Concerned about the Future of the DVC resale

[Katie L]

I spoke with my guide yesterday and asked about this new 100-point minimum. He essentially said that DVD does all the work, but then resale brokers get the business, and DVD is trying to recapture as much of that as possible.... that response puzzled me a bit, and I'm still not sure what to make of it.

This blows.my.mind. It would be like my car dealership that I bought my new car from being angry when I sold the car to someone else down the line but didn't give them any money from THAT sale. It's like a complete fundamental misunderstanding of economics and markets. If DVC executives really think this way.... well, it seems they do. It's sad.

 

[Brianstl]

FWIW - I had a kiosk DVC guide at DCA tell me that this was already the case, only she said 7 months, and this was for all resale contracts. Now, I understand this info is about as good as if I had talked to the guy at the churro cart, but I think you'd see a fire sale with people getting out of DVC if this ever turned out to be true.

I don’t think a change like that would stand up in court.

 

[ELMC]

I will fully admit I just recently added a resale contract to me to my desired point because I believe they could continue to put in further resale restrictions.

Understand though - Disney's ideal world is high resale prices with significantly different benefits. I think (and time will only tell on this one) that they misjudged the resale restrictions on Riviera, because I suspect the resale price will land much lower than they want it to be. I think they were hoping that most direct buyers wouldn't be concerned with this - so they'd keep buying, and most buyers or resale would like the resort enough to keep the price up. Not sure either of these ideas are going to work out.

One thing that people didn't grasp for what it was was Disney raising all the old resort DIRECT prices last year, putting some high demand resorts up to $225-240 a point. Even I missed it at the time until the effect took place. They did it in order to drive resale prices UP.

back to the topic at hand - what else Disney could do. I am terrified (and understand I have ZERO insider knowledge on this) that the next shot for resale restrictions could be to make it so resale buyers can't book at 11 months at their home resort - only at say 10 months. This is my view would turn resale (and in turn DVC in general) into a complete non-starter for me - but I no longer am certain that Disney won't do it. So I bought another contract, and now I know I am safely at a point quantity that is more than enough to do what I want every year and then some.

Interesting points that lead to this question: you purchased more points so that you are comfortable that your position matches your vacation needs, but are you concerned at all that if the dvc resale market does take a dive due to more restrictions that your ability to get out whole could be severely impacted? I ask because this is something I struggle with daily. I own 325 BWV and 200 BLT. My average cost of entry across all points is about $70pp. If I were to sell today, I could get a lot more but not get any use out of DVC. If I hold and the price tanks for whatever reason, I've missed out on an opportunity to capture that extra value.

Put another way, BWV right now is selling for about $125 per point. I would not pay that much. So if that's the case and I think the price is too high, shouldn't I be selling at that price? Or is the happy medium to be neither a buyer nor a seller, simply an owner?

 

[skippytx]

I don’t think a change like that would stand up in court.

It wouldn't even make it to court. The core timeshare documents have the Home Resort Priority Period baked into them, and they can't really modify those. They can change the Home Resort Priority Period down to as little as 1 month, but they can't get rid of it based on if the points were purchased resale or not.

 

[ray3127]

This blows.my.mind. It would be like my car dealership that I bought my new car from being angry when I sold the car to someone else down the line but didn't give them any money from THAT sale. It's like a complete fundamental misunderstanding of economics and markets. If DVC executives really think this way.... well, it seems they do. It's sad.

Thought of this exact thing and almost posted using a similar car example! Really backwards thinking on markets, and yes, it is sad if they think this way.

 

[DougEMG]

Put another way, BWV right now is selling for about $125 per point. I would not pay that much. So if that's the case and I think the price is too high, shouldn't I be selling at that price? Or is the happy medium to be neither a buyer nor a seller, simply an owner?

I am suffering from the exact same problem. There is no way I would buy at current prices combined with DVC's current management direction, so should I be selling? Theoretically I should be selling, but I find myself reluctant to do so. Am I being foolish and simply hoping that everything turns out okay?

 

[DougEMG]

It wouldn't even make it to court. The core timeshare documents have the Home Resort Priority Period baked into them, and they can't really modify those. They can change the Home Resort Priority Period down to as little as 1 month, but they can't get rid of it based on if the points were purchased resale or not.

But they could make such a change to future resorts and probably could make it at RIV if they wanted to.

 

[kniquy]

I am wondering if anyone else has these concerns or what everyone thinks about the future of resale. Thanks

I think DVC is doing its best to make direct purchases more enticing than resale - keep imposing restrictions and it might push some to spend the extra money for the "perks". Will they kill the resale market completely -- I don't think so. What you are buying when you buy a DVC contract whether direct or resale is that you are prepaying your room cost. It does work out to be a better deal vs booking directly through WDW. So DVD offers perks to make you want to spend more money. BUT again those perks and disappear or change.

DVC could not kill the resale market because they would never want to assume ownership of all those points/contracts & MF. If they were able to buy up all the resale contracts they would -- that would kill the resale market, but with buying back contracts comes with them not having someone to pay the MF's so they will continue to be picky with what they buy back. There is a cycle of DVC -- people buy direct and then have to sell for some reason, DVC does not typically buy back contracts directly which leads to the resale market.

