Here’s Why Resale Has Plenty of Room to Rise

[zavandor]

All good points but:

I am specifically referring to the person who says:

“I own DVC but wouldn’t buy at today’s prices because it doesn’t provide enough value...but I’m not selling.”

Let me try it this way:

If someone offered you $500 per point to sell today and you couldn’t buy back in would you?

I have bought resale 10 years ago for around $50pp at SSR.
I am a blue card owner and I can use my points at all resorts present and future.
I could sell for maybe $110. Less taxes: 12% FIRPTA I think. I could get it back but it's complicated and would need to pay a professional and I should still pay capital gain on it, so probably I wouldn't get back anything anyway.
Less commissions: 8%

So my $110 would really be $88pp. Still a good profit.

But, if I want to buy back in and have the same product I need to buy direct, it means I would have to pay around $155 (not sure it's the actual price).
This means I currently own something that I would have to pay $155, but if I sell I would get half of that.
That's why I wouldn't buy at today prices but I won't sell.

 

[Drewski77]

I have bought resale 10 years ago for around $50pp at SSR.
I am a blue card owner and I can use my points at all resorts present and future.
I could sell for maybe $110. Less taxes: 12% FIRPTA I think. I could get it back but it's complicated and would need to pay a professional and I should still pay capital gain on it, so probably I wouldn't get back anything anyway.
Less commissions: 8%

So my $110 would really be $88pp. Still a good profit.

But, if I want to buy back in and have the same product I need to buy direct, it means I would have to pay around $155 (not sure it's the actual price).
This means I currently own something that I would have to pay $155, but if I sell I would get half of that.
That's why I wouldn't buy at today prices but I won't sell.

Good points and detailed analysis, and makes sense for the value you put on the blue card which I have as well.

My guess (maybe wrong) is if today you didn’t own SSR, but had the exact funds to buy with a blue card you would, because it is worth it to you.

I would as well. I own SSR and I’m not selling (even if we netted the amount to buy back in) and many DVC owners think the same.

This limits supply of resale, and many don’t value the blue card as highly, and thus resale goes up. And as direct SSR has strong sales, direct prices will increase and bring resale up as well.

The only difference between our views is I don’t think resale is overvalued. In fact, even above $110 for SSR (it’s already above this) I still don’t think it’s overvalued.

For now the resale market would agree that prices aren’t overvalued, but that can certainly change.

 

[CarolMN]

I believe that the true value of a DVC contract is whatever someone is willing to pay for it. Thus I do not believe that the current market is overvalued. (It's not like the stock market where you can sell something you don't actually have at the moment and you can't buy an option to purchase a DVC contract in the future anywhere that I know about).

Also, FWIW, I think resale prices are more related to Disney's cash prices for the hotels than they are to direct prices. As long as a contract can provide enough savings related to hotel cash prices, it will have value.

I have no idea when resale prices will increase or decrease (and neither does anyone else who posts here. It's all just opinion). People on this board have been predicting a significant decrease for the 2042 resorts for the past several years. Still not happening, Eventually they will be right. For sure in 2042. YMMV.

 

[Drewski77]

I believe that the true value of a DVC contract is whatever someone is willing to pay for it. Thus I do not believe that the current market is overvalued. (It's not like the stock market where you can sell something you don't actually have at the moment and you can't buy an option to purchase a DVC contract in the future anywhere that I know about).

Also, FWIW, I think resale prices are more related to Disney's cash prices for the hotels than they are to direct prices. As long as a contract can provide enough savings related to hotel cash prices, it will have value.

I have no idea when resale prices will increase or decrease (and neither does anyone else who posts here. It's all just opinion). People on this board have been predicting a significant decrease for the 2042 resorts for the past several years. Still not happening, Eventually they will be right. For sure in 2042. YMMV.

Great perspective, and you are so correct that no one knows what values will do, myself included.

And I agree on the cash price for a room having the biggest impact on pricing.

The current cash price at the Grand Californian certainly keeps me holding onto my hugely appreciated contract!

 

[Ssplashhmtn]

Again, it wouldn’t make sense to sell just bc we wouldn’t buy it. Quite the opposite! It means I’ll hold on even tighter since I still want the vacations & really don’t like today’s pricing

I agree. Sounds like you are in the same camp as the OP, and agree that today’s prices, while high, are still a good value for someone that wants DVC (or more of it) as compared to the alternative — which is no DVC vacations, or paying even more using cash options. I wish I could pay less per point, but I still see value and would be a buyer at today’s prices if I didn’t already have what I need.

