Future resale value on restricted resorts?

[Nursemanit]

Let's say you bought March 2019 with opening incentives, $188/points. Let's go with the board sponsor's aggressive current (July 22) resale of 139. That's -49/point. Ouch.

BC (June 19) was 142, now (July 22) 167. That's +25. That's a $74/point spread.

I actually spent 182 for direct only last month ( Visa deal was great) Why spend any money on a resort you dont want - I was wishing I was at Epcot after 2 days in GF.

I also bought 100 of BWV and 100/PVB at the same time

BWV fell 20 a point and PVB went up 15 in one month.

But since am not selling no issue for me.

 

[Sandisw]

Let's say you bought March 2019 with opening incentives, $188/points. Let's go with the board sponsor's aggressive current (July 22) resale of 139. That's -49/point. Ouch.

BC (June 19) was 142, now (July 22) 167. That's +25. That's a $74/point spread.

I bought direct for $167 in 2019 for 175 points…and not the opening incentive. So many bought a lot less than $188 at the start.

 

[Jlo85]

So, not everyone trying to sell RIV right now are upside down are taking a big loss.

I think the concerning part is that CCV and AUL both were reselling for about 90% of their initial direct price 2 years after their debut. That Riviera is reselling for only 70% should be concerning for anyone who bought there.

And like I said, I feel like the list prices themselves are inflated. For example, one broker appears to have only sold one Riviera contract in the 1st QTR. One contract. And the only recent purchases on the ROFR board (few and far between) are much cheaper than list prices. There is just no demand for these contracts.

 

[NVDISFamily]

Right now Riviera is competing with direct sales and the benefit of owning the points direct and the lower cost to buy in is adding downward pressure on the value of the points on the resale market. I think once Riviera is no longer selling direct it's price on the resale market will go up.

I do think Disney at some point will offer a program to "wash" the "dirty" resale points. It's an easy way for them to make money and will be more needed once a majority of the resorts are restricted (2042?).

The other big unknown is what will Disney do in 2042? Seems like a lot of prime Epcot area DVC will go offline for some changes and more importantly the point charts will reset. Will that beach club week that now costs 300 ish points cost 500 points? Will direct points at those resorts be 400 bucks a point by then.... who knows.

There is about a 99% chance I'll own the resort for at least 20 years and 90% chance I'll own them for 30+ years. Kids are young and we are looking forward to many years of great memories at the resorts. I just hope 20 ish years from now when I am ready to retire the Cabins at CCV will still be not too popular and I'll be able to book them with my Riviera points when the kids/family don't want to come down there. At least two weeks in a CCV cabin each year is my retirement dream

 

[sndral]

There are two sides to the market value of any product - supply & demand.
We can predict supply based on the number of points for each resort, so the larger the resort point-wise, the more supply, thus I’d predict cheapest to most costly based purely on supply as follows:
SSR 14,031,570
OKW 7,678,933
AKV 7,400,270
RIV 6,700,000 when sold out
BLT 5,733,530
BWV 4,872,175
VGF 4,320,800 when VGF2 sold out
Poly 4,032,720
CCV 3,321,220
BC 3,027,600
BRV 1,962,300
Thus, based on supply alone Riv when sold out should cost more than AKV and less than BLT. Right now w/ less than half the points sold the pool of potential resale points puts it into the BC/BRV range. I don’t think ROFR has a meaningful impact because DVC tends to focus on a couple of resorts & then move on to others & during recessions abandons ROFR altogether.
The second half of the equation is demand & that’s much harder to gauge, here’s the factors that will impact demand for DVC resale IMO w/ my take on where Riv falls w/ each factor:
Resale restrictions - negative in the mid term w/ majority of DVC not restricted
Contract end date - positive the most use years left right now
Location - neutral (not bus only, but also not walkable to park, next door to moderate.)
Carrying costs/MF - negative
Point cost to stay - negative
Newness - positive now, will become neutral once Poly2 opens
Economy - negative IMO, last recession saw significant drops in resale prices

 

[Sandisw]

I think the concerning part is that CCV and AUL both were reselling for about 90% of their initial direct price 2 years after their debut. That Riviera is reselling for only 70% should be concerning for anyone who bought there.

And like I said, I feel like the list prices themselves are inflated. For example, one broker appears to have only sold one Riviera contract in the 1st QTR. One contract. And the only recent purchases on the ROFR board (few and far between) are much cheaper than list prices.

Why concerning? That’s pretty typical for a resort in active sale. And, for a resort that is limited, I think 70% is pretty good.

CCV is sold out and it’s direct price is much higher. AUL has been selling for 10 years, and it’s still not sold

So, while it’s 90% of initial price, it’s also had a huge increase in direct pricing that helps the resale value continue to rise, as well as the fact that DVD has use ROFR.

I don’t think anyone expects that restrictions WONT (edited as I used the wrong word!) impact the market but it is the way of the future and the fact that there are people out there buying RIV resale for what they have tells you they are willing to accept restricitons.

