Future resale value on restricted resorts?

[Sandisw]

Lot of post-purchase rationalization in this thread. Here is my source for CCV: https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-june-2020/. The $130 number y'all are citing is an aberration. And if we're doing outliers, I could quickly cite the $118/point resale price on the ROFR thread for Riviera.

If you bought Riviera and are happy, I'm happy for you. You say it wasn't an investment, so you shouldn't really care about the resale value anyways (since you are never going to sell). Please don't come for me!

One question I would have for anyone is how much do you think Riviera would be selling for without the restrictions? Like I said, I think it'd be $160/point (probably higher). If you truly feel that $144/point is where it would be, I think you're crazy.

I will tell you why I think it would not be much higher right now…other than maybe $150…

The direct price. 200 points today for RIV direct is $188..with incentives,

Using your $160/pt…That would result in a $5600 savings over direct,

Since we are assuming no restrictions, what would one be eligible for for that extra? Access to discounted APs and membership extras…which is what was in place when CCV went on sale…

Take a family of 4 wHo might save $1600 a year on that AP…it’s 4 years and you have made up the difference. And you now are eligible for whatever benefits that DVD might offer.

So, is it worth spending an extra $5600 now to have the chance at discounts and less expensive APs? Very well may be.

Now, APs are currently suspended so it may be viewed different but since we are turning back the clock, I’m putting it back to what was available when CCV and others were on sale.

We all know membership extras don’t matter to everyone and are not guaranteed. But, resale locks you out of them today and direct gives you a chance.

So, that new buyer today who wants to own at RIV and finds value in what direct has to offer…and I am pretending no restrictions of any kind on any resort…spending that extra $5600 is not such a huge amount over the course of ownership that they go direct.

Now, let’s use average price of $144…you are looking at $8800 more to go direct….much different situation…now, that potential AP savings takes almost 6 years to make back up. Maybe that’s enough of a savings to forgo direct..

As long as direct gives you benefits that resale doesn’t, the difference between the two has to be enough to forgo those benefits.

IMO, if the resale restrictions were a factor to any big degree, RIV would be averaging a lot lower than it is.

Actually, .when you think about it, those RIV resale buyers could have spent about $5K more and ended up with BLT, PVB, or CCV and had access to all the resorts except RIV….but they didn’t…and that is why I think the resale price is more about the difference between direct and resale and not the restrictions….right now

Lets see what happens in two more years when we know about Poly tower.

 

[dvc lover 1970]

An important question also -- If we assume the restrictions do hurt re-sale value, HOW much will it impact re-sale value.

DVC should not be considered an investment.

Most recent resale prices -- AKL was $133 per point, RIV was $144 per point.
Let's assume that re-sale restrictions do hurt the re-sale value of RIV...

So over the next 5 years, the "less restricted AKL points" appreciate by 10%... but those RIV points are weighed down and only appreciate by 5%..
So in 5 years.. AKL is $146 per point and RIV is $151 per point.

So you purchased 100 points of AKL for $13,300 and you resold them for $14,400..
Or, you purchased 100 RIV points for $14,400 and then resold it for $15,100...

Is that enough to really drive a purchase decision? If you prefer RIV over AKL, should you pick AKL because it will do a few hundred dollars better on the resale market?

There is no evidence that the re-sale restrictions will decimate the value of RIV re-sale compared to other resorts. So ok, maybe the points appreciate a tiny bit worse than the other resorts.... That's not really going to make a big $$$$ difference. Not big enough to override "buy where you want to stay."

Not sure where you saw RIV resale at 144 sold price. Sold prices I am seeing averaging around 130s. List price seems to be in the 140's from what I have been following that is not the selling price. Also there are a lot of contracts on the market and small contracts are sitting for extended time.

 

[Sandisw]

Not sure where you saw RIV resale at 144 sold price. Sold prices I am seeing averaging around 130s. List price seems to be in the 140's from what I have been following that is not the selling price. Also there are a lot of contracts on the market and small contracts are sitting for extended time.

DVC resale market figures show that. Lots of resorts though are seeing contracts last much longer these days…I haven’t noticed that being unique to RIV. For example…currently 8 RIV , 20 VGF and 28 CCV. on board sponsors site. SSR has 65! I just think the market is like this for all.

 

[havoc315]

DVC resale market figures show that. Lots of resorts though are seeing contracts last much longer these days…I haven’t noticed that being unique to RIV. For example…currently 8 RIV , 20 VGF and 28 CCV. on board sponsors site. SSR has 65! I just think the market is like this for all.

View attachment 702214

The market is poor. Re-sale prices have been flat/down across the board over the last year.

Speculation but possible causes:
1– increasing interest rates making it less desirable to finance and buy.
2– inflation, with higher prices of necessities, less discretionary spending for luxuries.
3–With 2 resorts in active sales, possibly more potential buyers going towards direct.
4– Market saturation. The supply has just grown more than demand. They added more and more DVC units. More long time/original owners are aging out of their Disney years and re-selling. (If you were 40-50 years old buying Boardwalk 30 years ago.. you are now getting to the point where you may decide between passing on DVC or reselling it).

