Future Recession: Which DVC resale Resorts drop fastest

[Mirabell Rose]

We heard from the condo meetings something like 20% of DVC points are currently being exchanged for something non DVC like cruises. (Do I have the 20% number right?). That’s a lot of points being used for a pretty low conversion rate. It leads me
to believe that there will be serious consideration for those who are converting that many points to sell off of times get tight. It may be the push they need to sell versus poor conversions. And I think it may be the Gen Xers who do a fair amount of dumping. They have no where near the defined benefit pensions the boomers had. Mostly 401k’s. You never saw the pension funds drop in a defined benefit pension, but that 401k statement comes quarterly. This is also a lot of people who have grown kids and realize that grandkids are more of a maybe these days than a for sure. So holding onto Disney stays may not be needed if there are no grandkids.

 

[airjay75]

We heard from the condo meetings something like 20% of DVC points are currently being exchanged for something non DVC like cruises. (Do I have the 20% number right?). That’s a lot of points being used for a pretty low conversion rate. It leads me
to believe that there will be serious consideration for those who are converting that many points to sell off of times get tight. It may be the push they need to sell versus poor conversions. And I think it may be the Gen Xers who do a fair amount of dumping. They have no where near the defined benefit pensions the boomers had. Mostly 401k’s. You never saw the pension funds drop in a defined benefit pension, but that 401k statement comes quarterly. This is also a lot of people who have grown kids and realize that grandkids are more of a maybe these days than a for sure. So holding onto Disney stays may not be needed if there are no grandkids.

I think that's a fair point, but I also think the people exchanging their DVC points for cruises aren't exactly focused on getting the most value for their points. If they aren't in financial difficulty (not just a drop in their 401k but facing serious pressure on monthly expenses), maybe they just say, well, we may not be going to WDW but at least we can keep cruising with our points!. If the resale value looks low, maybe they just hold on and wait for better times. But, if they are facing true financial pressure, then maybe it's a different story.

 

[Mirabell Rose]

I think that's a fair point, but I also think the people exchanging their DVC points for cruises aren't exactly focused on getting the most value for their points. If they aren't in financial difficulty (not just a drop in their 401k but facing serious pressure on monthly expenses), maybe they just say, well, we may not be going to WDW but at least we can keep cruising with our points!. If the resale value looks low, maybe they just hold on and wait for better times. But, if they are facing true financial pressure, then maybe it's a different story.

The idea of financial pressure starts to exert itself on a lot of upper middle class folks when they hit late 50’s, early 60’s and are seriously looking at retirement scenarios awaiting them.

 

[Anthony1971]

DVC is real property and considered a Condo. An economic downturn will have minimal impact on DVC as the buyer in general is of higher means and has far greater tolerance to a market downturn, we saw this exact scenario in 2022 with an overall inflation rate of 8% and a 20% drop in the stock market.... even this had little to no effect on real estate. The market to watch is real estate if this market declines Condos always go first and far lower than a house. The last time this happened was in 2010 or about and it did last a number of years. There was plenty of stories of people on these boards buying during that time cheap and selling in the late teens and making large profits.

 

[mkatsy]

DVC is real property and considered a Condo. An economic downturn will have minimal impact on DVC as the buyer in general is of higher means and has far greater tolerance to a market downturn, we saw this exact scenario in 2022 with an overall inflation rate of 8% and a 20% drop in the stock market.... even this had little to no effect on real estate. The market to watch is real estate if this market declines Condos always go first and far lower than a house. The last time this happened was in 2010 or about and it did last a number of years. There was plenty of stories of people on these boards buying during that time cheap and selling in the late teens and making large profits.

the comptroller recorded 2921 deeds and 1726 mortgages for Disney Vacation Development LLC from 1/1/2026 to today … ~ 59% of direct buyers did not have the means or desire to pay cash for their purchase. I’m not sure that’s a reflection of above average financial discipline.

Edited to add: deeds registered from 1/1/25 - 3/25/25 were 3092 so year-over-year. Registrations (which naturally lag sales) are already down

 

[cruisehopeful]

the comptroller recorded 2921 deeds and 1726 mortgages for Disney Vacation Development LLC from 1/1/2026 to today … ~ 59% of direct buyers did not have the means or desire to pay cash for their purchase. I’m not sure that’s a reflection of above average financial discipline.

DVD seems to push financing.

 

[Cfabar1]

DVD seems to push financing.

They haven’t with me… They have mentioned it a little bit, but it felt to me like it was more like “if it is helpful to pay for this over time” as a way to persuade making a sale, rather than pushing/encouraging financing like a car dealership that emphasizes the monthly payment to the point you don’t even know what the underlying cost is…

 

[Mirabell Rose]

DVC is real property and considered a Condo. An economic downturn will have minimal impact on DVC as the buyer in general is of higher means and has far greater tolerance to a market downturn, we saw this exact scenario in 2022 with an overall inflation rate of 8% and a 20% drop in the stock market.... even this had little to no effect on real estate. The market to watch is real estate if this market declines Condos always go first and far lower than a house. The last time this happened was in 2010 or about and it did last a number of years. There was plenty of stories of people on these boards buying during that time cheap and selling in the late teens and making large profits.

