Are DVC Restrictions Affecting Resale Prices?

[Frederic Civish]

I have looked for a thread about this, but can't find one, so I apologize, but I would like to discuss what effects, if any, the DVC Restrictions are having on Resale Prices?

Have Resale prices gone down? It seems like some resorts are being offered at 4% or 5% lower than just a few weeks ago. But others don't seem to be moving, yet.

Have more people rushed to put their contracts on the market?

Is there a fall off in people looking to purchase?

What is the sense that the brokers are getting?

As I have said before, there are many reasons why I think Disney should be supporting the Resale price, rather than trying to drive it down. A higher Resale price helps justify Disney's extremely high prices. A higher resale price functions as a pressure release valve for people who buy DVC but then find that their age, family situation or finances change. A higher resale price takes some of the worry out of such an expensive purchase. I think I read some statistics that the 'average' DVC owner only owns their contract for 10 to 15 years. If that is the case, then a good resale market makes it better for them. And making it better for them just increases their Goodwill towards Disney, and helps them promote and recommend DVC to others.

Meanwhile, if Disney wants to get the highest price that they can for their own Direct sales, and if they want to push people towards their own Direct sales, then they need to do two things with respect to the Resale market. First thing is to distinguish themselves as having more value, more convenience and more desirability. This justifies their premium price. I think they have already set themselves off as having more value, so I don't see that they need to keep doing that. Second thing is to try to encourage the highest possible Resale price. Why? Because when your 'competition' costs more, it increases the relative value of your own product. So, if they are really trying to drive prices for resale down, then I think they are only hurting themselves.

So, with the recent changes, what is happening NOW with Resales.

Here is an interesting article from a local Orlando source. Is this article accurate?

Thanks. https://m.orlandoweekly.com/Blogs/a...-their-timeshare-program-a-lot-less-appealing

 

[we"reofftoneverland]

I agree but I think it will affect all sales, not just resales. Only hard core disney fans will by now. Casual buyers will be intimidated.

 

[miTnosnhoJ]

I think the impact will be minimal on the resale market for the Legacy 14 resorts. There was a slight bubble as people rushed to get grandfathered in. But even now, resale buyers can still access all of the Legacy 14.

Over time, as Riviera resales start to appear, the resale prices for Riviera could be sharply lower, because they are limited to staying at Riviera, even at 7 months out.

And as the Legacy 14 resorts reach end of life, there may be some effects. Imagine when all resorts are expired except VGF, Poly, and CCV. But at end of life, you would expect pricing to be very close to the value of the remaining stays, so even then, it should not be a big deal for the Legacy 14.

I think this is why this decision, misguided though it may be, did not get the same amount of pushback as the points inflation for the studios and 1BRs did. Disney may be shooting themselves in the foot, but they are taking nothing away from current owners.

 

[Bearval]

I think the impact will be minimal on the resale market for the Legacy 14 resorts. There was a slight bubble as people rushed to get grandfathered in. But even now, resale buyers can still access all of the Legacy 14.

Over time, as Riviera resales start to appear, the resale prices for Riviera could be sharply lower, because they are limited to staying at Riviera, even at 7 months out.

And as the Legacy 14 resorts reach end of life, there may be some effects. Imagine when all resorts are expired except VGF, Poly, and CCV. But at end of life, you would expect pricing to be very close to the value of the remaining stays, so even then, it should not be a big deal for the Legacy 14.

I think this is why this decision, misguided though it may be, did not get the same amount of pushback as the points inflation for the studios and 1BRs did. Disney may be shooting themselves in the foot, but they are taking nothing away from current owners.

I think the resale value of the L14 will rise in value and only go down when the resorts begin to get closer to their expiration dates. DVD will have no trouble selling Riviera direct since most timeshare buyers don’t consider if they want or have to sell. The resale prices for the new resorts will float somewhere between 30% to 50% due to the restrictions. If I like the new resorts I would be a buyer at the low end of resale prices and if I needed to sell I wouldn’t get crushed like a direct buyer would. Only problem is I feel DVD will be a major buyer of the resale’s at the low prices to repackage and sell as direct. Might be hard to get a resale for a good price, not going to over pay for it due to the restrictions.

