DVC Hold Value Better Than Any Other Timeshare?

[CDNmouse]

I have to admit that before we bought into DVC my impression of timeshares was not that good. I went to a timeshare presntation about 10 years ago and the agressive sales pitch really turned me off.

That changed when we bought our DVC We bought via the resale market and while we saved money DVC the price per point seems to go up almost every year. As Disney raises the price the resale price seems to go up a bit too.

I see all these other timeshares availeble on eBay for resale that seem to not held any of there value, I se listing that stated "orginally cost $10,000 from developer." and these are selling on eBay for $1 plus the standard closing cost.

Why has DVC prices remained solid while it appears most other timeshares hold no resale value?

I have considered buying one of these cheap timesshares off of eBay but wonder what is wrong with them.

Gary

 

[Chuck S]

Certainly most of the reason that DVC has retained its value so far is because of Disney's ROFR, which is in effect an artificial price support to protect the value of their product for their own purposes.

Also that people are willing to pay more for a DVC resale than other timeshares...without folks being willing to pay it and make the initial offer, ROFR wouldn't kick in, either.

 

[CDNmouse]

Certainly most of the reason that DVC has retained its value so far is because of Disney's ROFR, which is in effect an artificial price support to protect the value of their product for their own purposes.

Also that people are willing to pay more for a DVC resale than other timeshares...without folks being willing to pay it and make the initial offer, ROFR wouldn't kick in, either.

I wonder why more companies have not adopted the ROFR.

Looks like Marriott TS has but even their resales seem to be going for about 10% of the original value.

From what I have seen on eBay I can't figure out why anyone would purchase a TS from the developer.

Gary

 

[tomandrobin]

I wonder why more companies have not adopted the ROFR.

Looks like Marriott TS has but even their resales seem to be going for about 10% of the original value.

From what I have seen on eBay I can't figure out why anyone would purchase a TS from the developer.

Gary

Top resorts do retain most of thier value. But even the best weeks will lose 30% right after you sign the paper work.

Hera are several good reasons to buy from the developer:

• Its a destination that you plan on going to every year and is difficult to trade thru II, example is summer week in Mrytle Beach.

• To join a "club" system to take advantage of benifits that only developer purchases can give you.

• To buy an event week, example is Christmas week at a ski resort. For example if you want to go to an event week at a Westin timeshare, you have to own it. Event weeks even if traded into II, do not get deposited into II.

• To buy a fixed week at a resort to guarantee a time of year, at a place you want to visit. St John resort in USVI is a good example, all the weeks are fixed and the owners rarely deposit thier weeks.

There are more reasons, but these are just a few.

 

[chalee94]

i would say the uniqueness of location and value (relative to other on-site options.)

i could be mistaken but i tend to disagree with most posters, and think ROFR is a result, not a cause of resales holding their value. the market value is what it is...but in areas where there are market inefficiencies, disney uses ROFR to profit by taking the opportunity to buy low and resell the points themselves at a higher price. if demand dropped significantly and pushed down the "real" market price to where disney couldn't make a profit on resales/add-ons, i suspect disney would drop the ROFR as its purpose has never been to "prop up the resale prices" but to enable disney to make money on resale transactions.

DVC resorts outside of wdw have less of a location and value advantage, and are therefore priced lower...and disney is - from anecdotal reports - less willing to buy these back.

 

[ChelleinNC]

Disney has an image that is very important to uphold, therefore the upkeep & maintenace is better than many other timeshares. We looked at other timeshares before buying DVC and couldn't believe how much cheaper they were and at first thought DVC was overpriced. Upon further investigation, they looked a lot cheaper the places were very run down. Disney can't/won't allow that to happen to their properties. Not to say that all other timeshares let their properties fall apart, but I think the ones that take better care of the property maintain their prices better.

 

[jjnv]

I owned a few timeshares and sold a few. If you do you study beforehand, you should be ok. All my other timeshares are traders. I bought them for much lower price (under $3000 initially and <$300 maintenance fee per year). That strategy worked extremely well before our kids went to school. We visited very nice places and stayed at nice resorts for under $700/week. Now that our kids are older, it is much harder to trade into nice resort for summer time. But you can still manage. We went to Yellowstone this summer and stayed on our timeshare exchange at Big Sky.

What I really like my DVC points is the flexibility of the system. When I trade with RCI, I have to plan way ahead. I also pay about $100 a year to be RCI member, $169 if I remember right to trade a week. There is not much you can change after two days. Also if you want to have friends or family use the week (you cannot rent an exchanged week), you also have to pay to get guest certificate for about $50. The RCI point system works a little better. You can exchange less than a week with your points. But many resort will hit you with house keeping fee for a shorter exchange. We paid $70 for a 4 day exchange last Christmas. So all these fees adds up to the cost of your vacation.

