Direction of resale prices

[Donald Duck888]

I was just reading a thread on here about whether to go through with a purchase of a DVC contract and it got me thinking of a question I have been thinking about for a while now.

While I fully understand that a timeshare should not be viewed as an "investment" in the true sense of the word I was wondering where people think resale prices on DVC may be heading in the future. I ask this because I was thinking that even though it is not an investment that will appreciate in value it may be something that may be a solid financial decision if one is planning and able to vacation at Disney for the forseeable future.

I say this in that if (a big if right now I know) things turn around in the economy wont the price of resale, direct and rental go up? So wouldn't that make buying now say at $70 or less per point a good vacation investment if prices were to rise in the future?

I guess I look at it as like buying a pre buy heating oil contract you can lock in your price for the winter by doing that or roll the dice with buying as you go. Most years I have done well (saved money) by pre buying but a couple of years I have not.

I am curious of others opinins on this thought processs. Logical? Flawed? Any thoughts will be appreciated. Also any thoughts on where the prices may be heading would be appreciated as well. Thanks.

 

[Anthony1971]

DVC is a prepaid vacation and being that whatever price you buy at you will save a fair amount of money over renting a similiar the room direct from Disney.

You post goes back to it being an investment then to a prepaid vacation.... if you look at as a strictly prepaid and use it as it is ment to be used you will save money. If you are trying to find if it is a good time to buy or not then you are saying it is an investment.... Buy it is a prepaid vacation and you are fine... buy it at 30.00 (if it ever goes there) a point because it was cheap or a good investment you may be in for a big disapointment...
would you buy a house in California when you live, work and your child(s) go to school in NY because it was a great deal or good investment??
sorry one last time it is a prepaid vacation that is it use it for such and have an understanding of this and you are fine.

 

[chalee94]

I say this in that if (a big if right now I know) things turn around in the economy wont the price of resale, direct and rental go up? So wouldn't that make buying now say at $70 or less per point a good vacation investment if prices were to rise in the future?

at some point in the future - in 2042 for me - my DVC contract will be worth zero.

as DVC has shown already, they are willing to cut perks that transfer to resale buyers...and that can drive prices down as it pushes down demand from potential buyers.

but in theory, yes, if the economy bounces back then DVC prices may rise as more buyers want in. but i wouldn't count on this being the case for a while...

 

[staceymay00]

I don't see resale prices going up except maybe at property like VGC where ROFR is being exercised and there seems to be a lot of demand for it...just my guess.

I ask this because I was thinking that even though it is not an investment that will appreciate in value it may be something that may be a solid financial decision if one is planning and able to vacation at Disney for the forseeable future.

We bought resale about 18 months ago and just today I was reminded what a good decision it was for us. I was checking AP rates for a night or two before our DVC stay begins. I decided to check OKW for the five nights we have booked on points at Thanksgiving. A one bedroom villa for the five nights is $2063 with three of the five nights discounted 40% off rack rate. A 2BR was not available but would be about $900 more using the same discount. We are using 176 points for a 2BR villa. Our points cost us about $7 each (MFs this year plus initial buy in - I ignore opportunity cost), so our cost for the 2BR villa is around $7x176 points, $1232. That is line with what we have been willing to pay per night for a deluxe resort room at a nice discount, but we are getting a 2BR villa instead of 400sf. We plan to visit WDW at least every other year for quite a while, we don't mind staying off site but usually prefer on site and now that our kids are older we really prefer the extra space of a villa, so DVC via resale made sense for us.

 

[Tropigal]

We just closed on our purchase of a resale DVC at Saratoga yesterday! We got a great deal! Yes we don't get the perks from DVC that are mainly for trips outside of US and some other things but we wouldn't have used them anyhow!

DH picked to do resale over straight through DVC cause of the cost we got our points at! It will totally help us! And we didn't finance anything. Now we just are waiting for our papers and I can log in and reserve!

 

[JimMIA]

I don't see resale prices going up, no matter what happens to the economy.

There are two things that support DVC resale prices. One is the intrinsic value of ownership at WDW (and WDW only, IMHO). No other timeshare can offer actual onsite accommodations at WDW. As long as there is a perceived value to staying onsite, that advantage will be reflected in demand for WDW DVC resorts. For that reason, I don't think you'll ever see DVC WDW resort contracts selling for $1 on eBay like many other timeshares do.

The other support is ROFR, to the degree that Disney chooses to use it. After a year or so of little or no ROFR activity, Disney has once again begun ROFRing -- but very rarely. In the time they withdrew ROFR, most onsite resort resale prices dropped 30-50%.

