best guess where resale prices will be in 2 years?

[MIALIAS]

I'm thinking a few factors should help bring the price down:

1) The biggest - less time before the expiration. Theres only so much time to be able to use it.
2) With Grand Floridian coming people will be selling theirs to buy there.


I'm thinking

BLT might be $75 resale
BC $55
bw $45
ak $45
ss $40

what are your thoughts, more or less??????????

 

[ELMC]

I think that the two biggest factors influencing the price of resales in the future are the number of contracts for sale and any additional restrictions that Disney might potentially place on resale contracts. Both of these factors would significantly impact resale prices, but both are pretty much unpredictable, making it hard to speculate where resale prices will be in two years. My thinking is that your estimates are a little too optimistic (or pessimistic, depending on whether you are a potential buyer or a potential seller).

 

[OKW Lover]

I'd add one more factor to ELMC's comments above. The point at which DVC exercises its ROFR options acts as a kind of "floor" to the resale price.

 

[chalee94]

I'd add one more factor to ELMC's comments above. The point at which DVC exercises its ROFR options acts as a kind of "floor" to the resale price.

i tend to disagree with this (as would many other timeshare hobbyists.) but the arguments can go round and round.

i would add that inflation, lower gas prices and higher employment (better general economy would improve demand) might support prices.

 

[Brian Noble]

I think that the two biggest factors influencing the price of resales in the future are the number of contracts for sale and any additional restrictions that Disney might potentially place on resale contracts.

I agree with you about the first point. I'm not so sure about the second.

So far, the restrictions imposed are immaterial from the point of view of a strictly dollars-and-cents analysis. For the most part, other timeshare operators' resale "restrictions" follow the same pattern---they sound like big deals, but when you really look carefully, few are substantial, and none justify the existing spread between developer and secondary purchases, let alone an increase in that spread.

as would many other timeshare hobbyists

Add me to this list. DVC resale prices were dropping well before DVC stopped exercising. I admit that I have not done the regression, but it appears to me that the price drops did not appreciably accelerate after DVC stopped exercising. You see the same with other systems as well---the data does not seem to support the hypothesis via eyeball test. A more careful analysis might turn up something, but I suspect it is at most a modest impact.

Ultimately, resale prices will be determined by a combination of how many people are looking to sell and how many people are looking to buy---and how badly each side wants to accomplish its goal.

 

[DougEMG]

Ultimately, resale prices will be determined by a combination of how many people are looking to sell and how many people are looking to buy---and how badly each side wants to accomplish its goal.

Exactly.

Personally I don't think that the prices will go that low in two years. For SSR prices to drop to $40 a point, the market would have to be flooded with sellers looking to dump their points and there would have to be very few buyers.

 

[cz4ever]

I'm thinking a few factors should help bring the price down:

1) The biggest - less time before the expiration. Theres only so much time to be able to use it.
2) With Grand Floridian coming people will be selling theirs to buy there.


I'm thinking

BLT might be $75 resale
BC $55
bw $45
ak $45
ss $40

what are your thoughts, more or less??????????

The other PPs have covered most of the points I wanted to mention, except one. Another factor that provides a floor under the price of DVC contracts is the persistently strong points rental market. DVC points have been renting for $10/ea for many years. The points rental market reduces the pressure on sellers to unload their contracts, because owners can cover their annual MFs fairly easily even if they can no longer afford to go to WDW every year. And services like Daddio's make it pretty dang easy if you're not trying to squeeze every last dollar out of your contract.

Also, if MFs do not increase dramatically, the economics of buying DVC with the primary intent to rent out points gets increasingly attractive as the upfront costs drop. At $40/point for SSR, renting for $10/point is a very attractive proposition. Disney does have a "not for commercial use" policy, but at least for now it's infrequently and gently invoked.

I personally suspect point costs will remain roughly where they are now, perhaps with other resorts dropping down to the $50 range like OKW and SSR, and increasingly VWL and BWV. But, honestly, who knows?

 

[a742246]

My guess would hinge on the economy. If the economy strenghens prices will inch up, if it falls prices will fall.