Even with all the restrictions which have been imposed since 2011, resale prices continue to rise. I happened to buy my first resale at the end of 2015, so i am grandfathered in to most perks. I bought AK for $80pp, but with continued restrictions AK resales are now upwards of $110-115 pp. So all there efforts have not affected the resale value. You are buying the room, that is it. So why not go resale and save yourself money.

This recent change might be more of a push to up their direct sales with forcing someone to buy 25 more points than they really wanted to. More sales for them, but again once someone has that blue card they will likely still look to resale to add on more points.

 

[Lumpy1106]

So here's an interesting question - might warrant it's own thread. If the current direct benefits do not entice you to buy direct over resale, what would be? For me, I think a couple of extra fastpasses per person per night staying on direct points would be very tempting.
How about;
Free unlimited Minnie Vans?
Fully-stocked kitchens?
Daily maid service?
Direct DVC exclusive EMH?
Free Disney Plus for when you get home?

 

[BrerRabbit1119]

I am suffering from the exact same problem. There is no way I would buy at current prices combined with DVC's current management direction, so should I be selling? Theoretically I should be selling, but I find myself reluctant to do so. Am I being foolish and simply hoping that everything turns out okay?

I think if you are still enjoying your DVC membership and still saving on booking deluxe resorts, then there is no reason to worry about it. It's dangerous to start thinking about a timeshares like the stock market. Although DVC has been unique in that the value has gone up over time, typically timeshares decrease in value.

It really is much more like buying a car as some others have mentioned. The minute you buy a traditional timeshare the value drops, just like the value of a car drops the minute you drive it off the lot. But you enjoy it for a few years, hopefully run it into the ground, and when its time is done you maybe buy a new one. DVC has been unique in that the price has increased because of the added flexibility and benefits that it has over other timeshares, but the DVC prices will eventually begin declining as they approach their expiration years, as well.

In short, if you bought low don't worry about selling high. Just enjoy the ride (and the vacations) while you can!

 

[DougEMG]

I think if you are still enjoying your DVC membership and still saving on booking deluxe resorts, then there is no reason to worry about it. It's dangerous to start thinking about a timeshares like the stock market. Although DVC has been unique in that the value has gone up over time, typically timeshares decrease in value.

It really is much more like buying a car as some others have mentioned. The minute you buy a traditional timeshare the value drops, just like the value of a car drops the minute you drive it off the lot. But you enjoy it for a few years, hopefully run it into the ground, and when its time is done you maybe buy a new one. DVC has been unique in that the price has increased because of the added flexibility and benefits that it has over other timeshares, but the DVC prices will eventually begin declining as they approach their expiration years, as well.

In short, if you bought low don't worry about selling high. Just enjoy the ride (and the vacations) while you can!

The situation is kind of similar to a car, in that do I run the car into the ground and have no value left in it or do I sell it early while it still has value and get/do something else.

Oddly enough I just replaced 2 of my cars within the last 2 weeks. In both cases I sold/traded-in my previous cars because they still had good resale value.

 

[DougEMG]

So here's an interesting question - might warrant it's own thread. If the current direct benefits do not entice you to buy direct over resale, what would be? For me, I think a couple of extra fastpasses per person per night staying on direct points would be very tempting.
How about;
Free unlimited Minnie Vans?
Fully-stocked kitchens?
Daily maid service?
Direct DVC exclusive EMH?
Free Disney Plus for when you get home?

Free FP+

 

[ELMC]

There are a lot of factors that impact the price of DVC resales, but I think the biggest is the price of direct points. As long as prices continue to skyrocket as they have been, I think there will likely be those looking to save money via resale - regardless of how many perks they miss out on.

 

[Brianstl]

Interesting points that lead to this question: you purchased more points so that you are comfortable that your position matches your vacation needs, but are you concerned at all that if the dvc resale market does take a dive due to more restrictions that your ability to get out whole could be severely

Put another way, BWV right now is selling for about $125 per point. I would not pay that much. So if that's the case and I think the price is too high, shouldn't I be selling at that price? Or is the happy medium to be neither a buyer nor a seller, simply an owner?

 

[ELMC]

So here's an interesting question - might warrant it's own thread. If the current direct benefits do not entice you to buy direct over resale, what would be? For me, I think a couple of extra fastpasses per person per night staying on direct points would be very tempting.
How about;
Free unlimited Minnie Vans?
Fully-stocked kitchens?
Daily maid service?
Direct DVC exclusive EMH?
Free Disney Plus for when you get home?

All great ideas except that with each one of them all I can see is a huge added expense that will make dues skyrocket even more. No thanks to all of them, except maybe the extra fastpasses. But even those cost money: my understanding is that the parks division bills DVC internally for each FP they give away. But to your point, it's clear that Disney has yet to figure out what the magic bullet is; it will be interesting watching what happens as they try to figure it out.

 

[Brianstl]

And BWV still makes some financial sense on the resale market compared to Boardwalk discount room prices, but it is really close. BCV really doesn’t make sense anymore at current resale prices compared to the discount rates you can get Yacht Club and Beach Club.

