Buyer's market?

[a Really Bad Egg]

For those of you have trended on the number of DVC resales available, is it my imagination or are there way more contracts available than even a few months ago? Is the list growing really quickly?

I seem to remember not long ago (a year) there were not many BCV for sale - and now it seems you can get anything you want.

Are we in for a major correction on prices to the low side?

TIA.

 

[DVC Grammy]

Last month, someone suggested that it was due to Taxes. Others have suggested it's due to some DVCers selling existing contracts in order to buy AKV. Maybe it has something to do with the fact that most real estate sellers put their properties on the market in the spring.
I never saw DVC as short-term, so if it's a reflection of the economy (although supposedly it's "good"), I'm willing to wait it out. (I figure my DVCs will be my kids' concern............let them worry about it ).

 

[rigsby25]

I am wondering if it is some professional renters trying to get rid of some of their contracts now that they are tightening up on rentals.

 

[crisi]

Due to ROFR, I don't think its ever a "buyers market." Disney has no interest in letting the contracts go for cheap. Even when there are lots of them out there - particularly those BCVs contracts. They can sell them as add ons.

 

[a Really Bad Egg]

Due to ROFR, I don't think its ever a "buyers market." Disney has no interest in letting the contracts go for cheap.

But what about supply and demand? If the supply outweighs demand, then the price is obviously not attracting buyers.

Disney has already sold these once - so they got their money. Seems like their motivation would be to find buyers for the points to fill the rooms, buy the tickets, food etc.

I can see Disney not being motivated to allow contracts to go for a lower price if contracts were disappearing faster than they are showing up on the market.

From my view, seems like there are more on the market than ever before, but I've not been around that long to analyze it fully.

 

[littlestar]

When you think about over 100,000 members, those resales are just a drop in the bucket.

 

[FamilyGuy]

Disney has already sold these once - so they got their money. Seems like their motivation would be to find buyers for the points to fill the rooms, buy the tickets, food etc.

If they (Disney) buy the points back as ROFR, they paid back a significant portion of the money that was initially realized. Additionally, the annual dues factor into the equation also.

Among other sources, TTS will tell you there is no major glut in DVC contracts. I agree there are more on the market, but the sky is certainly not falling.

I am confident that Disney will manage to keep pricing and demand high enough (that pricing with not dramtically fall). Disney has a lot more at stake than any of us individual DVC members.

 

[JimMIA]

Due to ROFR, I don't think its ever a "buyers market." Disney has no interest in letting the contracts go for cheap. Even when there are lots of them out there - particularly those BCVs contracts. They can sell them as add ons.

Yep...what she said.

 

[Parkhopper13]

At the risk of being called an appeaser, I think you are all right.

There does seem to be a larger number of contracts up for sale, I have followed the resale market for about a year and it seems to be growing. This might simply be explained by the growing number of DVC members, or even by people running into issues paying their home mortgages, due to this current subprime mortgage crunch.

I also believe Disney will only be able to maintain pricing based on supply and demand. If they find they are exercising their ROFR very often and are generating a backlog of contracts, they will reduce the price at which they exercise ROFR, thus lowering the overall price of the resale market.

Only time will tell if this is just a short-term glut of contracts or a longer-term trend lower in prices.

 

[CarolMN]

For those of you have trended on the number of DVC resales available, is it my imagination or are there way more contracts available than even a few months ago? Is the list growing really quickly?

I seem to remember not long ago (a year) there were not many BCV for sale - and now it seems you can get anything you want.

Are we in for a major correction on prices to the low side?

TIA.

With all due respect, what is the basis for your conclusion that there are more resales available?

If you are only looking at the resales listed on a few online brokers' websites, you are not looking at a representative sample! (And not all of the contracts handled by a broker even make it to the website listing).

Maybe the brokers' websites you frequent are just doing a better job of marketing than the others out there - doesn't mean there are more resales than there have been in the past.

Maybe the proportion of resale contracts to total contracts sold is the same as it's always been - DVC is still growing.

Only Disney has enough valid data to say whether resales are trending up or down or are relatively stable.

 

[crisi]

But what about supply and demand? If the supply outweighs demand, then the price is obviously not attracting buyers.

Disney has already sold these once - so they got their money. Seems like their motivation would be to find buyers for the points to fill the rooms, buy the tickets, food etc.

I can see Disney not being motivated to allow contracts to go for a lower price if contracts were disappearing faster than they are showing up on the market.

From my view, seems like there are more on the market than ever before, but I've not been around that long to analyze it fully.

I don't think so. I think Disney's motivation is to sell $15,000 VAK and SSR contracts in the short term. Keep in mind that DVD is a seperate division from the parks - with seperate P&L statements rolling up - they don't care how many souvieniers are sold - and it would take a lot of Mickey Bars to make up for not selling those straight from DVC contracts.

It harms Disney not at all to have contracts sitting out on the resale market not selling at $90 - dues are still required even if you don't use the points. If a contract goes through at a bargain, Disney snaps it up. If they don't sell it immediately as an add on, they reuse the points as CRO rooms. They are interested in protecting the demand for their new resorts, as long as that is the case, they will control the supply of low priced points through ROFR. Until Disney starts running "add more points at home" promotions, I won't think that Disney believes there to be a supply problem, and with ROFR, theirs is the only opinion that matters.