Right now it looks like prices inched up since March. That could be caused by the seasonal "mood" or with Disney ROFR more contracts or with BLT close
to selling out.

I would say the major portion of resale selling prices for all resorts will remain where they are now.

 

[DougEMG]

The other PPs have covered most of the points I wanted to mention, except one. Another factor that provides a floor under the price of DVC contracts is the persistently strong points rental market. DVC points have been renting for $10/ea for many years. The points rental market reduces the pressure on sellers to unload their contracts, because owners can cover their annual MFs fairly easily even if they can no longer afford to go to WDW every year. And services like Daddio's make it pretty dang easy if you're not trying to squeeze every last dollar out of your contract.

Also, if MFs do not increase dramatically, the economics of buying DVC with the primary intent to rent out points gets increasingly attractive as the upfront costs drop. At $40/point for SSR, renting for $10/point is a very attractive proposition. Disney does have a "not for commercial use" policy, but at least for now it's infrequently and gently invoked.

I personally suspect point costs will remain roughly where they are now, perhaps with other resorts dropping down to the $50 range like OKW and SSR, and increasingly VWL and BWV. But, honestly, who knows?

I agree with your reasoning here. With points renting for an average of $11/point, buying SSR at $40/point is a no brainer. So before it ever hits $40 a points, I'd be more than willing to buy it at $41/point

 

[AllieV]

I have but one example; take it with a grain of salt.

I've been watching BWV resales for about 8-10 years. Somewhere around 5-6 years ago, it was still going for the mid 80s then started coming down. Now you can get it mid 60s. It's hard to account for the economic toll vs other factors (dilution via more construction, longer years available), but that's about $2 a year per point if you go back 10 years ago. If you figured it started coming down around 5 years ago, then $4 a year per point.

You can always get a deal. Or you can always pay a pint of blood. But logically, I'd count on the average price being lower by $3-$4 per point two years from now. If the economy booms, then you'll see a lot of people buying back in who had to sell due to job loss, etc., and the price could go up. I wouldn't count on that, though. Not in a mere two years.

Helpful, huh?

 

[CarolMN]

IMO, the price will also depend on what Disney is charging to stay on site in the non-DVC resorts. If those prices go up, so will the value of a DVC contract.

When I purchased, I compared the cost of DVC with the cost of a moderate because that is where we usually stayed. In a way, I suppose this is really strongly related to the rental market argument.

 

[Dean]

I'm thinking a few factors should help bring the price down:

1) The biggest - less time before the expiration. Theres only so much time to be able to use it.
2) With Grand Floridian coming people will be selling theirs to buy there.


I'm thinking

BLT might be $75 resale
BC $55
bw $45
ak $45
ss $40

what are your thoughts, more or less??????????

I think that's relatively close to where they should be now. IMO, the resale company setup is propping up the prices somewhat, that's great for them and for the sellers if they can cont to be successful. There have already been a number of sales at or less than your levels from what I understand though. Otherwise the price point, what ever it really is, should slowly decrease over time propped up to a mild to moderate degree by price increases. ROFR won't have any impact unless DVC starts taking contracts at prices higher than sales are going at.

 

[MickeyFan612]

The other PPs have covered most of the points I wanted to mention, except one. Another factor that provides a floor under the price of DVC contracts is the persistently strong points rental market. DVC points have been renting for $10/ea for many years. The points rental market reduces the pressure on sellers to unload their contracts, because owners can cover their annual MFs fairly easily even if they can no longer afford to go to WDW every year. And services like Daddio's make it pretty dang easy if you're not trying to squeeze every last dollar out of your contract.

Also, if MFs do not increase dramatically, the economics of buying DVC with the primary intent to rent out points gets increasingly attractive as the upfront costs drop. At $40/point for SSR, renting for $10/point is a very attractive proposition. Disney does have a "not for commercial use" policy, but at least for now it's infrequently and gently invoked.



I personally suspect point costs will remain roughly where they are now, perhaps with other resorts dropping down to the $50 range like OKW and SSR, and increasingly VWL and BWV. But, honestly, who knows?