The last piece is that the demand for resale RIV could very well not be there right now because the direct pricing makes so much more sense to buy it that way to give you the resort you want, the membership extras, and the ability to stay at new resorts.

In about 3 to 4 years , when RIV should sell out…assuming current trends…and the direct price goes up…then we will have a better idea what the demand would be for it as a one resort resort.

 

[RoseGold]

I do think Disney at some point will offer a program to "wash" the "dirty" resale points. It's an easy way for them to make money and will be more needed once a majority of the resorts are restricted (2042?).

I'm surprised they haven't washed points yet, even at a crazy high price. It would be consistent with ROFR + sell direct with the $60-ish point spread. Washing seems easier than doing all of that.

Maybe it's part of their whole don't ask - don't tell about resale in general.

 

[BeachClub2014]

Direct purchasers, who are now attempting to offload at a big loss, can’t say they were not warned.
There’s zero financial case for buying RIV over VGF direct. Zero. There may be a case to buy it if you love RIV so much you only want to stay there. That’s it.

Aside from the longer contract at RIV and better pricing. That sure feels like a financial case.

There's always a whole lot of RIV hating that goes on here, with lots of speculation that bottom is falling out on the RIV any day now. The facts argue differently. It has reasonably strong sales, even compared against the holy trail of the GFV, resale prices are in line with other resorts, and the Skyline is great.

 

[sndral]

…
I don’t think anyone expects that restrictions will impact the market but it is the way of the future and the fact that there are people out there buying RIV resale for what they have tells you they are willing to accept restricitons.

Well, I must be an outlier since I expect resale restrictions will impact the resale market - short term by depressing the price of resorts that are restricted - we just need to compare the resale prices of the 2 WDW resorts in active sales VGF (not restricted) v. RIV (restricted) to know that. Long term the resale value of all DVC WDW resorts will be lower, because the non restricted product we’ve enjoyed for decades was more valuable than the ‘way of the future’ product. DVC held remarkable resale value for a timeshare product, that era may be ending as 2042 approaches coupled with restrictions eroding the product’s resale value. I suspect we’ll look back on the pre restriction era of DVC as the halcyon days for resale value.

 

[RoseGold]

There's always a whole lot of RIV hating that goes on here, with lots of speculation that bottom is falling out on the RIV any day now. The facts argue differently. It has reasonably strong sales, even compared against the holy trail of the GFV, resale prices are in line with other resorts, and the Skyline is great.

What facts are those? There have been very few resales of RIV. And there's plenty sitting there. There's just not much RIV resale in play right now, probably because pretty much everyone who did it lost money. Even going off those handful of sales, RIV resale is not at all in line with other resorts. It's lower than BC, which only has 18 or 19 years left on it.

Sure, GF resale took a hit right now. I'd still much rather be selling or renting out VGF than RIV in 5 years, certainly in 20.

 

[Sandisw]

Well, I must be an outlier since I expect resale restrictions will impact the resale market - short term by depressing the price of resorts that are restricted - we just need to compare the resale prices of the 2 WDW resorts in active sales VGF (not restricted) v. RIV (restricted) to know that. Long term the resale value of all DVC WDW resorts will be lower, because the non restricted product we’ve enjoyed for decades was more valuable than the ‘way of the future’ product. DVC held remarkable resale value for a timeshare product, that era may be ending as 2042 approaches coupled with restrictions eroding the product’s resale value. I suspect we’ll look back on the pre restriction era of DVC as the halcyon days for resale value.

I meant to type that we all expect they would impact it.. good catch…I fixed !

 

[BeachClub2014]

Well, I must be an outlier since I expect resale restrictions will impact the resale market - short term by depressing the price of resorts that are restricted - we just need to compare the resale prices of the 2 WDW resorts in active sales VGF (not restricted) v. RIV (restricted) to know that. Long term the resale value of all DVC WDW resorts will be lower, because the non restricted product we’ve enjoyed for decades was more valuable than the ‘way of the future’ product. DVC held remarkable resale value for a timeshare product, that era may be ending as 2042 approaches coupled with restrictions eroding the product’s resale value. I suspect we’ll look back on the pre restriction era of DVC as the halcyon days for resale value.

Except this example ignores every other variable and difference between the two resorts that impact resale demand and pricing. Where is the actual evidence that restrictions at the Riviera has actually impacted sales, either direct or resale?

 

[BeachClub2014]

What facts are those? There have been very few resales of RIV. And there's plenty sitting there. There's just not much RIV resale in play right now, probably because pretty much everyone who did it lost money. Even going off those handful of sales, RIV resale is not at all in line with other resorts. It's lower than BC, which only has 18 or 19 years left on it.

Sure, GF resale took a hit right now. I'd still much rather be selling or renting out VGF than RIV in 5 years, certainly in 20.

