Analysis of DVC Sales, Resales, and Restrictions

[katandmouse]

Ok, I’ve been working on a new theory (and trying to brush up on my calculus lol).

I think we can all agree that the new resale restriction will negatively affect RIV resale owners (they can only stay at RIV). Whether or not RIV resale owners only want to stay there (so whether they care or not), it is still a huge loss of booking ability that all other owners have.
I think we can also safely assume that it will negatively affect new (post-January 19) L14 resale owners (they can only stay at L14 resorts; meanwhile, new direct owners at all new resorts will also be able to book there — more owners for fixed # rooms = more competition).
My question is: Will this resale restriction also negatively restrict current and future direct owners?

Below, I have tried to summarize all the data @dvcsince93 has found from the OCC records (thank you again for searching and sharing). Obviously these are not exact numbers and we can’t know for sure, but I think they provide a good enough snapshot. Please correct me if I’m wrong or misinterpret anything.

ALL DEEDS
Note: We don’t know the number of new members vs add-ons for direct or resale.
We also don’t know how many resales were of already resold contracts (likely then the resale numbers are somewhat smaller than represented).

• Currently 10-12% of all DVC deeds are resale
  • Total as of May 2019: 370K DVD direct deeds vs 40-45K resale deeds
• Last 2 years (2017-2018?): 10K resales vs 35K new direct deeds added — over 20% deeds recorded were resale
• Resales increasing
  • 2011: 150/month average
  • 2016: 250/month average
  • 2018: 350/month average
  • 4/12-5/17/2019 (35 days): 489 — would average to about 420/month
• Direct sales (of WDW resorts) apparently constant or possibly decreasing?
  • 35 day snapshots:
    • 6/6-7/11/2013: 2593 (new resorts: 1428 VGF + 992 AKV = 2420)
    • 1/27-3/3/2015: 2106 (new resorts: 754 PVB + 1019 VGF = 1773)
    • 4/14-5/19/2017: 2647 (new resorts: 529 CCV + 1613 PVB = 2142)
    • 4/12-5/17/2019: 2365 (new resorts: 851 RIV + 1052 CCV = 1903)
  • 45 day snapshots:
    • 6/6-7/22/2013: 3684 (new resorts: 2120 VGF + 1168 AKV = 3288)
    • 1/27-3/16/2015: 2913 (new resorts: 1052 PVB + 1512 VGF = 2564)
    • 4/14-5/30/2017: 3011 (new resorts: 560 CCV + 1860 PVB = 2420)
    • 4/12-5/28/2019: 2620 (new resorts: 940 RIV + 1139 CCV = 2079)
• The number of resale purchases increases at a slightly greater rate each year. More direct contracts are sold — but apparently the rate is constant or even decreasing.

RESALES PER RESORT

• Each year 1-2% deeds of “sold out” resorts are sold on the resale market — rate is probably slowly increasing over time (see above)
• In May 2019, 20% OKW deeds are resale (after 28 years)
  • 8-10K resales vs 51K deeds
• In May 2019, 14% SSR deeds are resale (after 15 years)
  • 11-13K resales
• As of May/June 2019, about 11% BLT deeds are resale (after 10 years)
  • In the first 5.5 years, 4% were resales: 1600 resales vs 37K direct
  • In the last 5 years: 2400 resales and 1000 direct deeds added
  • In total, 4K resales vs 38K direct
• As of 6/1/2019, about 4.5-5.5% VGF deeds are resale (after 6 years)
  • 990 resales (excluding resold resales) vs 17,722 deeds (18,060 - 325 buybacks and 13 foreclosures, assuming DVD resold those)
• The ratio of resale deeds to direct at each resort increases each year

COMPARING RIVIERA TO RESALE 4/12-5/17/2019

• DVD recorded 2365 deeds of WDW resorts
  • RIV 851
  • CCV 1052
• Resale recorded 489 deeds of WDW resorts
  • SSR 115
  • AKV 76
  • BLT 67
  • PVB 63
  • OKW 51
  • BRV 37
  • BWV 33
  • BCV 23
  • VGF 23
  • CCV 8

TOTAL POINTS PER RESORT (millions)
(I found this info on *******.com but was not able to find specific numbers for PVB, RIV, REFL, or updated AUL.)