If you are looking at it from just a financial perspective you should sell BWV and especially BCV now and buy something like AKV where prices can be more than 25% cheaper and you have 15 more years on the contract. Financially it is only a matter of time before people realize the prices on those two resorts are out of line when it comes to how many years are left on the contract and the there will be a price correction.

If you like BWV, you should keep it. If I owned BWV or BCV, I would keep them. They are my two favorite resorts based on location. That said, I would never pay the current resale price for either, much less entertain buying them direct.

 

[AdamsMum]

One thing that people didn't grasp for what it was was Disney raising all the old resort DIRECT prices last year, putting some high demand resorts up to $225-240 a point. Even I missed it at the time until the effect took place. They did it in order to drive resale prices UP.

See, I don't think they did this to drive resale prices up. I think they did it in a misguided effort to deter current owners from adding on at the L14, and direct them towards Riviera. They did this knowing that anyone who has good knowledge of their product would be leery of the restriction on resale at RIV, but hoping they could still entice them with a $188 price point. I think they miscalculated the outcome of this strategy, but I don't know how RIV is selling. I think it's too early to tell.

 

[ELMC]

See, I don't think they did this to drive resale prices up. I think they did it in a misguided effort to deter current owners from adding on at the L14, and direct them towards Riviera. They did this knowing that anyone who has good knowledge of their product would be leery of the restriction on resale at RIV, but hoping they could still entice them with a $188 price point. I think they miscalculated the outcome of this strategy, but I don't know how RIV is selling. I think it's too early to tell.

It could possibly be a little of both. I think it was easy to see that raising the prices of legacy resorts higher would likely pull up prices of resales accordingly. That benefits Disney as the comparison point in the buying decision of direct vs. resale is a lot closer. The choice was no longer between buying Riviera for $188 a point and some $90 resale contract, it was now between buying direct for $188 or resale for $140 (give or take depending on the resort). It is a lot easier for their salespeople to steer people towards direct over resale if the savings are not as massive as they once were.

 

[Madame]

See, I don't think they did this to drive resale prices up. I think they did it in a misguided effort to deter current owners from adding on at the L14, and direct them towards Riviera. They did this knowing that anyone who has good knowledge of their product would be leery of the restriction on resale at RIV, but hoping they could still entice them with a $188 price point. I think they miscalculated the outcome of this strategy, but I don't know how RIV is selling. I think it's too early to tell.

All it did was drive more direct buyers to SSR and OKW. I’ve seen a lot of direct 75 point buys there for blue card status on other social media platforms. I don’t think that was the intent, but

 

[katandmouse]

And BWV still makes some financial sense on the resale market compared to Boardwalk discount room prices, but it is really close. BCV really doesn’t make sense anymore at current resale prices compared to the discount rates you can get Yacht Club and Beach Club.

If you are looking at it from just a financial perspective you should sell BWV and especially BCV now and buy something like AKV where prices can be more than 25% cheaper and you have 15 more years on the contract. Financially it is only a matter of time before people realize the prices on those two resorts are out of line when it comes to how many years are left on the contract and the there will be a price correction.

If you like BWV, you should keep it. If I owned BWV or BCV, I would keep them. They are my two favorite resorts based on location. That said, I would never pay the current resale price for either, much less entertain buying them direct.

I basically agree with this... unless you are like us, wanting DVC specifically for the kitchens and larger villas, and specifically wanting to stay at BCV or BWV. In our case we were comparing to Disney’s 1 and 2 br villa pricing and whether they were available, so it made sense to us to buy our resale BCV contract for our plans, but like you we could not pay direct price for it. And I recognize our situation is pretty specific and the minority.

See, I don't think they did this to drive resale prices up. I think they did it in a misguided effort to deter current owners from adding on at the L14, and direct them towards Riviera. They did this knowing that anyone who has good knowledge of their product would be leery of the restriction on resale at RIV, but hoping they could still entice them with a $188 price point. I think they miscalculated the outcome of this strategy, but I don't know how RIV is selling. I think it's too early to tell.

I agree, and then it also had the side effect of bumping up resale prices. With the direct price increases, it really doesn’t make sense to buy sold out resorts direct anymore, although I think RIV with Membership Benefits could offer a deal compared to some sold out resorts resale (ahem, BCV) - except for the changes to RIV’s contract and the resale restriction.

In our case, we normally would not consider a timeshare. We felt comfortable with DVC because it has an end date, there’s some flexibility, and from all accounts it seemed like Disney was honest with any changes and did its best to do right by their customers and owners. If BCV direct was still $165 or even $185 we would’ve likely found value in buying direct and the Member Benefits. Or conversely, with prices what they are, if RIV had no Restrictions and Limitations in its contract, we would’ve given more thought to buying RIV instead of going for BCV resale. When we were in the research/buying process, RIV and its resale restrictions were just announced. That to us screamed regular old timeshare so we did not even look twice at it. Now after reading the POS and everything, I’m more worried that this change will wind up harming that flexibility and trust in DVC for everyone, not just resale.