Future resale value on restricted resorts?

[Paul Stupin]

I've just enjoyed 8 pages of back and forth that amount to two fleas arguing over who owns the dog...

Thanks to all!

We’re all just wasting our time when we should be saving up for that $525 pp direct BCV contract in 2041!

 

[Jlo85]

(of course, if you are saying the prices WITH inflation may be $53 to $59, that may be truer... but if so, then re-sale at Riviera would have the same inflation, and would be around $600-700 per point).

It did contemplate inflation. My position is that as long as there is a savings over rack, people will buy it.

Whether Riviera will appreciate is an open question. I have a tendency to think it'll behave more like a traditional timeshare, since the restrictions essentially make it that, and people will be trying to offload it on eBay for $0.01 in 2041.

 

[havoc315]

Can't believe I'm doing this, but this is my data. I'm done:

Resort	Sales Start Date	100% Declared Date	Original Direct Price	Original Resale Price	Resale Date	Days Elapsed	Resale Discount	Source
Grand Floridian Expansion	03/03/22​		207​	172​	03/31/22​	28​	17%​	https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-july-2022/
Riviera Resort	12/16/19​		188​	139​	02/23/20​	69​	26%​	https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-december-2020/
Copper Creek	04/05/17​	03/13/19​	176​	155​	12/31/17​	270​	12%​	https://www.dvcresalemarket.com/blog/dvc-resale-price-changes-from-2016-2019/
Polynesian	01/13/15​	08/10/17​	160​	146​	12/31/16​	718​	9%​	https://www.dvcresalemarket.com/blog/dvc-resale-price-changes-from-2016-2019/
Grand Floridian	05/23/13​	10/31/14​	145​	146​	09/30/14​	495​	-1%​	https://www.dvcresalemarket.com/blog/analysis-of-dvc-resale-price-changes-2014-2016/

I think you just exposed your errors...
Note, only GFV has data after only 28 days elapsed!!! Because.. GFV is unique, in that it was a CLOSED resort where direct sales had already been around $250+.
Note how selective you are about RIV... you're using data for RIV after 69 days elapsed, for December 2020, when the parks were at very limited capacity due to Covid (and when some early international direct buyers were likely dumping their points as they couldnt even travel to the US).... Why not use 718 day data for Riviera just like you did for Poly? If you actually used elapsed time for RIV similar to what you used for Poly and original GFV... If you used a 500-700 day elapsed model.... you'd end up around October 2021, when re-sale for Riviera was reported at 155 -- Only a 17% discount!
And let's use a similar model for CCV --- Go to 500-700 days, like you did for Poly and GFV --
Through 2020, CCV was getting $133 to $148 per point... That's up to a 24% discount, not a 12%.

Meanwhile.... Obviously, there is a HUGE factor you haven't listed in your chart -- What was the DIRECT price at the TIME of the resale? That's THE controlling factor, and you ignored it. Obviously, people weren't paying a 1% premium for Grand Floridian in September 2014, if they could have it 1% cheaper direct...

I think you've proven how to manipulate data..

 

[RoseGold]

In the past, it was difficult to be underwater on direct. Maybe for a year or two after BLT. Now, it's easy at all of the recent builds. We have seen a few stories of this, but we haven't seen the anger, like you have for many other timeshare systems.

DVC has spent decades building an awesome name and reputation. Like any timeshare, I have no doubt Disney can capitalize on this goodwill to sell RIV to people with mickey pretzel on their shirts, at least for now. With Poly2, we will see if this is the long term plan.

 

[Jlo85]

I'm just annoyed because I think it's ridiculous to act like resale restrictions haven't had a measurable impact. And that's really misleading to any prospective buyers of DVC.

I also think it's short-sighted to not consider the long-term value of such a contract. I have 2 friends with 2 separate timeshares they can never use (because they're never available), and they can't pay anyone enough to take them. They're just waiting on them to expire. It's very possible that Riviera could be that.

 

[havoc315]

It did contemplate inflation. My position is that as long as there is a savings over rack, people will buy it.

Whether Riviera will appreciate is an open question.