This may be a temporary lull. But if it’s due to market saturation, it’s only going to get worse.

 

[Ruttangel]

The market is poor. Re-sale prices have been flat/down across the board over the last year.

The market is oversaturated with contracts but what is interesting is that if you had extended your chart further back in time then BWV, BCV, SSR and AKV have been so actively bought by DVD that the flat rate you are talking about is historically very high.
BCV was rolling along at $140, BWV $120 and SSR, AKV $110 until it started getting aggressively taken.
Here is some data that shows some longer trends.
By the way this data also confirms a point you had about CCV, not until it sold out and started getting taken in ROFR has it jumped from $145 to $175.
The 2 flat resale contracts over this period were AUL and CCV, obviously active sales.

Old ROFR data

 

[princesscinderella]

I bought fixed week 52 SV studio for RIV direct at $176 pt in 2021 and got 2020 points since it was right before my UY started. As time plays out it will probably be one of my smartest DVC purchase behind buying a small VGC contract. It was already undervalued and had no 10% up charge for the fixed week because they had already adjusted the point chart. Now to buy that same week if they still have it available is 230pts whereas I only needed 196. That’s 34 points I don’t have to pay dues on every year for my automatic booked room at one of the busiest times of year. They are only restricted if you buy resale and I think others have made good points about down the road once there’s more restrictions to go around that the playing field will function as level unless Disney throws more curveballs. If you even think you like RIV I’d buy direct and not worry about the restrictions that won’t be your issue especially if you keep it for 15-20 years you will have gotten your money’s worth. I haven’t used my fixed week yet but plan to use it every year once the kids fly the coupe in 6 years. We loved our stay at RIV and are looking forward to our stay at thanksgiving time again this year.

 

[sethschroeder]

All of this has been obvious for many years. The restrictions change the product completely, which is why it isn't selling.

Except it is and has been selling and is outselling VGF the last two months.

Pricing is a little different I think which does help but RIV has been selling pretty close to where DVC would expect it to this whole time.

 

[Jlo85]

I will tell you why I think it would not be much higher right now…other than maybe $150…

I disagree. We're talking about a resort of a similar caliber to Grand Floridian. VGF is reselling at about a 15% discount to direct. You could argue Riviera doesn't have the same brand or name reputation as VGF, but I don't personally think that explains the stark difference in resale value. Riviera is reselling at a 28% discount (almost double VGF), and I would say that is a result of resale restrictions.

 

[RoseGold]

Pricing is a little different I think which does help but RIV has been selling pretty close to where DVC would expect it to this whole time.

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.

 

[CaptainAmerica]

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.

Come on. I'll dump on Riviera all day long but COVID is not an "excuse." It's the most disruptive event to happen to The Walt Disney Company since the death of Walt himself. Worse than 9/11.

 

[RoseGold]

Come on. I'll dump on Riviera all day long but COVID is not an "excuse." It's the most disruptive event to happen to The Walt Disney Company since the death of Walt himself. Worse than 9/11.

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.

 

[havoc315]

I disagree. We're talking about a resort of a similar caliber to Grand Floridian. VGF is reselling at about a 15% discount to direct. You could argue Riviera doesn't have the same brand or name reputation as VGF, but I don't personally think that explains the stark difference in resale value. Riviera is reselling at a 28% discount (almost double VGF), and I would say that is a result of resale restrictions.

Then how do you explain that the Riviera discount is smaller than the other 14 “unrestricted” resorts?

Fact is — GFV is the outlier here. Riviera is right with all the other DVCs. Since GFV is the outlier, the restrictions are unlikely to be the factor.

But… for the sake of argument, let’s assume the restrictions are the difference maker. And as a result, the resale value of Riv doesn’t hold up as well as GFV, but still holds up as well as every other resort…
So what?
Does it mean that people should only buy GFV.. none of the other resorts.. because GFV resale will be slightly better, 20 years from now?

I’ll fully admit the data is not yet conclusive. The data suggest the resale resurrections have something between zero impact on resale value, to possibly having a minor negligible impact. Should you avoid buying your favorite resort because the resale value may, worst case scenario, be a few dollars less than another resort 20 years down the road?

 

[CaptainAmerica]

Then how do you explain that the Riviera discount is smaller than the other 14 “unrestricted” resorts?

Easy, 2070 expiration.

But… for the sake of argument, let’s assume the restrictions are the difference maker. And as a result, the resale value of Riv doesn’t hold up as well as GFV, but still holds up as well as every other resort…
So what?
Does it mean that people should only buy GFV.. none of the other resorts.. because GFV resale will be slightly better, 20 years from now?

I’ll fully admit the data is not yet conclusive. The data suggest the resale resurrections have something between zero impact on resale value, to possibly having a minor negligible impact. Should you avoid buying your favorite resort because the resale value may, worst case scenario, be a few dollars less than another resort 20 years down the road?

