lower the price to attract guests. Hotel prices go down, perceived DVC point values go down.

 

[AvidDisReader]

True, but HELOC's have always had some variable rate as they are a revolving line of credit. Fixed-rate HELOC's (or "hybrids") are pretty rare. HELOC's are most often taken out by homeowners with established ownership/mortgage payment history (unlike the crazy days of 2008 with Countrywide and others handing them out like candy to new buyers with little income and no payment/credit history). As a result, the increases in interest rates shouldn't come as a surprise to the more educated borrower. Zero argument that the effect can be no less devastating.

When I read "People in ARMs are getting slaughtered and losing disposable income", I think most people would read that as the first mortgage, but I do agree that there are plenty of adjustable rate HELOC's getting pounded right now.

I have been a mortgage underwriter for 40 years. And just to show you the effect of the current economy, I am putting off retirement for the second year due to high inflation and high interest rates in general. It really stinks as I never expected to still be working after age 65.

 

[RanDIZ]

I have been a mortgage underwriter for 40 years. And just to show you the effect of the current economy, I am putting off retirement for the second year due to high inflation and high interest rates in general. It really stinks as I never expected to still be working after age 65.

Exactly. Who can even afford to retire anymore? Not in this economy. I never thought I'd ever buy into DVC yet pulled the resale trigger back in 2020 (AKV $109) and 2021 (CCV $140). I never even considered Direct nor would I now or recommend it. There is no value there. Just as bad as buying a new car and driving off the lot with a loss already. Doesn't make sense. There's not much longer that I can handle the "pay more, get less" attitude Disney has. It's one thing to move along with inflation, but Disney takes it to a whole other level. Way above the inflation rate. I've been thinking about dumping at least one of these contracts just because Disney is not heading in the right direction on any front. Maybe Iger can re-right the ship, but only time will tell.

 

[SouthJersey]

Yikes. So we can assume you've pulled all your money out of the market and made sure your bunker is fully prepped for the coming depression? Economists have predicted 17 out of the last 2 deep recessions. People have been predicting this current down cycle ("all the signs are there!") since 2010.

People will always call for a narrative whether bear or bull. I get the sarcasm and smugness of your comment, but you can't contest any of the raw data highlighting the inevitable turmoil for the macroeconomic picture.

 

[SouthJersey]

You can of course do your comparison however you like. Paying $13,326 for two studios is definitely a direct price. Had you rented instead and paid $25 pp which is high for VGF as most rent VGF cheaper, then you would pay 2 x $3,950 for a total of $7,900. Your breakeven would be pushed to 13 years. As dues always increase you are more likely to look at 14 or 15 years using this comparison.

Not saying that buying DVC is a bad idea it’s not. After the 14 or 15 years your VGF still hold value should you decide to sell.

You're assuming that there isn't a tipping-point of the average Disney guest becoming aware that you can rent DVC points and stay at a deluxe resort for less than half of the rack rates. When we reach that inflection point, you'll see Disney intervene. For my personal experience, 1 in 100 would be a generous overestimate for how many people I know that are aware you can 'rent' DVC points. When the majority are aware, we'll see $/point rocket or Disney intervene with restrictions.

 

[SouthJersey]

Worse than Lehman x 10? Sounds like your opinion is that a Great Depression is on the horizon.

Let the Chinese economy collapse and you're going to see most of your mutual funds, as they're all over-exposed to Chinese tech and other securities, collapse with it.

 

[tom1944]

You're assuming that there isn't a tipping-point of the average Disney guest becoming aware that you can rent DVC points and stay at a deluxe resort for less than half of the rack rates. When we reach that inflection point, you'll see Disney intervene. For my personal experience, 1 in 100 would be a generous overestimate for how many people I know that are aware you can 'rent' DVC points. When the majority are aware, we'll see $/point rocket or Disney intervene with restrictions.

I had no idea you could rent points until I started this process.

Even now I am not 100% certain how I go about it and get the week I would want and not walk into a potential scam

 

[DonMacGregor]

I have been a mortgage underwriter for 40 years. And just to show you the effect of the current economy, I am putting off retirement for the second year due to high inflation and high interest rates in general. It really stinks as I never expected to still be working after age 65.

You're preaching to the choir. Full disclosure, we did have an ARM back in 2002, but got out of it the second rates started creeping up.

 

[tom1944]

Let the Chinese economy collapse and you're going to see most of your mutual funds, as they're all over-exposed to Chinese tech and other securities, collapse with it.

As long as the dollar remains the worlds reserve currency we will get through any economic upheaval