• AKV 7.4
• AUL 11.52 (only 6 declared through 2018?)
• BCV 3.03
• BLT 5.73
• BRV 1.96
• BWV 4.89
• CCV 3.32
• HHI 1.37
• OKW 7.67
• PVB 4+
• SSR 14.03
• VB 1.62
• VGC 1.34
• VGF 2.52
• Total L14 = 70.4 (or 64.88 declared?)
• 
  
• RIV
• REFL

MY ANALOGY
Now, I’m imagining each resort as its own cup. Since the restriction lumps all L14 resorts together, for my purposes they act as one cup, and since they have so many more points, really it’s more like a bucket. So I have a bucket that holds 65 million points (up to 70.4) for L14, a cup for RIV points, a cup for REFL points, and so on.

Now I’m going to pour sand into each cup/bucket to represent the owners. Different colored sand to represent each home resort, but the sand can all be sifted together between bucket and cups at 7 months — these are the current and new direct owners.

Now starting in 2019 (when the restrictions started), I’m going to start pouring cement into the bucket. This is the group of new resale owners. The cement is going to stay wet and can kind of mix with the sand in the L14 bucket, but it will harden in the RIV cup and each subsequent cup (those owners are “stuck” there).

Right now the L14 bucket is full of sand, and an empty RIV cup is starting to fill with sand. Some of the sand in the bucket is starting to scoop out (original owners selling), and some wet cement is starting to pour in (new resale owners). Meanwhile, some sand (new direct owners) is starting to pour into the RIV cup. Right now, there is almost twice as much RIV sand added than L14 cement, but the cement is pouring quicker than the sand. At some point (I don’t know when) it appears that more cement would pour in faster than sand. Cement will also start pouring into the RIV cup as well, probably only a very little next year to start, but then moreso over time. By then, the REFL cup will also be filling with sand, and repeat... In addition, in 2042 that bucket will cut out 12.87 million points, losing 18% space for sand and cement.

As long as there is more sand added than cement, and more space for sand, then current and direct owners will have a better time trading in and out at 7 months. But once the cement becomes substantial, it will limit the sand’s movement.

CONCLUSION
Overall, I think L14 booking will tighten due to this restriction, and new resorts like RIV will actually have increased availability at first. Eventually they will tighten too, and so on; the older resorts will always be more difficult to book than newer ones. How long this will all take though, I haven’t figured that out yet. Probably long enough that we don’t even notice. Or that there are so many other factors (small contracts, high point prices, large bungalows/cabins, etc) that we won’t notice the reason. And by the time all this happens, DVC can introduce a payment scheme to allow resales to book elsewhere, or otherwise change the booking rules.

TL;DR
RIV resales: boo
L14 resales: somewhat less boo
Current/new direct owners: meh, NBD

 

[sethschroeder]

I think it's going to reinforce the idea of getting guaranteed weeks for Studios which in turn is only going to make things possibly worse in these new resorts.

As I have been thinking it through about possibly buying at RIV even if I go with a low contract value I would find a week to lock up even if I didn't plan on always use it simply to have a fall back for the future.

 

[katandmouse]

I think it's going to reinforce the idea of getting guaranteed weeks for Studios which in turn is only going to make things possibly worse in these new resorts.

As I have been thinking it through about possibly buying at RIV even if I go with a low contract value I would find a week to lock up even if I didn't plan on always use it simply to have a fall back for the future.

I think a guaranteed week is a really good idea.

 

[bwvBound]

I enjoyed your word pictures of cups, buckets, sand and cement. Thanks!

 

[Brett Wyman]

Currently 10-12% of all DVC deeds are resale

Honestly shocked that it is that low.

 

[dvcsince93]

In trying to better understand resale, I took a look at the numbers for VGF. Since all the sales/resales occured after 2008, there is more searchable data for it and yet there is not as many sales as BLT so it is easier to deal with.

According to the 2018 Condo Notice there were 17597 contracts for VGF outstanding.

According to county records, DVD has sold 18060 contracts as of 6/1/19.

DVD has bought back 325 contracts and there have been 13 foreclosure sales, all bought back by DVD.

Of the DVD sales:

3035 were contracts up to $10K,
10222 were contracts of $10K-25k
4022 were contracts of $25-50K, and
612 were contracts greater than $50K

Resales for VGF contracts totaled 1097, and there were about 436 gratuitious transfers of VGF contracts.

Of the resales:
188 were less than $10K,
634 were $10K-25K,
251 were $25-50K and
32 were greater than $50K

Of the resales, about 60 indivduals, groups, or companies, bought and then sold about 110 contracts on the resale market. Roughly 10 of the individual, groups, companies bought and sold 2 or more contracts and accounted for about 1/2 of the 110 contracts. The 110 contracts represent about 10% of the resale volume.

And the actual total of direct contracts sold on the resale market was about 990 or about 5% of those sold by DVD.

 

[katandmouse]

In trying to better understand resale, I took a look at the numbers for VGF. Since all the sales/resales occured after 2008, there is more searchable data for it and yet there is not as many sales as BLT so it is easier to deal with.