If Disney continues to ROFR only at VCG and BCV, I think you will continue to see prices decline until they reach some kind of equilibrium point reflective of the perceived value of onsite ownership. I suspect that point will be well south of current levels for most resorts.

 

[Brian Noble]

they are willing to cut perks that transfer to resale buyers...and that can drive prices down as it pushes down demand from potential buyers.

The other support is ROFR, to the degree that Disney chooses to use it. After a year or so of little or no ROFR activity, Disney has once again begun ROFRing -- but very rarely. In the time they withdrew ROFR, most onsite resort resale prices dropped 30-50%.

It's my opinion that both of these are "effects" of dropping resale values, not "causes". In both cases, resale prices had already been dropping before the policy change came about.

More generally, I expect DVC resale prices to continue to go down. With any timeshare system, demand is manufactured, not organic. True, there is some "natural" demand, and that supports the resale market in the early years. But, as the system grows, resale prices *must* go down unless the "natural" demand grows along with it. And eventually, system growth outpaces demand.

As evidence for this, consider the fact that Disney reports occupancy *and* room rates in their cash resorts have started to recover from the recession. But, at the same time, resale prices have done nothing but continue to fall. If "improving demand" for WDW travel were to indicate a recovery of the resale market, we should see prices stabilizing and rising slightly. But, as far as I can tell, we don't.

 

[Donald Duck888]

Thanks to all for your responses, they have all been very helpful and informative.

It seems from the responses so far that many people feel prices will continue to decline until if or when Disney decides to ROFR in many more cases.

That is very interesting as I am hoping to "time" things so as to buy at the lowest price per point and had actually been thinking there was not alot of downward room left on points.

We go to Disney alot (usually at least once a year), although mostly off site as I own a Marriott timeshare that we use to trade into the area alot.

I was thinking of buying a small resale (around 100pts) at either BW or BC and using it to go every 3 years while using the marriott for other years. That way I could keep MF's down (although I have to admit they pale in comparison to my OP Marriott MF's) I guess thats what I get for buying on the coast of FL where Hurricanes can visit.

From the sounds of things however it sounds like it might be to my benefit to wait at least a bit more (while keeping my vacation schedule in mind of course) and see where things go. Although probably don't want to wait too long as Disney is already ROFRing one of the 2 places I am interested in.


Any other thoughts?

 

[fatboylojo]

DH picked to do resale over straight through DVC cause of the cost we got our points at! It will totally help us! And we didn't finance anything. Now we just are waiting for our papers and I can log in and reserve![/QUOTE]

Do tell the details of the purchase......
if thats not to forward..... I am on the fence.....on purchasing..

Thanks
Joe

 

[goin3d]

Thanks to all for your responses, they have all been very helpful and informative.

It seems from the responses so far that many people feel prices will continue to decline until if or when Disney decides to ROFR in many more cases.

That is very interesting as I am hoping to "time" things so as to buy at the lowest price per point and had actually been thinking there was not alot of downward room left on points.

We go to Disney alot (usually at least once a year), although mostly off site as I own a Marriott timeshare that we use to trade into the area alot.

I was thinking of buying a small resale (around 100pts) at either BW or BC and using it to go every 3 years while using the marriott for other years. That way I could keep MF's down (although I have to admit they pale in comparison to my OP Marriott MF's) I guess thats what I get for buying on the coast of FL where Hurricanes can visit.

From the sounds of things however it sounds like it might be to my benefit to wait at least a bit more (while keeping my vacation schedule in mind of course) and see where things go. Although probably don't want to wait too long as Disney is already ROFRing one of the 2 places I am interested in.


Any other thoughts?

Also bear in mind while waiting for that absolute lowest price to purchase the total time you would own dvc points is decreasing, which in turn decreases the amount you would potentially save in using them. IMO that is not worth a a few dollars a point, but your mileage may vary.

 

[fatboylojo]

DH picked to do resale over straight through DVC cause of the cost we got our points at! It will totally help us! And we didn't finance anything. Now we just are waiting for our papers and I can log in and reserve![/QUOTE]

Do tell the details of the purchase......
if thats not to forward..... I am on the fence.....on purchasing..

Thanks
Joe

 

[Granny]

That is very interesting as I am hoping to "time" things so as to buy at the lowest price per point and had actually been thinking there was not alot of downward room left on points.

There is a lot of downward room left on points since every year that passes is a year less of use left on the contract. To make the point, what would you pay for resale contract if there were only 10 years left of usage? 5 years?

