Analysis of DVC Sales, Resales, and Restrictions

[dvcsince93]

That would be a major undertaking. Even with the advanced searching available on the county website since 2008, the data that you would need to search by isn't typically entered so it really can't be searched. They only way I think you can provide the info you want is to look at every deed- which would take forever.

The VGF data I discussed above, was based on matching resale buyers and resale sellers by name. That is, if the same person/entity was the grantee and then the grantor, a contract was considered to have been resold. It is certainly possible that a person would buy direct, then buy resale and then sell the direct contract and keep the resale- that would also show the same person as the buyer and seller of a contract. That is why the numbers are only approximate.

For VGF, I found about 60 owner entities that both bought and sold a VGF contract. While a cursory search of a few seemed to indicate it was the same contract- I did not check them all. Also, these 60 owners, bought and sold a total of about 110 VGF contracts. A few of them were clearly flipping contracts-but most (about 50) were people who appeared to buy a contract and then sell it 2-3 years later.

As to an escalating market, clearly the number of resales is increasing but I think that has more to do with the fact that there are now 360000+ contracts out there and growing- I haven't seen where the proportion of direct contract that are being resold resale is changing greatly. A vast majority of people seem to be keeping their contracts.

 

[katandmouse]

Thank you all for your input! All these ideas are helping me gain a better perspective of DVC.

I don’t think we can ever know the exact numbers, but I think what you’ve been able to find so far is very informative.

As to an escalating market, clearly the number of resales is increasing but I think that has more to do with the fact that there are now 360000+ contracts out there and growing- I haven't seen where the proportion of direct contract that are being resold resale is changing greatly. A vast majority of people seem to be keeping their contracts.

I essentially agree with you. As long as DVC sells more direct contracts than owners sell their contracts (creating resale), this won’t be an issue. The question is whether resales would ever outnumber the new direct contracts sold - and according to the estimates here, even though resales are rising, it would take so long to reach that number of direct sales that it won’t really affect owners.

However, another wrench in the cogs - if the number of direct sales is actually decreasing (looking at those snapshots of the first 45 days new resorts are sold makes it appear to be the case) then we would reach that equilibrium point sooner. Again, that “sooner” is relative, not for many years still.

Maybe the bigger question is how DVC could add value to their product in order to increase direct sales and discourage owners from selling. Maybe the resale restriction would do that, scaring some away from resales. But the basic reasons for resales will still be there (reasons for owners selling and buyers looking for a deal), so IMO the restriction is more of a negative than added value, and in the long run not a good strategy.

 

[dvcsince93]

Good luck with the analysis and feel free to ask if you are looking for any particular data.

My primary goal in understanding the recordation system is to figure out how many resales are occuring, what percentage of direct contracts are sold on the resale market, what percentage of resales are subsequently resold and how long people hold their contracts. Unfortunately, the problems I encounter searching for things that occured prior to 2008 makes the whole exercise much more difficult. Not sure that it can be done without diving into the actual contracts or getting info from DVD.

 

[katandmouse]

Good luck with the analysis and feel free to ask if you are looking for any particular data.

My primary goal in understanding the recordation system is to figure out how many resales are occuring, what percentage of direct contracts are sold on the resale market, what percentage of resales are subsequently resold and how long people hold their contracts. Unfortunately, the problems I encounter searching for things that occured prior to 2008 makes the whole exercise much more difficult. Not sure that it can be done without diving into the actual contracts or getting info from DVD.

Thanks! As always, I am interested to know what you find. I completely understand about the database limitations though and commend you for undertaking it as far as you have!

 

[dvcsince93]

I have been trying to figure a way to analyze sales before 2008, this was what I found today:

The first deed for DVC was recorded on 1/9/1992, from that date:

-to 8/13/1996 when the 1st BWV deed was recorded, DVD sold a total of 23590 OKW contracts.
-to 1/17/2001 when the 1st VWL deed was recorded , DVD sold a total of 65927 contracts-41K OKW, 25K BWV.
-to 6/3/2002 when the 1st BCV deed was recorded, DVD sold a total of 76744 contracts
-to 5/11/2004 when the 1st SSR deed was recorded, DVD sold a total of 97177 contracts
-to 3/4/2007 when the first AKV deed was recorded, DVD sold a total of 155449 contracts.
-to 10/30/2008, when the first BLT deed was recorded, DVD sold a total of196167 contracts.
-to 6/6/13 when the first VGF deed was recorded, DVD sold a total of 275451 contracts
- to 1/27/15 when the first PVB deed was recorded DVD sold a total of 299637 contracts,
-to 4/14/17 when the first CCV deed was recorded, DVD sold a total of 330580 contracts and
-to 4/12/19 when the first DRR deed was recorded, DVD sold a total of 366317 contracts.