 

[dianeschlicht]

At the risk of being called an appeaser, I think you are all right.

There does seem to be a larger number of contracts up for sale, I have followed the resale market for about a year and it seems to be growing. This might simply be explained by the growing number of DVC members, or even by people running into issues paying their home mortgages, due to this current subprime mortgage crunch.

I also believe Disney will only be able to maintain pricing based on supply and demand. If they find they are exercising their ROFR very often and are generating a backlog of contracts, they will reduce the price at which they exercise ROFR, thus lowering the overall price of the resale market.

Only time will tell if this is just a short-term glut of contracts or a longer-term trend lower in prices.

I think you are "spot on" in all regards.

 

[a Really Bad Egg]

With all due respect, what is the basis for your conclusion that there are more resales available?

OP was asking for others' observations and not coming to conclusion...if I read it correctly.

 

[jarestel]

Are we in for a major correction on prices to the low side?

TIA.

I don't think so. People buy and sell DVC memberships all the time for various reasons. I'm not inclined to believe there is any more "softness" in the market today than there was last year. At some point the "older" resorts will no doubt begin to slide down in resale price, but we're still a ways off from that day. The number of BCV resales no doubt have something to do with the price they are currently selling for... quite high!

 

[CarolAnnC]

You know the overall trend with DVC has been fantastic. I look at the starting price way back for OKW and the price it has risen to now for AKV and I am just amazed.

I have had so many many enjoyable vacations, wrote off on taxes where appropriate, and still could turn around and sell my DVC for a profit today if I wanted to (which I won't do lol).

It is like the stock market. You cannot look at just one small window, you have to look at overall trends across years.

And BTW, will NOT be selling my BCV points here, LOL!

 

[CPTJAK]

There are more BCV contracts for sale as compared to last two years at this time at 4 major broker sites. Why?

1. High price makes it attractive to sell
2. High price makes it less attractive to Buy
3. Animal Kingdom for sale
4. The years left on the contract are making others (SSR/AKVL) more attractive

All the other factors that have always been there that make people want to sell are still there.

For most it does not matter as they are going to keep it until the term runs out, so....it just doesn't matter in the long run if you are not planning on selling.. However, it might turn out nice for those that want to buy?

Once AKL gets going more people are going to want to go to other resorts (BCV for example) and they will find it even harder to get ressies at 7 month window which in turn will eliminate the current BCV contracts and once again we will be discussing how expensive 125/pt is and how cheap it was back in 2007 at $100.

 

[BrianD]

I know that a lot of people on this board are very sensitive to this kind of discussion because they want to know that their investment in what they bought is of high value. Even if they have no intention of ever selling, it's just a good feeling to know that what they spent $$$ on is selling at a good price. As a hopefully soon to be DVC owner, I know I would be feeling that way.

That being said, for whatever reason, there are more resales out there, particularly with BCV. I also understand that we are all only looking at a small sampling of the actual number of resales out there, but the increases are consistent across multiple resale sites. So, it can be deduced that this may indeed represent the overall market. Look at how polls are taken, some of these national polls we see on the news include only 1200 people being surveyed.

I agree with most all of the theories on here as to why this is, and it could be a combination of the two. The AKV theory seems very possible just because of the timing of when selling started and when these resales started increasing. But who knows?

For me personally, I have to make a decision on whether I want to go after a BCV resale (which is our current favorite DVC resort), or buy AKV or the "nothing-has-been-announced-it's-strictly-rumor", yeah right, CRV, direct from Disney whenever it comes around.

 

[TenThousandVolts]

Until Disney starts running "add more points at home" promotions, I won't think that Disney believes there to be a supply problem, and with ROFR, theirs is the only opinion that matters.

I agree with all of the logic about DVC keeping ROFR high being in their best financial interest and to keep new sales at their table vs. having those buyers turning to the resale market. regarding the above comment: I was just reading another thread (bad OKW review on tripadvisor) and some are stating that DVC is pushing add-ons via a phone call or voice mail soon after you check-in. Not a full blown promotion, more like a small push- but I am guessing this new practice suggests they have some inventory to unload.

 

[jarestel]

That being said, for whatever reason, there are more resales out there, particularly with BCV.

There are more owners now than ever before as well. There have always been BCV resales on the market and there always will because people tend to sell for many reasons. I don't recall anyone ever posting here that they just couldn't get a resale at BCV because of any shortage of inventory. I wouldn't read too much into the number of resales currently listed. The absolute number will be higher since there are more owners now, but I'd be surprised if the percentage of resales was any different.

 

[crisi]

I agree with all of the logic about DVC keeping ROFR high being in their best financial interest and to keep new sales at their table vs. having those buyers turning to the resale market. regarding the above comment: I was just reading another thread (bad OKW review on tripadvisor) and some are stating that DVC is pushing add-ons via a phone call or voice mail soon after you check-in. Not a full blown promotion, more like a small push- but I am guessing this new practice suggests they have some inventory to unload.

I've always gotten that phonecall. I've gotten it on my voicemail on every DVC trip over the past five years and on DCL. It isn't new. Disney has always pushed add-ons - but they've seldom PROMOTED add ons at the "sold out" resorts.