According to the 2018 Condo Notice there were 17597 contracts for VGF outstanding.

According to county records, DVD has sold 18060 contracts as of 6/1/19.

DVD has bought back 325 contracts and there have been 13 foreclosure sales, all bought back by DVD.

Of the DVD sales:

3035 were contracts up to $10K,
10222 were contracts of $10K-25k
4022 were contracts of $25-50K, and
612 were contracts greater than $50K

Resales for VGF contracts totaled 1097, and there were about 436 gratuitious transfers of VGF contracts.

Of the resales:
188 were less than $10K,
634 were $10K-25K,
251 were $25-50K and
32 were greater than $50K

Of the resales, about 60 indivduals, groups, or companies, bought and then sold about 110 contracts on the resale market. Roughly 10 of the individual, groups, companies bought and sold 2 or more contracts and accounted for about 1/2 of the 110 contracts. The 110 contracts represent about 10% of the resale volume.

And the actual total of direct contracts sold on the resale market was about 990 or about 5% of those sold by DVD.

Thank you for adding this. It helps give a better picture for sure. I’m going to add the VGF numbers to the Resales Per Resort section.

 

[Littlelulu01]

In trying to better understand resale, I took a look at the numbers for VGF. Since all the sales/resales occured after 2008, there is more searchable data for it and yet there is not as many sales as BLT so it is easier to deal with.

According to the 2018 Condo Notice there were 17597 contracts for VGF outstanding.

According to county records, DVD has sold 18060 contracts as of 6/1/19.

DVD has bought back 325 contracts and there have been 13 foreclosure sales, all bought back by DVD.

Of the DVD sales:

3035 were contracts up to $10K,
10222 were contracts of $10K-25k
4022 were contracts of $25-50K, and
612 were contracts greater than $50K

Resales for VGF contracts totaled 1097, and there were about 436 gratuitious transfers of VGF contracts.

Of the resales:
188 were less than $10K,
634 were $10K-25K,
251 were $25-50K and
32 were greater than $50K

Of the resales, about 60 indivduals, groups, or companies, bought and then sold about 110 contracts on the resale market. Roughly 10 of the individual, groups, companies bought and sold 2 or more contracts and accounted for about 1/2 of the 110 contracts. The 110 contracts represent about 10% of the resale volume.

And the actual total of direct contracts sold on the resale market was about 990 or about 5% of those sold by DVD.

Thanks for the analysis. So does this mean approximately every 5 years about 5% of GFV direct points rolled into resale points? Just curious about the rate and amount of dvc points that end up as resale/restricted points now that the restrictions will definitely affect availability of L14 and Rivera.

 

[CraigInPA]

I enjoyed your analogy regarding buckets, sand, and cement. It makes it quite easy for people to understand the effect of the new restrictions.

 

[dvcsince93]

Not sure what you can conclude about points since I didn't look at the point average but the breakdown of the value of the contracts sold on resale seems to be similar to that of the direct sale contracts- so my guess is that the average contract point is also similar.

On the contract level, it does say that of the more than 18000 contracts sold by DVD, about 5% have been resold in about 5 1/2 years,

The first resale of VGF was in October 2013 but the 101st resale wasn't until April 2015. So the resale market of resorts that "sell out" in about 2 years may not kick into gear until a lot of the direct sales are done, Thus, it is hard to draw short term conclusions about what will happen with DRR.

BLT had about 37000 direct contracts sold in its first 5 1/2 years and about 1600 resales during that time. So about 4% of its contracts had been resold (which is close to the 5% of VGF).

if you expand the view to look at all of the last 10+ years for BLT, DVD sold 38000 contracts and there have been a little over 4000 resales. So the overall percentage is up to 11% because in the last 5 years there have been about 2400 resales and 1000 direct sales.

On the one hand, the "second" five years of BLT did raise the percent sold of direct contract from 4 to 11%.

On the other hand, if you look at all of contracts at all of the DVC WDW resorts, the total resales are about 10-12 % of total contracts and that seems to be the ballpark number for most of the resorts. So, I am not sure that the next five years will see a substantial increase in the percentage at BLT over the current 11%.

 

[CarolynFH]

Have you looked at resale stats for OKW and BWV, the two oldest WDW DVC resorts? I would think that more original owners there have been “aging out” of their ownerships than original BLT and VGF owners have and that a higher percentage of contracts there would have changed hands by now, and I’m curious to know whether I’m wrong. A corollary would be whether the data you’re looking at distinguishes between gratuitous transfers (original owners passing their contracts on to their kids) and sales, since gratuitous transfers might also account for a gradually increasing percentage of ownership turnover as time goes by.