Also, DVD, for some reason, did not record the first SSR contract until May 11 2004 which when the resort opened but was more than 6 months after sales started- so that the number of deeds recorded in the first 19 days was more than 7000. That is why it is hard to judge the success of a resort by how quickly DVD deeds show up online.

 

[mustinjourney]

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.

The other theory could be that Disney actually caused the growing resale "problem" by making restrictions between direct and resale. Think about it. How many purchasers would have even been aware about resale market except for the fact that Disney promotes that by buying direct, you get extra membership perks.

Potential buyer then asks "buying direct? Well how can you buy indirect?"

Potential buyer then goes on internet and finds tons of information and realizes that they can save even more money.

 

[katandmouse]

At first I was focusing on the number of increasing resales. Then I started wondering about DVC direct sales - is the rate of direct sales increasing, constant, or decreasing?

I just tried my hand at searching the OCC website. I selected “Deed” as the drop-down document type, typed Disney Vacation Development as the Grantor and selected “Exact Match,” and searched 1/1-12/31 for each year beginning 2018 and going back to 2001, when my search failed me (for some reason got 0 results, and only 3 in 2000). I only looked at the total DVD deeds recorded for each year. I could not figure out how to check which ones were double-counted (say DVD bought back a contract in one year then resold it as direct in the next). I would appreciate any help to check if these numbers look right.

NUMBER OF DVD DIRECT DEEDS RECORDED EACH YEAR
2002: 999
2003: 10,167
2004: 14,592
2005: 20,371
2006: 19,726
2007: 24,098
2008: 25,102
2009: 20,515
2010: 16,443
2011: 16,744
2012: 15,352
2013: 15,588
2014: 13,261
2015: 13,672
2016: 13,951
2017: 17,750
2018: 17,098

Based on this very basic search, it looks like DVC was increasing sales at a steady clip until 2008, then a decline that continued until 2014, then steady/slow gains - then a sharp jump back up in the last 2 years.

 

[KAT4DISNEY]

At first I was focusing on the number of increasing resales. Then I started wondering about DVC direct sales - is the rate of direct sales increasing, constant, or decreasing?

I just tried my hand at searching the OCC website. I selected “Deed” as the drop-down document type, typed Disney Vacation Development as the Grantor and selected “Exact Match,” and searched 1/1-12/31 for each year beginning 2018 and going back to 2001, when my search failed me (for some reason got 0 results, and only 3 in 2000). I only looked at the total DVD deeds recorded for each year. I could not figure out how to check which ones were double-counted (say DVD bought back a contract in one year then resold it as direct in the next). I would appreciate any help to check if these numbers look right.

NUMBER OF DVD DIRECT DEEDS RECORDED EACH YEAR
2002: 999
2003: 10,167
2004: 14,592
2005: 20,371
2006: 19,726
2007: 24,098
2008: 25,102
2009: 20,515
2010: 16,443
2011: 16,744
2012: 15,352
2013: 15,588
2014: 13,261
2015: 13,672
2016: 13,951
2017: 17,750
2018: 17,098

Based on this very basic search, it looks like DVC was increasing sales at a steady clip until 2008, then a decline that continued until 2014, then steady/slow gains - then a sharp jump back up in the last 2 years.

DVC definitely slowed down during the recession but VGC was one of the resorts that began sales in 2009 and then Aulani in 2010 which would add to those numbers so it may not have been quite as sharp of a drop as it appears to be based on FL filings.

 

[crvetter]

At first I was focusing on the number of increasing resales. Then I started wondering about DVC direct sales - is the rate of direct sales increasing, constant, or decreasing?

