Future Recession: Which DVC resale Resorts drop fastest

[Mackenzie Click-Mickelson]

Even the "Great Recession" felt comparatively minor compared to what I've read of the 1920s

Yes but most of that has to be viewed from the lens of the time period the recession actually happened. It's no use comparing to close to 100 years prior, the entire way of living is completely different. It's also no use comparing to even the 80's strictly speaking about saying what I quoted above where a certain recession felt minor compared to X.

I think the effect vastly depends on what age group you're in when it hit and just what the recession was about. My mother, in-laws, etc were not really touched by the Great Recession largely because they had already had decades of homeownership, were well established in careers, etc. Certainly people were pushed out of their jobs who were older and had to start over again those were the people I was competing against trying to get a job at 22 but they were also protected to a degree by years worth of wealth building and don't read wealth to actually mean wealth just the concept of time you had to build your assets.

Those who were greatly impacted, outside of those who lost their home by in large because they truly couldn't have ever really afforded the mortgage, were Millennials just coming out of college into the job market. Those aren't the target market for DVC anyhow. Even Elder Millennials were slightly less impacted by those just coming out of college.

Conversely during the pandemic my mom was let go of her company she had worked for just a few months shy of 40 years because she was at least 55 in age and had worked for at least 5 years. Now that impacted her because the very early stages affected the 401K and then she lost her job months later. However, my husband and I became one of those who positively impacted by it due to a job change as the engineering market here is competitive and there was fortunate ability to change jobs with much better pay.

DVC, even if you consider the debt people may take on to get the contract, are still largely of a different category of people that may not be representative of someone else when discussing the severity of a given recession. Vacations tend to drop off first but with a timeshare type program it's also not the same vacation that others are.

 

[Mackenzie Click-Mickelson]

Hawaii flights are cheaper than park tickets...

at least from the west coast.

I wonder where in terms of continental U.S. the owners of DVC come from but not only that where they come from when they use their points most often.

If the primary amount of owners or points users come from the west coast (when speaking about continental U.S.) that probably helps but if that's not the case then the airfare equation can greatly matter.

In the end though I think a big factor is how many points Aulani costs. My DISer friend who lives in my area opted to not do their normal 2 per year WDW trip in order to go to Aulani due to the points costs and room type they wanted, they own multiple contracts with a decent amount of points. The other person who has DVC didn't fly to Aulani from the west coast although that's where they grew up, they flew from where we are in the middle of the country and from FL to get to Hawaii (when they lived in each respective place). They never went to Aulani when they lived on the west coast.

 

[Maria_Ohana]

How do you think they'll drop? Why would one drop over another?

I'm going with OKW since it has 2042 expiration. Although I love the resort due to the size of the rooms. Next will be HHI and VB, just because of the dues.

 

[SugarSweetLee]

In a recession those park tickets won’t drop in price but the airfare will.

Are you sure about that? Disney has already proven they can move the needle when sales soften by offering various incentives like different cheaper ticket packages, dining offers, gift cards with purchase, etc. I'd expect more of the same if trip bookings really take a downturn.

 

[thanxfornoticin]

I'm going with OKW since it has 2042 expiration. Although I love the resort due to the size of the rooms. Next will be HHI and VB, just because of the dues.

It's a mixed bag with OKW, since a decent percentage of those contracts are 2057. In reality, OKW, HHI, and VB have already been coming down in price over the past few years - probably due to their location and the 2042 expiration. Any economic downturns now will likely impact these resorts a little, but probably not that much. They're already getting pretty low on the resale market.

Here's hoping we don't actually need to find out what will happen - hoping at some point soon, the economy will stabilize and grow instead. I'm not optimistic right now, but always hopeful!

 

[Wedgeout]

Are you sure about that? Disney has already proven they can move the needle when sales soften by offering various incentives like different cheaper ticket packages, dining offers, gift cards with purchase, etc. I'd expect more of the same if trip bookings really take a downturn.

Sure about it? Heck No. They would most likely have to pivot but won’t want to. They could pull a fast one and raise everything. There will always be recession proof individuals. Salaries don’t change. Layoffs would be a bad look.

 

[Sandisw]

It's a hard question to answer. I think the better question is which resorts would people be most likely to be upside down on any financing - that is, they owe more than they could sell their DVC for, thus, would likely just stop paying their loans and dues rather than trying to sell it off. Without a doubt, that is probably RIV both because it is one of the more recent actively selling resorts and because of the steep drive-off-the-lot depreciation.

After RIV, well, probably the resorts that have been most recently in active sales - PVB/AUL/VDH/CFW are all in active sales, so any purchasers there who financed their entire purchase there could be underwater. Before that, VGF and CCV were the two most recent actively selling resorts. But, there have been flash sales for SSR/OKW/SSR/AKV in recent years where people may have financed a direct points purchase (and had similar depreciation hits as RIV), but one would think the number of owners at those resorts who are underwater is small in comparison to RIV.

What would be interesting is how many financed resale in 2022 when the prices were a lot higher than today.

SSR was going in the $120s for $130s. VGF up in the $170s to $180s.

Heck, I sold a BLT in 2021 for $189 on the resale market.

So, while direct buyers would be the bulk of potentially underwater on financing, there may be resale buyers too.