I agree with it all...nicely said. The rental market is so important for DVC to continue to be successful...With the economic downturn can you imagine how many foreclosures Disney would have seen over the last several years if people didn't have that option. I also think DVC prices are going to stay steady over the next couple of years! As more and more people start renting their points they will have less of a desire to sell. I've rented points through a broker this past year that claims his business has grown 300%. What will it have grown to by next year? My advice is buy now and do not wait for price drops...it's WDW

 

[MIALIAS]

interesting debate...but I still offer the statement that (unlike most timeshares) there is an expiation date here. Two years is another trip or 2 that wont be there for the resale buyer when the points expire...it's like buying a car with more milage used.

Plus we have all seen the prices go steadily down - why would you think that would change?

And in general how many timeshares do you see going up in price?

 

[DougEMG]

And in general how many timeshares do you see going up in price?

Very few and not something I would count on, but I think OKW prices have increased perhaps as much as $5/point this last year because of all the ROFR activity by Disney.

 

[Brian Noble]

IMO, the price will also depend on what Disney is charging to stay on site in the non-DVC resorts. If those prices go up, so will the value of a DVC contract.

Except that over the past several years, the resort prices *have* gone up, yet resale prices have done *down*, and rental prices have remained stubbornly constant.

The "value" of the contract does go up (vs. what you pay for a cash reservation), but the *price* of a contract---either to buy it or to rent it---does not seem to have.

 

[DougEMG]

Except that over the past several years, the resort prices *have* gone up, yet resale prices have done *down*, and rental prices have remained stubbornly constant.

The "value" of the contract does go up (vs. what you pay for a cash reservation), but the *price* of a contract---either to buy it or to rent it---does not seem to have.

I disagree about the rental rates staying constant. Two years ago I would say that the average rate was $10/point and rates had been that way for a long time. Now it is $11/point and for high demand times/resorts it is $12/point or higher.


I suspect the majority of renters want to recover at least double their MF per point. If your MF increase by 10 cents a point, you aren't going to increase your rental rate, but once your MF have increased by 50-60 cents per point, you are going to be looking to increase your asking price.

As long as Disney continues increasing room rates, making rentals a good deal for the renters, then rental rates will continue to increase.

 

[Dean]

interesting debate...but I still offer the statement that (unlike most timeshares) there is an expiation date here. Two years is another trip or 2 that wont be there for the resale buyer when the points expire...it's like buying a car with more milage used.

Plus we have all seen the prices go steadily down - why would you think that would change?

And in general how many timeshares do you see going up in price?

Expiration or not, lost years of usage has some cost and reduced value. As for prices of timeshares, top options hold their value better than most and DVC would fit into this category. Unfortunately the nature of retail timeshare sales is that the real value is usually about half the sale price compared to construction costs and it's downhill from there.

 

[Dean]

I disagree about the rental rates staying constant. Two years ago I would say that the average rate was $10/point and rates had been that way for a long time. Now it is $11/point and for high demand times/resorts it is $12/point or higher.


I suspect the majority of renters want to recover at least double their MF per point. If your MF increase by 10 cents a point, you aren't going to increase your rental rate, but once your MF have increased by 50-60 cents per point, you are going to be looking to increase your asking price.

As long as Disney continues increasing room rates, making rentals a good deal for the renters, then rental rates will continue to increase.

I've been watching resale costs since 1995. With minor variations, they have changed very little for those who know what they're doing. Sure it's easier to find distressed points at a lower price now and after 9/11 many rented for much cheaper but overall they have changed very little from $10-10.50 in 1995 to around $13 a point now. Certainly an increase but not nearly to the degree that room costs have gone up.

 

[cz4ever]

I've been watching resale costs since 1995. With minor variations, they have changed very little for those who know what they're doing. Sure it's easier to find distressed points at a lower price now and after 9/11 many rented for much cheaper but overall they have changed very little from $10-10.50 in 1995 to around $13 a point now. Certainly an increase but not nearly to the degree that room costs have gone up.

I'm surprised owners were able to get $10-$10.50 back in 1995. I'm not doubting you, just surprised that the rental market was that high given the much lower (I assume) cash price of equivalent deluxe on-site resorts back then. Given the much lower MFs back then, that was quite the deal for owners.