Here’s Why Resale Has Plenty of Room to Rise

[Drewski77]

If it's worth more to you than the current value it commands on the resale market, then you shouldn't sell. But that doesn't change the current market value.
Likewise, if it has more value to someone else than it does to you, you would sell it.

I think the whole point was that most owners value their DVC contracts higher than the current market value. And it seems the people here are in violent agreement on that concept, but seem to think someone is arguing with them.

Thank You! You said it better than I have.

Really surprised at the reaction and jabs at a fellow DVC owner that is simply saying that the supply side is constrained because even DVC owners who think resale is over priced are not selling.

Strange to get such a negative reaction.

 

[Drewski77]

I appreciate that, and was not intending to be contentious myself, rather I felt you were

I’m glad... it just doesn’t read that way. It seems rather like you’re trying to stir the pot.

Again, no... and this is where everything feels wrong... I don’t see how telling several people they’re proving your point -when we are doing the exact opposite- isn’t contentious in your mind?!? Because to me- that’s the very definition of it.


Now, to this point I would be happy to “help make.” I will readily agree that if supply is low (bc people refuse to sell) and demand is high (bc someone is willing to pay the current price)- prices will rise. No one will argue that point, but that is not what your original premise was. It was-

which is false. So, if your last post is what you meant to say all along, then we’re all on the same page, but if you are still holding to the first post’s position- then we’re going to have to (respectfully) agree to disagree.

No worries about disagreeing, that is what makes things on a message board interesting.

I certainly wasn’t trying to stir a pot, simply trying to use logic to prove a point...but your reaction (high emotion) isn’t something I’m looking to engage with.

So we’ll both be happy DVC owners...unless I do get that $1,000 point offer as I will happily sell

 

[CastAStone]

So you’ve changed your position from “buying at today’s prices” to valuing points at $1,000 per point?

Way to move the goal post.

Your position was:

But now the straw man is suddenly “if someone offered you $1,000 per point”?

Never a point anyone was making, except maybe the person you’re arguing with in your head who makes your position seem sound.

He’s dug in. It’s Not worth it.

 

[Drewski77]

He’s dug in. It’s Not worth it.

Really strange the negativity when I think as a fellow DVC owner who is not selling, we have agreement on 99% of what is being said.

I’m not sure what is controversial:

If a person who owns DVC and thinks resale is overvalued, but isn’t selling that is fine.

My point is, if that same owner didn’t own and had the same cash that would come from selling...that same owner would buy into DVC because he/she finds it worth it, even at today’s elevated prices.

How do I know they would do this?

Because they are not selling at today’s prices, hence resale continues to have room to rise.

My apologies for not doing a good job explaining and no worries on disagreeing, hopefully we can disagree without disrespect, goes for me as well.

 

[Starport Seven-Five]

You're only considering one side of the supply/demand equation. Demand has just as much influence on prices as supply.

 

[Drewski77]

You're only considering one side of the supply/demand equation. Demand has just as much influence on prices as supply.

Fair point, agreed.

With the current levels of demand and with elevated prices still not bringing material increases in supply, prices have room to go up.

 

[supersnoop]

One other consideration; a prior poster mentioned the commission factoring into decision, thus making the "current market value" not reflective of the actual liquid value of the asset. Along those same lines, you have to consider any tax levy on a gain from the sale. I've seriously been considering selling one of my contracts which might go for twice what I paid just 7 years ago, but between the commission and the capital gains taxes, funds at settlement wouldn't be enough to justify the sale.

 

[Drewski77]

One other consideration; a prior poster mentioned the commission factoring into decision, thus making the "current market value" not reflective of the actual liquid value of the asset. Along those same lines, you have to consider any tax levy on a gain from the sale. I've seriously been considering selling one of my contracts which might go for twice what I paid just 7 years ago, but between the commission and the capital gains taxes, funds at settlement wouldn't be enough to justify the sale.

Good points, it would have to make sense with what the “net” proceeds would be.

It does sound like for you though there would be a level where a sale would make sense.