I don't think the "should" is being direct at buyers, it's being directed at Disney. "Disney, because restrictions are hurting your sales, you should drop them."

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.

I'm saying it's impossible to strip those apart. COVID could very well be the only reason for RIV's sales pace. We don't know that it's definitely "COVID plus [fill in the blank]." COVID was so disruptive it might be just COVID.

 

[havoc315]

Easy, 2070 expiration.

That makes a huge difference compared to 2067 and 2064 expirations? Nah.

I don't think the "should" is being direct at buyers, it's being directed at Disney. "Disney, because restrictions are hurting your sales, you should drop them."

The restrictions aren't hurting Disney's sales. Disney's sales, apart from the Covid closure, are right in line with expectations compared to every other new resort. Last couple of months, it's been outselling GFV. Fact that GFV just re-opened for sales and only has 1.7 million points... Riv has been open for 3 years and has 6 million points to sell, and Riv is still outselling GFV, that tells you a lot.

Yes, the price is a little lower than GFV -- But that's not surprising. GFV has always commanded the highest price.

Aulani has no restrictions and a 2062 expiration date, and can't maintain the direct or resale prices of Riviera.

Looking at sold out resorts... AKL and SSR both command lower re-sale prices despite long contracts and the benefit of ROFR setting a floor.

Riviera sales have been very healthy, apart from the Covid lull.

I'm saying it's impossible to strip those apart. COVID could very well be the only reason for RIV's sales pace. We don't know that it's definitely "COVID plus [fill in the blank]." COVID was so disruptive it might be just COVID.

 

[pianomanzano]

I bought fixed week 52 SV studio for RIV direct at $176 pt in 2021 and got 2020 points since it was right before my UY started. As time plays out it will probably be one of my smartest DVC purchase behind buying a small VGC contract. It was already undervalued and had no 10% up charge for the fixed week because they had already adjusted the point chart. Now to buy that same week if they still have it available is 230pts whereas I only needed 196. That’s 34 points I don’t have to pay dues on every year for my automatic booked room at one of the busiest times of year. They are only restricted if you buy resale and I think others have made good points about down the road once there’s more restrictions to go around that the playing field will function as level unless Disney throws more curveballs. If you even think you like RIV I’d buy direct and not worry about the restrictions that won’t be your issue especially if you keep it for 15-20 years you will have gotten your money’s worth. I haven’t used my fixed week yet but plan to use it every year once the kids fly the coupe in 6 years. We loved our stay at RIV and are looking forward to our stay at thanksgiving time again this year.

My one regret about my RIV purchase was not getting a FW before they updated the fixed week charts!

 

[Jlo85]

.

Then how do you explain that the Riviera discount is smaller than the other 14 “unrestricted” resorts?

I've said this before, but comparing sold-out and actively selling resorts is silly. That's why I compared it to VGF. And CCV and PVB before it were both reselling at a 15% discount while in active sale. Riviera at a 30% discount is an outlier. And I would say it's because of resale restrictions.

Aulani has no restrictions and a 2062 expiration date, and can't maintain the direct or resale prices of Riviera.

Aulani isn't a WDW resort. And that's why I would argue it's selling at such a discount.

 

[discreet]

Resale value is important if you do DVC trading. If that's the game, then why not trade stocks instead?
I bought Riviera because it's one of my favorite resorts and I plan to use it a lot, not to sell it. If something really bad would happen to me or to my close family and I would have to sell... it would be something that bad that selling the contract at a loss will be the least of my worries.

 

[Jlo85]

Resale value is important if you do DVC trading. If that's the game, then why not trade stocks instead?
I bought Riviera because it's one of my favorite resorts and I plan to use it a lot, not to sell it. If something really bad would happen to me or to my close family and I would have to sell... it would be something that bad that selling the contract at a loss will be the least of my worries.

I get this, but I feel that a lot of buyers (including myself) are drawn to DVC exactly because it has retained its value. I wouldn't buy any other timeshare because they haven't retained their values. Owners literally can't get rid of their contract. I think it's kind of silly to say resale value is meaningless. And I'm really skeptical that most buyers think that way.

 

[pianomanzano]

Riviera is reselling at a 28% discount (almost double VGF), and I would say that is a result of resale restrictions.

I’d say the direct incentives play a bigger role than resale restrictions. Current incentives bring RIv’s price down to 176/pt at 200 points, and about half of the RIV listings are at 200 points or more. So, its resale price will have to be further discounted otherwise people would just go direct.

 

[discreet]

I get this, but I feel that a lot of buyers (including myself) are drawn to DVC exactly because it has retained its value. I wouldn't buy any other timeshare because they haven't retained their values. Owners literally can't get rid of their contract. I think it's kind of silly to say resale value is meaningless. And I'm really skeptical that most buyers think that way.

It's not meaningless, it's just not important to me. I don't do this as an investment.