Appreciate or inflation?? You can't include inflation for one and not for the other.

You really believe that rack rate at Riviera isn't going to increase over 20 years?!?!
As long as there is savings over rack rate, people will buy it.

Now, in 2041 -- Let's say rack rate at Boardwalk is $59 per point, as you suggest...
So, you're suggesting that inflation will increase the rack rate by 3-4x..
So dues will be about $25 to $30 per point.
And closing costs will be $3,000 to $4,000.

So a 100 point contract ---
Rack rate would be $5900.

So how would buying 100 points be cheaper than $5900?
Well, take off the 3,000 to $4,000 for closing costs...
Then take out the $2,500 to 3,000 for dues.

So best case scenario, if you bought the contract for $1 per point, then your DVC price would be:
$100+ $3,000-$4,000 + $2,500-$3,000 -- So if you got the contract for $1 per point, your DVC cost would be between $5600 and $7100.

Dang, at $1 per point, it's rack rate would still probably be cheaper than buying DVC!!!

I have a tendency to think it'll behave more like a traditional timeshare, since the restrictions essentially make it that, and people will be trying to offload it on eBay for $0.01 in 2041.

 

[pianomanzano]

I'm just annoyed because I think it's ridiculous to act like resale restrictions haven't had a measurable impact. And that's really misleading to any prospective buyers of DVC.

As is telling people that in 2041 RIV will be sold for a penny on ebay and that you can get good value for a BCV in 2041. Talk about misleading.

 

[Jlo85]

As is telling people that in 2041 RIV will be sold for a penny on ebay and that you can get good value for a BCV in 2041. Talk about misleading.

Eh, I mean that actually happens today with other timeshares. But I digress…

 

[Paul Stupin]

I'm just annoyed because I think it's ridiculous to act like resale restrictions haven't had a measurable impact. And that's really misleading to any prospective buyers of DVC.

I also think it's short-sighted to not consider the long-term value of such a contract. I have 2 friends with 2 separate timeshares they can never use (because they're never available), and they can't pay anyone enough to take them. They're just waiting on them to expire. It's very possible that Riviera could be that.

As has been said repeatedly, it’s too early to determine the affect of resale restrictions on Riviera sales, but I would bet that they’re not a significant factor. They might be for those of us more informed types who frequent these boards, but in the short term they have zero effect on Riviera direct buyers because they don’t apply to them, and everyone thinks, as Rose Gold said, that they’re never going to sell.

The average tourist who purchases at the parks on a whim probably doesn’t even know about them, and though the guides have to disclose said restrictions at some point or another during the actual purchase process and paperwork, you can bet they’re trained on how to mention them in the most nondescript fashion imaginable and then move on.

 

[Cubbiefan1734]

I'm less concerned about resale value than I am about DVC turning into a different product than what I was sold. Is this too crazy of a scenario to envision?

All future new DVC resorts carry the same restrictions as Riviera going forward. So, as each new resort goes on sale, millions of additional points are introduced into a "system" that has different rules depending on when and how you bought your points. Resale owners will not be able to book any resort post-RIV, so they will all stick to their home resort or O14. Because of that, direct buyers of new resorts will have much less chance to book O14 either, and will have to stick to their home resort or possibly another post-RIV resort. So as more and more new points are sold with restrictions, the harder and harder it gets to move anywhere, even for direct buyers. Now, this assumes there remains a large proportion of resale points in the "system", which I assume would be the case until at least 2042 and possibly even until SSR expires.

That may sound like the sky is falling, but if that becomes true, then I feel the product I bought has fundamentally changed...more so than just removing perks or extras, which I know are not guaranteed.

 

[Sandisw]

I'm just annoyed because I think it's ridiculous to act like resale restrictions haven't had a measurable impact. And that's really misleading to any prospective buyers of DVC.

I also think it's short-sighted to not consider the long-term value of such a contract. I have 2 friends with 2 separate timeshares they can never use (because they're never available), and they can't pay anyone enough to take them. They're just waiting on them to expire. It's very possible that Riviera could be that.