I just tried my hand at searching the OCC website. I selected “Deed” as the drop-down document type, typed Disney Vacation Development as the Grantor and selected “Exact Match,” and searched 1/1-12/31 for each year beginning 2018 and going back to 2001, when my search failed me (for some reason got 0 results, and only 3 in 2000). I only looked at the total DVD deeds recorded for each year. I could not figure out how to check which ones were double-counted (say DVD bought back a contract in one year then resold it as direct in the next). I would appreciate any help to check if these numbers look right.

NUMBER OF DVD DIRECT DEEDS RECORDED EACH YEAR
2002: 999
2003: 10,167
2004: 14,592
2005: 20,371
2006: 19,726
2007: 24,098
2008: 25,102
2009: 20,515
2010: 16,443
2011: 16,744
2012: 15,352
2013: 15,588
2014: 13,261
2015: 13,672
2016: 13,951
2017: 17,750
2018: 17,098

Based on this very basic search, it looks like DVC was increasing sales at a steady clip until 2008, then a decline that continued until 2014, then steady/slow gains - then a sharp jump back up in the last 2 years.

DVCNews does a pretty decent job of tracking monthly sales @wdrl I believe is the one that does all the tracking. This has a high level of detail from the number of points to the number of contracts and for which resorts.

I just wish DVCNews would consolidate it all to a single spreadsheet we could view but you can click through the pages and find info going pretty far back.

https://www.dvcnews.com/index.php/dvc-program/financial/news-34867
As an aside I went and looked at the WDC annual reports to see if they provide info, turns out very little but some interesting things were found. For instance it says about 550 rooms will be brought on board with Riviera and Reflections. So that means Reflections (about 200) will be smaller than Riviera (341 rooms) which might also explain their desire to add the high point units (cabins or whatever they call them over there). It also says that Disney hotel rooms (domestic) were at 88% capacity for 2018. It does also say the margins on DVC builds is double digits so very profitable for the company, as reported in 2008, with the intention of DVC to provide a free cash flow for investment back into the company's other segments or divisions within a segment.

 

[dvcsince93]

When you are doing searching on the OC website, the way in which deeds were entered has not always been consistent.

For example for a period of time from 1998-2002- DVD was recorded as Disney Vac Dev not Disney Vacation Development. This has also occured infrequently since then.

When looking at DVD sales, I typically try to do a wild card grantor search "disney vac*" (including the "" because otherwise it is searched as disney OR vac* which give you anything with vacation in the tite) which seems to get all of the various options- though it still doesnt get "DVD" which is how it is entered in a few deeds.

Good Luck!

 

[katandmouse]

All good to know, thanks!

I was forgetting about VGC and AUL - that makes a lot more sense now.

And the Disney Vac Dev etc would explain my search problems before 2002, and some others I’ve missed.

On a side note, I really thought Reflections would have more DVC rooms than Riviera... Guess I’m not too surprised about the DVC cash flow...

Off to putter around DVCNews for a bit!

 

[wdrl]

The easiest way to identify direct sales of DVC deeds on the Orange County Comptroller's website is to use 'Disney' in Grantor field. Some false positives will appear from time to time, but it will capture 99.99+% of the direct deeds..

 

[zavandor]

As an aside I went and looked at the WDC annual reports to see if they provide info, turns out very little but some interesting things were found. For instance it says about 550 rooms will be brought on board with Riviera and Reflections. So that means Reflections (about 200) will be smaller than Riviera (341 rooms) which might also explain their desire to add the high point units (cabins or whatever they call them over there).

Leaked plans and artworks show a big resort which surrounds a Stormalongueque pool. 200 seem very low. Maybe 200 are only the DVC wing? 200 of which 20 might be costly bungalows/cabins/rehab pods. Another booking nightmare.

 

[crvetter]

Leaked plans and artworks show a big resort which surrounds a Stormalongueque pool. 200 seem very low. Maybe 200 are only the DVC wing? 200 of which 20 might be costly bungalows/cabins/rehab pods. Another booking nightmare.

Correct it is mixed use and the statement was that 550 DVC units would be brought online with Reflections and Riviera. In total the hotel is about 900 hotel rooms and DVC units.

Sorry my post was a bit ambiguous now that I reread it.