A time share is not the same as a condo people purchase for year round housing. There is a substantial shortfall of housing units in this country which has inflated the cost of housing units overall. The recession that hit in 2009 was the worst downturn since the depression. Yes, high inflation hit in 2022, but we didn’t have a recession like we did in 2009z

 

[Mirabell Rose]

the comptroller recorded 2921 deeds and 1726 mortgages for Disney Vacation Development LLC from 1/1/2026 to today … ~ 59% of direct buyers did not have the means or desire to pay cash for their purchase. I’m not sure that’s a reflection of above average financial discipline.

Edited to add: deeds registered from 1/1/25 - 3/25/25 were 3092 so year-over-year. Registrations (which naturally lag sales) are already down

At the high rate of interest DVC charges. I would conclude the vast majority didn’t have the funds. I’m not convinced the ‘above average income borrowers’ that a lot are citing as the vast majority of DVC owners are not going to have a serious financial impact in a recession. Some industries are hit harder than others and those industries are hit all the way up the line. I remember many days of ‘corporate rightsizing’ that marched many high earners out the door. It now takes on average 18 months for the higher earners to find a new job. Many of them live it up with most of their earnings and don’t have 18 months of reserves.

 

[Cfabar1]

At the high rate of interest DVC charges. I would conclude the vast majority didn’t have the funds. I’m not convinced the ‘above average income borrowers’ that a lot are citing as the vast majority of DVC owners are not going to have a serious financial impact in a recession. Some industries are hit harder than others and those industries are hit all the way up the line. I remember many days of ‘corporate rightsizing’ that marched many high earners out the door. It now takes on average 18 months for the higher earners to find a new job. Many of them live it up with most of their earnings and don’t have 18 months of reserves.

You’re probably right about owners not having the funds… And the recent introduction of 15 year terms for DVC would seem to support that analysis as well.

I would be curious how many buyers keep the loan for the duration, and how many pay it off.

We did not finance/mortgage through DVC, but the idea that we could lock in today’s price, and get to enjoy the product over a period of time while we finished paying off the product made sense to me. Especially if you were waiting for say an end of year bonus, a tax refund, inheritance, etc.

Others might use the mortgage as a bridge loan, until their HELOC comes through, or they can get a balance transfer set up, etc. My personal view is a HELOC is not the best way to pay for a timeshare, but I know for a long time it was emphasized as the way to go.

I also know people that buy DVC points, pay their monthly amount for 5 or 10 years or whatever, and then add on as soon as the previous one was paid off. In their mind it is a monthly expense, no different to paying their dues monthly.

 

[haletiki]

Edited to add: deeds registered from 1/1/25 - 3/25/25 were 3092 so year-over-year. Registrations (which naturally lag sales) are already down

This is really interesting information actually. Which also makes me wonder what impact this is having on the resale market.

I'm new to paying attention to all of this but I dove in pretty deep when we decided to finally try and take a shot at DVC a few weeks ago and one thing I noticed was that the resale market was a lot busier and also a decent amount cheaper last year or even in 2024 than it is now. Sure there are fewer contracts up for sale now which also likely has an impact on pushing prices higher, but I also wonder if more people are pursuing resale vs direct this year which is making the market more competitive that way too.

 

[mkatsy]

This is really interesting information actually. Which also makes me wonder what impact this is having on the resale market.

I'm new to paying attention to all of this but I dove in pretty deep when we decided to finally try and take a shot at DVC a few weeks ago and one thing I noticed was that the resale market was a lot busier and also a decent amount cheaper last year or even in 2024 than it is now. Sure there are fewer contracts up for sale now which also likely has an impact on pushing prices higher, but I also wonder if more people are pursuing resale vs direct this year which is making the market more competitive that way too.

It is very interesting, later today I’m going to go “dumpster diving” into the direct sales mortgage defaults. I’d love to know how many people held their note less than 5 years before they ran into trouble. I’m also looking for cash buyers that were foreclosed on for past due maintenance fees. These folks had the funds for the initial purchase but weren’t able to maintain it long term. Lastly I’m looking for the Q1 ratio of defaults to new sales. That’s where I think the LLC could potentially serve a purpose for DVD. If the default rate is rising then they might need help clearing away the dead bodies. Like crows dragging the roadkill raccoons out of the street. kind of hard to keep selling shiny new raccoons when you can smell the dead ones.

 

[gvel]

It is very interesting, later today I’m going to go “dumpster diving” into the direct sales mortgage defaults. I’d love to know how many people held their note less than 5 years before they ran into trouble. I’m also looking for cash buyers that were foreclosed on for past due maintenance fees. These folks had the funds for the initial purchase but weren’t able to maintain it long term. Lastly I’m looking for the Q1 ratio of defaults to new sales. That’s where I think the LLC could potentially serve a purpose for DVD. If the default rate is rising then they might need help clearing away the dead bodies. Like crows dragging the roadkill raccoons out of the street. kind of hard to keep selling shiny new raccoons when you can smell the dead ones.

My guess is that the number of foreclosed cash buyers for dues will be very very very low. For this to happen it would require someone who:
1) Is dead and the estate was not aware of the DVC or accidently neglected it.
2) Has some sort of dementia and completely forgot about it.
3) Very lazy and or dumb/financially illiterate.
If all you owe is dues you can easily rent them out to at least breakeven... even with VB or HHI. Also, the contract on its own has some sort of imited value even for VB and HHI. So they could get a something out of it if they put minimal effort.