The piece you do seem to be ignoring is the difference in RIV so far has been impacted by other variables that could be playing a role in it’s resale value at this point and something the other resorts didn’t deal with. The pandemic is a big one and it’s just too earlier to say one way or the other what part of the difference is the restrictions.

We have RIV resale selling for more than many other DVC resorts which do not have them. What is your opinion on why that is?

But, even by your numbers, the snapshot today is showing the difference between the two as around 10%. Do you really believe that difference can’t be explained because of the resorts themselves?

VGF already had an established resale value, as the direct price was $255/point when they stopped sales to announce BPK. That is a pretty Important variable.

In terms of other timeshares, RIV is attached to WDW. As long the parks exist, it isn’t going to to the way of those.

You are confident that RIV will be worthless, but so far, numbers don’t show it being headed that way.

VGF started at $145 and is currently sitting around $175 resale. Thats only a 29% increase in 9 years. Thoughts on that?

What about how ROFR has played a role in resale prices this past year? Couldn’t that be a contributing factor to why prices have risen the way they have for sold out resorts and masking any impact that resale restrictions could have on legacy resorts? Is it also possible that we haven’t seen the full impact yet because it is only RIV?

So, as you say the thread is about how resale restrictions will Impact the resale value down the road and until it’s in full swing, it’s just to early to have a concrete answer.

All we know for sure is that RIV resale is selling for more than some resorts with no restrictions and subject to ROFR.…but not as well as other ones who have no restrictions and subject to ROFR.

 

[Sandisw]

I'm less concerned about resale value than I am about DVC turning into a different product than what I was sold. Is this too crazy of a scenario to envision?

All future new DVC resorts carry the same restrictions as Riviera going forward. So, as each new resort goes on sale, millions of additional points are introduced into a "system" that has different rules depending on when and how you bought your points. Resale owners will not be able to book any resort post-RIV, so they will all stick to their home resort or O14. Because of that, direct buyers of new resorts will have much less chance to book O14 either, and will have to stick to their home resort or possibly another post-RIV resort. So as more and more new points are sold with restrictions, the harder and harder it gets to move anywhere, even for direct buyers. Now, this assumes there remains a large proportion of resale points in the "system", which I assume would be the case until at least 2042 and possibly even until SSR expires.

That may sound like the sky is falling, but if that becomes true, then I feel the product I bought has fundamentally changed...more so than just removing perks or extras, which I know are not guaranteed.

That is a good point in terms of the legacy resorts, but as each new resort is added, those direct buyers will have more choices to move around within those resoets.

But, even over time, it’s going to take a long time to see a resort end up with enough resale buyers stuck there that trading will become impossible.

Of course, we already do have this with some resorts and certain times of the year, BWV and BCV is pretty hard to get during the Fall because a lot of owners don’t stay elsewhere. VGC is the same thing.

Of course, it’s not exactly the same, but there are plenty of people who self impose restrictions on their points and even though they can use them elsewhere, they don’t which means the impact is the same. Trading difficulty.

The product is changing and none of us know what the future hold and that is why I think making assumptions about resale value may no be wise.

DVD has too many tricks up their sleeve they can use to manipulate the market to count on anything from the past continuing to be true in the future,

 

[pianomanzano]

Eh, I mean that actually happens today with other timeshares. But I digress…

You’re really grasping at straws here. Yea, other timeshares from other non-Disney locations that last in perpetuity and are crappily managed go for a penny but as long as the parks exists RIV will hold some value. But as @Sandisw said it’s too early and too many outside factors. Maybe in the multiverse there exists a scenario in 2041 where I’m holding a sign out on Buena Vista Drive begging for a penny to get rid of my RIV contract and you send one my way from the many riches you have after flipping your 2042 contracts.

Ok, enough fodder for @DonMacGregor and gang from me!

 

[sethschroeder]

RIV opened in 2019. I doubt anyone at Disney wanted it half sold in 2022.

I'll give you Covid and no APs and other excuses, but lets not act that's a normal sales pace for anything but poor Aulani or that it was the plan all along.