 

[skippytx]

In trying to better understand resale, I took a look at the numbers for VGF. Since all the sales/resales occured after 2008, there is more searchable data for it and yet there is not as many sales as BLT so it is easier to deal with.

According to the 2018 Condo Notice there were 17597 contracts for VGF outstanding.

According to county records, DVD has sold 18060 contracts as of 6/1/19.

DVD has bought back 325 contracts and there have been 13 foreclosure sales, all bought back by DVD.

Of the DVD sales:

3035 were contracts up to $10K,
10222 were contracts of $10K-25k
4022 were contracts of $25-50K, and
612 were contracts greater than $50K

Resales for VGF contracts totaled 1097, and there were about 436 gratuitious transfers of VGF contracts.

Of the resales:
188 were less than $10K,
634 were $10K-25K,
251 were $25-50K and
32 were greater than $50K

Of the resales, about 60 indivduals, groups, or companies, bought and then sold about 110 contracts on the resale market. Roughly 10 of the individual, groups, companies bought and sold 2 or more contracts and accounted for about 1/2 of the 110 contracts. The 110 contracts represent about 10% of the resale volume.

And the actual total of direct contracts sold on the resale market was about 990 or about 5% of those sold by DVD.

How did you run your numbers? I'm getting different results.

20,198 total deed transactions for VGF

18,064 deeds granted by DVD to someone else (sold)

597 deeds granted to DVD (ROFR and foreclosures)

695 gratuitous deed transfers (doc deed tax $0.70) (family transfers/trusts)

Which leaves 842 deed transactions that did not include disney, or have a doc deed tax of less than 1 dollar. (resales)

That's still less than 5% though if you don't count points technically resold by DVD from contracts they took in ROFR/foreclosure.

 

[dvcsince93]

The only number that I didn't include was the number of deeds that were transfered back to DVD without cost- so not sold through foreclosure by the county and not a buyback but still returned to DVD -that number is 249.

Also, I used $10 tax as the cutoff between sales for value and other sales- but that shouldn't change the numbers by more than a couple.

Other than that, I think that my numbers add up:

18060 Deeds sold by DVD

1097 Resales for value (tax $10 or greater)
436 Gratuitious transfer not associated with DVD (tax $10 or less)-family, trust, etc.

341 Deeds Bought Back by DVD for value(tax $10 or greater)
249 Gratuitious transfer back to DVD (tax $10 or less)
13 Foreclosure sales by Orange County to DVD
_________________________________-
20196 Total Deeds for VGF

You can also confirm the resales by doing a wildcard search for every name except Disney and Orange (county) where the tax is $10+. That also gets the 1097 number.

Not sure but it looks that you may have included the 249 deeds in both the 597-deeds granted to DVD and 695-grat. deed transfer since they are both-grat. deeds granted to DVD.

 

[KAT4DISNEY]

One other thing that will become a factor is if the resale was a qualified contract that was becoming non-qualified or if it was already non-qualified. At this point it shouldn't be much or any that affect the Riviera restrictions but as time goes by there's a decent chance that a resale wouldn't always be moving points from qualified to non-qualified. I've bought resale contracts that I've sold. If I were to downsize today it would be one of the resale that would go.

 

[dvcsince93]

Have you looked at resale stats for OKW and BWV, the two oldest WDW DVC resorts? I would think that more original owners there have been “aging out” of their ownerships than original BLT and VGF owners have and that a higher percentage of contracts there would have changed hands by now, and I’m curious to know whether I’m wrong. A corollary would be whether the data you’re looking at distinguishes between gratuitous transfers (original owners passing their contracts on to their kids) and sales, since gratuitous transfers might also account for a gradually increasing percentage of ownership turnover as time goes by.

I have looked at OKW but not BWV. For data after 6/1/2008, I can distinguish between sales and gratuitious transfers- before that, not so much.

The challenge with OKW (and BWV) data is that for recordations prior to 2008, it is not possible to search by anything except date, grantor and grantee. Since Orange county has more than 10K recordations a month, narrowing searches to specific DVC resorts prior to 2008, has been a challenge.

Prior to 6/1/08, I can get the number of waivers of ROFR that DVD recorded but those don't separate resales and gratuitious transfers without actually reading the waiver.

For OKW, I can see that DVD has sold about 5350 contracts since 2008. I know that DVD says that there are currently about 53000 contracts for OKW.

I can see that there have been about 4200 resales and about 4200 grat. transfers for OKW since 2008.