 

[DenLo]

I would think that for Direct Sales it will only affect a very small percentage as most DVC purchasers don't really research the product that well. The magic is all they are thinking about. As to resale buyers, I expect that only the resale buyers for Riviera will be affected as only those contracts are restricted to booking at their home resort. All of the others are still allowed to book at any of the Legacy 14 resorts at the 7 month mark and their home resort at the 11 month mark. A few years before 2042 comes around, it might be a different story as so many resorts, BRV, BCV, BWV, HHI, VB and part of OKW, will drop from the DVC system as their deeds expire on January 31, 2042. I expect their resale points will begin declining in value around 10 years before they expire. And the rest of the Legacy resorts resale will be affected when those six resorts are no longer part of the Legacy 14, not much to begin with but eventually their prices will lower since only older resorts will be the only resorts you can trade into.

 

[KAT4DISNEY]

It's too early to tell if or what effect there might be. It's a normal time of year for brokers to have a lot of inventory and prices to soften up.

 

[gharter]

I doubt it will have much effect.
There was a similar discussion when the previous changed occurred. As I recall, prices didn't really change much, and have actually gone up quite a bit since then.
There may be a drop for a short while, but I don't think it will have that big of an impact.

While we are in a situation where we could use our points for the newer DVC resorts they are working on, but at least so far, I have very littel interest in either one.

 

[Wakey]

I don’t think it will really affect Riviera direct sales. A very high proportion are impulse buyers, who do no research, are not educated and don’t consider they will sell. It will put off some educated buyers though, but DVD have figured it will make them a lot more in the long run, lancing the boil of resale and this is the only way to do it.
Of course you may have a lot of disgruntled buyers when they come to sell Riviera, if they see then prices of the original 14 DVC 1 resorts are holding up much better than Riviera. I foresee plenty of ‘I wasn’t told my Riviera was worth so little’ type complaints on forums and Facebook one day.

 

[Networth]

With the mad rush to purchase prior to the grandfather deadline many would be buyers probably got what they need. Leading to higher supply for contracts at the moment.

 

[Frederic Civish]

I would be interested in whatever the resale price trends are, over the next few months, no matter what happens, up/down or the same.

 

[MB_01]

I've noticed a slight downtick in prices but nothing major. Previous poster is probably right that it's just an effect of the brokers having so much inventory. AKV has dropped a few bucks and I'm seeing SSR listed for under $100 a point which it was not all the way through Xmas. I blame this lousy economy. I'm looking to add on in a big way and was hoping there would be a bigger drop! People seem to have money to burn these days if CCV is having 200000 direct point sales months. On the flip side I haven't seen dramatic resale price increases on BLT like I remember seeing at VGF when it went over $200 direct.
What I imagine a VGF direct buyer looks like these days!

 

[CarolMN]

More than a few of the contracts are really stripped & have no points available until 2021.

 

[skippytx]

Haven't noticed too much of a change. This tends to be a slower time to sell DVC resale, in the past it seems to heat up closer to summer months and then relax around the holidays.

Smaller contracts at high point cost resorts have gone up a bit. I own at BLT and pay the most attention to that and there hasn't been much of a change surprisingly.

 

[Frederic Civish]

More than a few of the contracts are really stripped & have no points available until 2021.

Yes, I noticed that many of the cheaper contracts were 'Stripped' as much as possible.

Haven't noticed too much of a change. This tends to be a slower time to sell DVC resale, in the past it seems to heat up closer to summer months and then relax around the holidays.

Smaller contracts at high point cost resorts have gone up a bit. I own at BLT and pay the most attention to that and there hasn't been much of a change surprisingly.