Yes it started out outselling CCV and now after VGF went back on the market its outselling it after the initial 2 month VGF surge.

So yes Disney is likely quite happy with the numbers.

I don't know your background by I work across sales, sales forecast, and data analyst roles with a major company. You can't take today and blindly align it to yesterday.

Remember you had full shutdown then a long period of partial capacity, then crazy inflation, and now in the middle of a recession (even though some don't call it that anymore). The last 2 years is unprecedented for roadblock to solid sales made up slightly by increase in travel dollars from shutdown.

 

[sethschroeder]

That's what I said? Covid is one of the reasons it's half sold years later, well and the resale restrictions and overall cost.

They have an army of salesmen and it's still not sold.

You said resale restrictions are why its not selling. Thing is it is selling... That's the point.

 

[Paul Stupin]

You’re really grasping at straws here. Yea, other timeshares from other non-Disney locations that last in perpetuity and are crappily managed go for a penny but as long as the parks exists RIV will hold some value. But as @Sandisw said it’s too early and too many outside factors. Maybe in the multiverse there exists a scenario in 2041 where I’m holding a sign out on Buena Vista Drive begging for a penny to get rid of my RIV contract and you send one my way from the many riches you have after flipping your 2042 contracts.

Ok, enough fodder for @DonMacGregor and gang from me!

Great post. Thank you!

 

[sethschroeder]

I'm really done with the math battles, I've cited my sources. But if you honestly believe that if Riviera was selling today without its restrictions, that I as a direct buyer could expect a 30% immediate loss if I go to sell it, then that is certainly a take to have.

To me, 15% sounds like a fair discount for a resale buyer, and has historically been the case. A 30% loss is ridiculous. And you can try to explain it away, but I just don't agree.

Copper Creek in Sept 2019
Direct - $210
Resale - $142 + $145 (ROFR thread)
31%-32%

So 30% off right there.

I bought RIV at $155/point in Aug 2020 no clue what you could get for 150 point contracts.

 

[sethschroeder]

I'm just annoyed because I think it's ridiculous to act like resale restrictions haven't had a measurable impact. And that's really misleading to any prospective buyers of DVC.

I also think it's short-sighted to not consider the long-term value of such a contract. I have 2 friends with 2 separate timeshares they can never use (because they're never available), and they can't pay anyone enough to take them. They're just waiting on them to expire. It's very possible that Riviera could be that.

Guess what all the other DVC would be worthless as well then.

It will always have value because it will compete with Disney Cash rates and people will buy points simply to rent.

So if RIV you can't even give away that means WDW is out of buisness and every other DVC contract is worthless.

 

[Jlo85]

I love how everyone on this thread (but me) has bought Riviera. Kind of tells you where the perspective is coming from.

I'm really not doom and gloom, but y'all are wearing rose-colored glasses. And my guess if is most of you sold today, you'd be taking a loss. I think that if the retail restrictions weren't there, that might not be the case. It's a really nice resort, I'd buy it without restrictions.

Also, that any of you think that Disney's fanciest new resort should be reselling 7th among the 11 WDW resorts is beyond me. Again, I think y'all just drank the koolaid.

 

[Royal Consort]

I'm less concerned about resale value than I am about DVC turning into a different product than what I was sold. Is this too crazy of a scenario to envision?

All future new DVC resorts carry the same restrictions as Riviera going forward. So, as each new resort goes on sale, millions of additional points are introduced into a "system" that has different rules depending on when and how you bought your points. Resale owners will not be able to book any resort post-RIV, so they will all stick to their home resort or O14. Because of that, direct buyers of new resorts will have much less chance to book O14 either, and will have to stick to their home resort or possibly another post-RIV resort. So as more and more new points are sold with restrictions, the harder and harder it gets to move anywhere, even for direct buyers. Now, this assumes there remains a large proportion of resale points in the "system", which I assume would be the case until at least 2042 and possibly even until SSR expires.

This has been my working assumption buying in to DVC. I bought home resorts to use without the intention of trading into any others. If the system changes, it really doesn't affect me.