I think that is the case for most of us. Would have to be higher than where we are now though, which is one reason resale supply is so low.

 

[CastAStone]

The point migrated from “people who think DVC is overpriced should sell their contracts” to “everyone has a price where they’d sell”.

Which like, yeah, that’s how a market economy works, but also, not necessarily, because the reason to collect money for a possession is to use that money to increase your total happiness, and if spending every fall weekend in a 2 bedroom Villa at Beach Club is the thing that makes you most happy, there’s no price at which you should sell. It’s not like that room is likely to be available any other way - Disney cash rooms are unpredictable, and the rooms are often too competitive for point rental, so one you sell, you no longer have the thing that makes you the most happy.

 

[MouseyMin]

I bought my first contract when the cash price of the moderate resorts per night became higher than the DVC dues for that night.
As far as I can tell, Disney cash prices have risen much more than the dues equivalent.
Therefore, as I still love going on my yearly trip to Disney, it would not be worth it to sell my points and start staying at the regular hotels again.

 

[mustinjourney]

I see a lot of posts by current owners saying, “I can’t believe how much resale has gone up, if I didn’t buy previously I certainly wouldn’t pay today’s prices.”

But here’s the reality:

If you own a DVC contract and you are not selling it...then in a sense you are buying at today’s prices.

The reason being, is you could sell at today’s prices and use the money elsewhere...which is the same as not owning and not buying.

I own at the Grand Californian and SSR, and how do I know that the increase in prices has room to run...I am not (any many are not) listing their contracts at these prices.

We won’t see a material slow down in resale until more owners not only “talk” about resale being too expensive, but actually take action and sell.

So far, this isn’t happening.

I tried making this same argument 5 years ago when I joined and the old crowd told me I was crazy.
Good luck!!!

 

[Leight19]

I understand conceptually there’s argument that if you think DVC resale is currently overpriced you would sell but it misses few things.

First, people with blue card points get more value for their points then what they would get for resale. This is mainly applicable when you compare direct ssr for $160 with incentives vs resale pricing at $125 now.

Second, I think the resale prices are also too high because of the current point surplus making booking difficult. With my current contract, I have all my points that would be at risk of expiring booked into reservations. If I were to buy a loaded contract, it is currently difficult to get booking and could continue to get worse as more people are open to travel. I think resale prices have to take a hit as people start getting frustrated with not being able to book (especially when they start losing points).

Third, as noted above, there are costs to sell and buy so there is price window where I’d evaluate price is too high to buy but not enough excess value to convince me to take 8% hit on commission.

 

[Drewski77]

The point migrated from “people who think DVC is overpriced should sell their contracts” to “everyone has a price where they’d sell”.

At least I know why I’ve received so many odd responses:

I have never said “people who think DVC is overpriced SHOULD SELL their contracts.”

I said that many people who think resale DVC is overvalued, do NOT sell their own contracts.

And they don’t sell for many great reasons, much like myself who isn’t selling.

The point being, as long as owners only “think” resale is overvalued, and yet do not sell, supply will be constrained.

I love my DVC contracts and the only difference I have with the example above, is I don’t think resale is overvalued...and it seems the market agrees with me.

 

[Drewski77]

I tried making this same argument 5 years ago when I joined and the old crowd told me I was crazy.
Good luck!!!

Glad I’m not alone in this, thanks!

 

[Drewski77]

I bought my first contract when the cash price of the moderate resorts per night became higher than the DVC dues for that night.
As far as I can tell, Disney cash prices have risen much more than the dues equivalent.
Therefore, as I still love going on my yearly trip to Disney, it would not be worth it to sell my points and start staying at the regular hotels again.

All good points, so you would probably agree that resale is not overvalued even at today’s prices.

 

[Drewski77]

I understand conceptually there’s argument that if you think DVC resale is currently overpriced you would sell but it misses few things.

First, people with blue card points get more value for their points then what they would get for resale. This is mainly applicable when you compare direct ssr for $160 with incentives vs resale pricing at $125 now.