I can also see that there are about 5400 Waivers of ROFR for OKW and about 1100 for BWV recorded between 1992 and 2008 which waivers are for both resales and grat. transfers.

Another problem with searching deeds at OKW is that when they went from 2042 to 2057, those people that did not pay the extension were asked to file a quitclaim deed for that time, there are thousands of quitclaim deeds filed by DVD from 2008-2010.

 

[CarolynFH]

I have looked at OKW but not BWV. For data after 6/1/2008, I can distinguish between sales and gratuitious transfers- before that, not so much.

The challenge with OKW (and BWV) data is that for recordations prior to 2008, it is not possible to search by anything except date, grantor and grantee. Since Orange county has more than 10K recordations a month, narrowing searches to specific DVC resorts prior to 2008, has been a challenge.

Prior to 6/1/08, I can get the number of waivers of ROFR that DVD recorded but those don't separate resales and gratuitious transfers without actually reading the waiver.

For OKW, I can see that DVD has sold about 5350 contracts since 2008. I know that DVD says that there are currently about 53000 contracts for OKW.

I can see that there have been about 4200 resales and about 4200 grat. transfers for OKW since 2008.

I can also see that there are about 5400 Waivers of ROFR for OKW and about 1100 for BWV recorded between 1992 and 2008 which waivers are for both resales and grat. transfers.

Another problem with searching deeds at OKW is that when they went from 2042 to 2057, those people that did not pay the extension were asked to file a quitclaim deed for that time, there are thousands of quitclaim deeds filed by DVD from 2008-2010.

Thanks. I appreciate the effort you're putting into this!

 

[katandmouse]

Thanks for the analysis. So does this mean approximately every 5 years about 5% of GFV direct points rolled into resale points? Just curious about the rate and amount of dvc points that end up as resale/restricted points now that the restrictions will definitely affect availability of L14 and Rivera.

VGF has only been available since 2013, so about 6 years now. The 5% resales is total for that time. We can’t say that turnover is 1% each year (even though it looks like it), because as @dvcsince93 said, in the first couple years there were very few resales, and now there are more. Same with BLT it looks like. Also, OKW has been sold since 1991 (28 years) but only looks to have 20% resale - that’s not 1% a year.

On the other hand, even though all of DVC is only 10-12% resale now, in the last 2 years about 20% of deeds recorded were resales.

My guess is that, for all resorts, there are very few resales the first few years, but over time the number grows higher, and the rate of growth slowly increases.
I also think that the past few years - with social media blogs and forums like this promoting resales, more resale companies, and easier online transactions - have made resales more of an option that people weren’t as aware of before. Another guess is that the high direct price increases have driven more people to resale, but that’s just my opinion (that’s what we did).

I don’t want to be all doom-and-gloom with this analysis. Even though I think the resale restriction will eventually affect availability, it won’t be for a long time. I don’t know the actual rate of growth, but we’re talking in the 1% range, which is very small. In theory the resale restriction should make it easier to book new resorts and harder to book older resorts, but in reality the numbers affected will be so small for enough time (getting into decades I’d guess) that I don’t think we’ll really notice much of a difference.

What actually surprised me the most about this exercise is that, while the number of resales is rising, the number of direct sales appears to be constant or even maybe decreasing. It’s only 4 data points, so may not be an accurate representation, but if that is the trend... (even though I strongly dislike the restriction and how DVC went about it) I guess I could understand why DVC would want to make resales less desirable.

 

[KAT4DISNEY]

Unless resale restrictions are seen as undesirable to the product and do not drive people to direct sales.

 

[skippytx]

Not sure but it looks that you may have included the 249 deeds in both the 597-deeds granted to DVD and 695-grat. deed transfer since they are both-grat. deeds granted to DVD.

Yeah, I was double counting the deeds going back to Disney with a doc deed tax of .70, which are foreclosures, not grat transfers which I hadn't caught before, so thanks for pointing those out. I will adjust my methods!

 

[CraigInPA]

One other consideration here in your counting is that to accurately do it, you'd need to count each deed only once and then only the final disposition of the deed. For example:
1. If it was originally sold direct in 2015, and then sold resale in 2016, and then resale again in 2018, that would only be one resale deed when you calculate the percentage of resale deeds to direct deeds.
2. If it was originally sold direct in 1995, then sold resale in 2008, and then sold resale in 2012, and then ROFR'd in 2016, and then sold direct in 2016, that would be zero resale, and one direct when calculating the percentage of resale deeds to direct deeds.

I agree with the postulate that the first few years of a new resort that the number of sales by owners is low. I also think we're looking at an escalating resale market, as some of the owners see the increasing maintenance fees and the current value of their points skyrocket as an incentive to "cash out".