Some resorts do not seem to have dropped at all, but AKV is down perhaps $6 to $8 a point. And OKW is down a bit. However, I agree that this might just be from the season, AND, there is the fact that with the 'Announcement' last month, many people who were on the fence rushed to buy in last month. That means that there are less people in the market, looking for contracts this month. I expect that effect will continue for a few more months, but if that is all that is happening, then prices should recover.

 

[Jerry@dvcstore]

From my observations (working at The Timeshare Store,Inc.® as a resale specialist) the currently resale prices have remained the same since Disney made the change on January 18th. If anything some Sellers are a bit more negotiable with offers, but the list prices have been within the same ranges before the change.

 

[ScubaCat]

I've never noticed any of the restrictions affect prices, really. That may change when people try to sell Riviera, though. Being only able to book your home resort is a pretty substantial reduction in value.

 

[Frederic Civish]

From my observations (working at The Timeshare Store,Inc.® as a resale specialist) the currently resale prices have remained the same since Disney made the change on January 18th. If anything some Sellers are a bit more negotiable with offers, but the list prices have been within the same ranges before the change.

Thanks Jerry. Good to get your perspective. Someone was saying that the Resales people were 'worried' about the recent DVC changes and restrictions, but I think you are right. In the end, these most recent restrictions on Resale owners is not going to drive prices down.

Though I also recognize that from your point of view, a sale is a sale, and if it is selling for less, it is still a commissioned sale to you. So you guys are probably protected NO MATTER WHAT. Resale prices dropping for you guys isn't much of a problem. Only if resales goes away, and that isn't likely to happen, because they can not PREVENT resales, and it is a self adjusting market. If there are less sales, the price drops to a point where it is attractive, and sales just continue.

I've never noticed any of the restrictions affect prices, really. That may change when people try to sell Riviera, though. Being only able to book your home resort is a pretty substantial reduction in value.

I don't know what they are going to do with Riviera. It seems clear that Riviera is going to be the start of some 'New Type of DVC' perhaps, essentially, DVC 2.0 But I just have to think that Riviera is going to look so limited compared to the L14 that, unless they do something else to 'Augment' DVC, then Riviera will almost certainly sell at a Discount on the Resales Market.

 

[Wakey]

A resale buyer is generally an educated buyer, by its very nature.
I doubt many educated buyers would be willing to stump up $100+ for points they can use at one resort only.
Not only that, but you would have to book close to 11 months, or else risk having useless points you couldn't do anything with. That also rules out a big chunk of the domestic American market who don't have that flexibility.
Also if you have to cancel, there will be little chance of a late fall back trip to SSR/ OKW/ AKV.
All this will add up to the educated buyer only being interested at bargain prices.

 

[Bearval]

Thanks Jerry. Good to get your perspective. Someone was saying that the Resales people were 'worried' about the recent DVC changes and restrictions, but I think you are right. In the end, these most recent restrictions on Resale owners is not going to drive prices down.



I don't know what they are going to do with Riviera. It seems clear that Riviera is going to be the start of some 'New Type of DVC' perhaps, essentially, DVC 2.0 But I just have to think that Riviera is going to look so limited compared to the L14 that, unless they do something else to 'Augment' DVC, then Riviera will almost certainly sell at a Discount on the Resales Market.

If the "float" price on the resales for Riviera is at or lower than what it cost DVD cost to build it, DVD will ROFR them to repackage and sell as direct points. I feel that this is their long term plan, to always have something to sell for all new DVC resorts going forward without having to pay the currently "high" resale prices.

 

[Bearval]

A resale buyer is generally an educated buyer, by its very nature.
I doubt many educated buyers would be willing to stump up $100+ for points they can use at one resort only.
Not only that, but you would have to book close to 11 months, or else risk having useless points you couldn't do anything with. That also rules out a big chunk of the domestic American market who don't have that flexibility.
Also if you have to cancel, there will be little chance of a late fall back trip to SSR/ OKW/ AKV.
All this will add up to the educated buyer only being interested at bargain prices.

I am betting the initial resale prices for Riviera will be at 60% of direct but will quickly drop to 30% as soon as a lot of contracts start being offered for resale in 3 to 4 years.