Second, I think the resale prices are also too high because of the current point surplus making booking difficult. With my current contract, I have all my points that would be at risk of expiring booked into reservations. If I were to buy a loaded contract, it is currently difficult to get booking and could continue to get worse as more people are open to travel. I think resale prices have to take a hit as people start getting frustrated with not being able to book (especially when they start losing points).

Third, as noted above, there are costs to sell and buy so there is price window where I’d evaluate price is too high to buy but not enough excess value to convince me to take 8% hit on commission.

What I’m getting at is when someone who thinks DVC is overvalued and yet does not want to sell for many great reasons (myself included) the logical conclusion for that person would be to see resale as not overvalued.

Perhaps we disagree on this, but as two DVC owners who aren’t selling we do agree that DVC is great to own.

 

[Leight19]

What I’m getting at is when someone who thinks DVC is overvalued and yet does not want to sell for many great reasons (myself included) the logical conclusion for that person would be to see resale as not overvalued.

Perhaps we disagree on this, but as two DVC owners who aren’t selling we do agree that DVC is great to own.

I have blue card points at akv I would not sell for $125 or whatever akv is these days. If resale had all the blue card perks I would definitely buy more at current resale prices. The buy vs sell on resale market is apples and oranges for anyone with blue card privileges and me thinking it’s worth holding my blue card points at this price does not mean resale is priced correctly.

 

[DonMacGregor]

I "think" it’s the apparent dissonance between someone throatily proclaiming (I'm exaggerating a little) that the resale market is heavily overprioced, while at the same time staunchly refusing to sell that very same commodity that they have in their possession.

Kinda like a 30-something stumbling across an article about Pokemon cards being worth 100's of dollars, realizing they have an entire suitcase full of them up in the attic, but refusing to get them down and sell them.

The argument suffers when you replace a bunch of game cards that are otherwise useless to the current owner with something that has current utility and is being used to its fullest (or close to fullest) potential. In that scenario, the DVC seller, if he intends to continue vacationing with DVC, will either have to re-purchase the points they sold (at a loss now with associated costs), or rent (with associated costs and premiums).

I think someone else made the same point: no matter how high the prices go, there's never any motivation or benefit for a current owner who intends to continue vacationing with DVC at their current levels. It's actually a huge disincentive. Selling something you're just going to have to turn right back around and buy back (with additional costs) makes no sense.

 

[Drewski77]

I have blue card points at akv I would not sell for $125 or whatever akv is these days. If resale had all the blue card perks I would definitely buy more at current resale prices. The buy vs sell on resale market is apples and oranges for anyone with blue card privileges and me thinking it’s worth holding my blue card points at this price does not mean resale is priced correctly.

Fair enough, for some owners the blue card (which I have) are worth more than the equivalent non-blue card contracts by quite a factor.

Not every resale owner has a blue card though, but again, fair distinction to make for some.

 

[Drewski77]

I "think" it’s the apparent dissonance between someone throatily proclaiming (I'm exaggerating a little) that the resale market is heavily overprioced, while at the same time staunchly refusing to sell that very same commodity that they have in their possession.

Kinda like a 30-something stumbling across an article about Pokemon cards being worth 100's of dollars, realizing they have an entire suitcase full of them up in the attic, but refusing to get them down and sell them.

The argument suffers when you replace a bunch of game cards that are otherwise useless to the current owner with something that has current utility and is being used to its fullest (or close to fullest) potential. In that scenario, the DVC seller, if he intends to continue vacationing with DVC, will either have to re-purchase the points they sold (at a loss now with associated costs), or rent (with associated costs and premiums).

I think someone else made the same point: no matter how high the prices go, there's never any motivation or benefit for a current owner who intends to continue vacationing with DVC at their current levels. It's actually a huge disincentive. Selling something you're just going to have to turn right back around and buy back (with additional costs) makes no sense.

Good points, and I would just say that I do think all DVC properties have the ability to pay cash directly to Disney for a room.

Meaning, there is definitely a point value that I would sell my contracts but it’s not there yet, apparently the resale market sees it this way as well.