I was referring to the sky is falling mantra about the Riviera that many espouse here, not just focused on resales.

 

[BeachClub2014]

I'd still much rather be selling or renting out VGF than RIV in 5 years, certainly in 20.

Time will tell, right? We will know what happens in 5 or 20 years, that's for certain

 

[Sandisw]

What facts are those? There have been very few resales of RIV. And there's plenty sitting there. There's just not much RIV resale in play right now, probably because pretty much everyone who did it lost money. Even going off those handful of sales, RIV resale is not at all in line with other resorts. It's lower than BC, which only has 18 or 19 years left on it.

Sure, GF resale took a hit right now. I'd still much rather be selling or renting out VGF than RIV in 5 years, certainly in 20.

But it averaged more than BRV, SSR, AKV, and OKW which are not restricted…

 

[dvc lover 1970]

I'd buy RIV resale too, and take whatever color card they gave me, if the price were right.

But let's be real. They have an army of salesmen and kiosks for a reason. The plan was to sell this thing, like any other timeshare, who cares what it is worth in ten years. And plenty of people buy those too. Disney knows educated buyers were going resale. The restrictions were the only chance to get back in the game competing against themselves, but the restrictions are really pinching short term sales. So, though DL Tower restrictions are obvious IMO, Poly2 is a tough decision for Disney, and a decision on the direction of the product as a whole.

Agree DLT will have restrictions, and as such it will mostly be limited to West coast buyers.

There are two sides to the market value of any product - supply & demand.
We can predict supply based on the number of points for each resort, so the larger the resort point-wise, the more supply, thus I’d predict cheapest to most costly based purely on supply as follows:
SSR 14,031,570
OKW 7,678,933
AKV 7,400,270
RIV 6,700,000 when sold out
BLT 5,733,530
BWV 4,872,175
VGF 4,320,800 when VGF2 sold out
Poly 4,032,720
CCV 3,321,220
BC 3,027,600
BRV 1,962,300
Thus, based on supply alone Riv when sold out should cost more than AKV and less than BLT. Right now w/ less than half the points sold the pool of potential resale points puts it into the BC/BRV range. I don’t think ROFR has a meaningful impact because DVC tends to focus on a couple of resorts & then move on to others & during recessions abandons ROFR altogether.
The second half of the equation is demand & that’s much harder to gauge, here’s the factors that will impact demand for DVC resale IMO w/ my take on where Riv falls w/ each factor:
Resale restrictions - negative in the mid term w/ majority of DVC not restricted
Contract end date - positive the most use years left right now
Location - neutral (not bus only, but also not walkable to park, next door to moderate.)
Carrying costs/MF - negative
Point cost to stay - negative
Newness - positive now, will become neutral once Poly2 opens
Economy - negative IMO, last recession saw significant drops in resale prices

Respectfully disagree. The one downside is the resale restrictions. AKV can be used anywhere, and people buy those to use other places. I have colleagues who purchased both akv and ssr to use other places. Cannot do that with restricted resorts. Those are now a niche market.

 

[Jlo85]

I also question the notion that RIV will be the template for future resort restrictions. I tend to think it’s more of a pilot. And if it leads to unhappy customers because their asset lost a lot of its value, I tend to think that this won’t be in Disney’s interest. Right now, Riviera is losing more of its value more quickly than prior resorts IMO.

 

[Sandisw]

I also question the notion that RIV will be the template for future resort restrictions. I tend to think it’s more of a pilot. And if it leads to unhappy customers because their asset lost a lot of its value, I tend to think that this won’t be in Disney’s interest. Right now, Riviera is losing more of its value more quickly than prior resorts IMO.

The good news is that we should have an idea if it’s still on the table when they announce the rules for VDH and Poly tower!

But remember, the can get rid of those restrictions at RIV with the click of a pen whenever they want.

 

[dvc lover 1970]

I'd buy RIV resale too, and take whatever color card they gave me, if the price were right.

But let's be real. They have an army of salesmen and kiosks for a reason. The plan was to sell this thing, like any other timeshare, who cares what it is worth in ten years. And plenty of people buy those too. Disney knows educated buyers were going resale. The restrictions were the only chance to get back in the game competing against themselves, but the restrictions are really pinching short term sales. So, though DL Tower restrictions are obvious IMO, Poly2 is a tough decision for Disney, and a decision on the direction of the product as a whole.

Agree DLT will have restrictions, and as such it will mostly be preferred by West coast buyers.

 

[RoseGold]

And if it leads to unhappy customers because their asset lost a lot of its value, I tend to think that this won’t be in Disney’s interest.

There are plenty of DVC buyers who lost plenty of money in the last few builds. But you're right, DVC's overall message is still mixed up with the old, good value retention, from the legacy product and happy sellers who pretty much made money or broke even for a long time. The more timeshare-y DVC acts, the more they become like all the other timeshares, and they sure are moving in that direction.