As far as timing the DVC resale market, it's like trying to time the stock market. You can get lucky, or....

 

[Sandisw]

Thanks to all for your responses, they have all been very helpful and informative.

It seems from the responses so far that many people feel prices will continue to decline until if or when Disney decides to ROFR in many more cases.

That is very interesting as I am hoping to "time" things so as to buy at the lowest price per point and had actually been thinking there was not alot of downward room left on points.

We go to Disney alot (usually at least once a year), although mostly off site as I own a Marriott timeshare that we use to trade into the area alot.

I was thinking of buying a small resale (around 100pts) at either BW or BC and using it to go every 3 years while using the marriott for other years. That way I could keep MF's down (although I have to admit they pale in comparison to my OP Marriott MF's) I guess thats what I get for buying on the coast of FL where Hurricanes can visit.

From the sounds of things however it sounds like it might be to my benefit to wait at least a bit more (while keeping my vacation schedule in mind of course) and see where things go. Although probably don't want to wait too long as Disney is already ROFRing one of the 2 places I am interested in.


Any other thoughts?

I think that one should simply decide if owning DVC will give you what you want and then decide at what price point you feel it makes it a good deal.

IMO, considering the resale value of contracts as part of your calculations could be dangerous. There are too many variables that can affect it that are out of the control of the owner.

When we were deciding, we put resale value at $0 and then decided how long did we need to own before it started to "save" us money over what we were paying for our yearly cash stays. We felt comfortable with the numbers and bought at BLT. We could have saved by buying at SSR but knew home resort was more important for our long term plans so went for the place we knew we wanted to be.

We are in the process of closing on our BWV contract (which we got at a great price) and feel comfortable that our future vacation costs in terms of MF's are worth what we will get for our trips to WDW.

I would not worry too much about getting in at rock bottom but rather decide what makes it a "value" for you and go from there.

Good luck!

 

[Jason@dvcstore]

If Disney continues to ROFR only at VCG and BCV, I think you will continue to see prices decline until they reach some kind of equilibrium point reflective of the perceived value of onsite ownership. I suspect that point will be well south of current levels for most resorts.

FYI: I was completely shocked that Disney bought an Old Key West contract back yesterday and another one today. I forget the details on the contracts as home now but will have to get the details out soon. Both contracts did expire 2042 so that surprised me as well.

Jason at The Timeshare Store, Inc.®

 

[Jason@dvcstore]

There is a lot of downward room left on points since every year that passes is a year less of use left on the contract. To make the point, what would you pay for resale contract if there were only 10 years left of usage? 5 years?

My guess is somehow Disney is going to figure out a way to get someone to pay $280 per point for a contract that expires 2042 in 2032.

Jason

 

[Tropigal]

Joe I don't know the details really about what we ended up paying but we got a good price per point! My DH handled all that and dealt with the timeshare store.

I was worried DVC would refuse it but the timeshare store never mentioned to us that they were concerned they would refuse. We bought from a couple that lives out of the U.S. too.

To the thread starter.....we also own 2 timeshares at Orange Lake, off site. We bought DVC mainly for us to get to Disneyland and Hawaii easier with Disney. Though we won't be doing this for a few years it will help us! We have little kids so we visit Disney frequently.

 

[jade1]

My guess is somehow Disney is going to figure out a way to get someone to pay $280 per point for a contract that expires 2042 in 2032.

Jason

 

[Brian Noble]

That is very interesting as I am hoping to "time" things so as to buy at the lowest price per point and had actually been thinking there was not alot of downward room left on points.

I don't see any reason to do this; you'll just be waiting forever. If DVC works for you at current prices, then it would make sense to buy now. True, it will be less expensive later, but that doesn't change whether or not it is good for you today.

 

[htmlkid]

I don't see any reason to do this; you'll just be waiting forever. If DVC works for you at current prices, then it would make sense to buy now. True, it will be less expensive later, but that doesn't change whether or not it is good for you today.

I have to agree with Brian, as long as your comfortable with a certain price range, why wait to purchase!!!! Every day you wait, is another day your children get older, another day the resort use comes closer to expiring, and another day you didn't experience the family magic of Disney.

 

[sweetdana]

I think in the next few yrs, Disney will start ROFR again. I think they are letting a bunch go, and then will stabilize the market.


I agree with other poster, but with a hope it is worth something when/if you sell, but buy with the goal in mind for personal use one. Keeping end value near 1 dollar.