Check out tug2.net for information on timeshares. Many people enjoy timeshares. You just have to learn before you get in. I think first thing you have to decide is if you want to buy a timeshare mostly to use or to trade.

 

[Dean]

I wonder why more companies have not adopted the ROFR.

Looks like Marriott TS has but even their resales seem to be going for about 10% of the original value.

From what I have seen on eBay I can't figure out why anyone would purchase a TS from the developer.

Gary

I would disagree that ROFR is the main reason DVC has held it's value. I think the main reason is that it's a more mainstream product and that it's Disney with the on property allure. Still even DVC loses money when you buy it. I also think that if you buy the right timeshares, they often go up over time, many more so than DVC does. There are a number of companies that have and use ROFR. DVC wasn't the first and won't be the last.

What ROFR does do it prevent those special deals where you find someone who's desperate or ill informed and buy below market value.

 

[Mtnman44]

I agree with Dean in disagreeing that ROFR is the primary cause behind the seeming apreciation of DVC value.

Overall, I doubt it has a huge effect. It certainly does take the "bargains" and "bargain hunters" and "negotiators" out of the mix. It no doubt has some influence but not total. However, Disney is still subject to the market. Their ROFR price still has to be below the market value since they can only buy those contracts if they know they can sell them for $X profit.

I think the main factor is probably, yes, we've all heard it before....location. DVC condos have built in increasing demand due to the WDW resort. Plus, they all have, to some degree, built in scarcity due to the limited number of places to stay "on-site" at WDW. Other resorts in the area, even the super nice ones, do not have the same amount of scarcity, so they have less demand or in other words, more competition.

I would disagree that ROFR is the main reason DVC has held it's value. I think the main reason is that it's a more mainstream product and that it's Disney with the on property allure. Still even DVC loses money when you buy it. I also think that if you buy the right timeshares, they often go up over time, many more so than DVC does. There are a number of companies that have and use ROFR. DVC wasn't the first and won't be the last.

What ROFR does do it prevent those special deals where you find someone who's desperate or ill informed and buy below market value.

 

[Dean]

It's also extemely unlikely DVC members that buy in today retail will experience the increase in value that those that bought in a few years ago have. For the 2042 resorts we're likely near the top and anyone planning to sell should consider doing so in the next few years. While there are likely other reasons as well, we've already seen some decrease in price over the last year or so.

 

[SanDeeKath]

I hope you are wrong. We just bought. We thought it was a bargain to be in the system for under $20,000. The costs we usually have for developer purchases with other companies (Starwood and Marriott) are over $35,000 for EY use. And much less flexibility. With Disney expanding to HI, CA and possibly the Caribbean, I hope they will diversify and their value will go up.

Kath

 

[Dean]

I hope you are wrong. We just bought. We thought it was a bargain to be in the system for under $20,000. The costs we usually have for developer purchases with other companies (Starwood and Marriott) are over $35,000 for EY use. And much less flexibility. With Disney expanding to HI, CA and possibly the Caribbean, I hope they will diversify and their value will go up.

Kath

It's a little hard to compare DVC to other companies as the flexibility of DVC is such a part of the value. If one truly wants to compare, for Marriott it'd be comparing to say a 2 BR lockoff, maybe at Grande Vista or Ocean Point. For DVC you'd have to compare to enough points for a 2 BR, maybe 350 or so. DVC fees would be almost double and purchage price similar if you bought retail but MUCH less for resale, likely under $10K for GV, somewhat higher for OP. What's better depends on how YOU'd use it. For full weeks and for trading or even for long weekends, Marriott would be lightyears ahead. If and only if you took FULL advantage of the flexibility AND lower points weekdays, DVC would be the better $$$ choice. Certainly some just want to stay on property and there is a real $$$ and an emotional $$$ component to that that varies with each family. Most Marriott's are also Fee simple, not such a big deal when there are 50 years to go but a much bigger deal when you're down to 30-35 years.

You can bank that the 2042 resorts are in the general area of their top price esp if you allow for inflation as well. They may cont to ease up as the retail price goes up but somewhere around 28-30 years out they will start to level out then decline slowly. Obviously there are factors such as the retail cost, demand for a given property, fees, resort size, # of points for a given contract and what does happen with possible extensions. Will buying in be a good deal in a few years, it will depend on how you use it just as it does now. But it will likely not be as good a deal as it is now which is not as good a deal as it was 5 or 10 years ago. Ultimately you'll have to look at each individual situaiton and decide. The person who plans to own to use for the remainder of the contact will be affected much differently than one who plans to sell. The problem is that many don't plan to sell and end up later needing or wanting to and they will also be at a disadvantage. You will hear many people say "but the cost of rooms at WDW resorts", IMO, this will have only modest effects on the ability to sell and the price in the waning years, certainly not nearly as much as some would like to think.