That said, higher prices has helped fight off the addonitis a little; I needed the help!

 

[Drewski77]

I agree. Sounds like you are in the same camp as the OP, and agree that today’s prices, while high, are still a good value for someone that wants DVC (or more of it) as compared to the alternative — which is no DVC vacations, or paying even more using cash options. I wish I could pay less per point, but I still see value and would be a buyer at today’s prices if I didn’t already have what I need.

That said, higher prices has helped fight off the addonitis a little; I needed the help!

Appreciate your post, you’ve said it better than I have in 20+ replies!

And I agree on the higher prices holding me back from buying more...at least for now

 

[CaoilinnsMom]

I’m sorry, but I couldn’t disagree more. I have not bought at today’s prices- I bought at yesterday’s to hedge against “today.” I didn’t “invest” in DVC to watch my bank account grow. I paid for years of vacationing. If I sold all my DVC contracts today, ALL of my DVC expenses would be paid for with money left over (making my vacations nearly free!). However, I choose to keep them because I want to use it & I want my vacations to continue being at yesterday’s prices. That’s the point of DVC. Prepaying for 50 years of vacations. Not investing.

Now, if you argued about rising MF’s- you may have a leg to stand on.


Again, it wouldn’t make sense to sell just bc we wouldn’t buy it. Quite the opposite! It means I’ll hold on even tighter since I still want the vacations & really don’t like today’s pricing

Amen. Very silly.

I know you’ll ask... and, to be honest, I don’t know. We’re talking about 50 years down the road & I do not own a crystal ball. In just the past 20 years, some prices have doubled (direct), and others have more than tripled (resale)... while hotel/cash rates have gone up 3-4x in that same time! If that were to continue, I’d be quite the fool to take the $500 now if I could still be happily vacationing on these points every year for 20 years and they were now “worth” 3 times more than what I paid for them!!!

Exactly.

Not for 50 years, you can’t. And please don’t give me the “if you invest & use the profits spiel.” The stock market is no guarantee either, and Disney cash prices are outpacing inflation.


Even though I haven’t owned long enough to really be in that camp, I would still argue that those people have all the rights in the world to make that claim- because they have already gotten so much value out of their “cheap” contracts from decades ago! Those are absolutely gold... and you don’t sell your gold just because the price has gone up- no, you thank your lucky stars that you already own that hot commodity!!

all of this! Except I did buy in much lower and I will keep my points but I would never consider buying at today's prices. I would probably go to Disney less and spend my money elsewhere.

 

[Drewski77]

all of this! Except I did buy in much lower and I will keep my points but I would never consider buying at today's prices. I would probably go to Disney less and spend my money elsewhere.

So if you woke up tomorrow and didn’t have your DVC points, but you were given the cash to immediately buy them back at today’s prices...you wouldn’t???

 

[Sandisw]

Good points and detailed analysis, and makes sense for the value you put on the blue card which I have as well.

My guess (maybe wrong) is if today you didn’t own SSR, but had the exact funds to buy with a blue card you would, because it is worth it to you.

I would as well. I own SSR and I’m not selling (even if we netted the amount to buy back in) and many DVC owners think the same.

This limits supply of resale, and many don’t value the blue card as highly, and thus resale goes up. And as direct SSR has strong sales, direct prices will increase and bring resale up as well.

The only difference between our views is I don’t think resale is overvalued. In fact, even above $110 for SSR (it’s already above this) I still don’t think it’s overvalued.

For now the resale market would agree that prices aren’t overvalued, but that can certainly change.

I think it all depends on resort. I think BCV is way over valued in the resale market and BWV is a close second.

I don’t think SSR, OKW, AKV or BRV are at all. All other resorts I think it depends because too many factors to determine it

For me, value is in the use and that outweighs today’s market vs what I bought in at. I suspect that’s for many.

People who may have bought years ago for every other year trips, etc may not see resale as a value for that type travel now because cash stays may be much closer than before.

Resale price is impacted by supply, demand, ROfR, and individual needs.

So, I’m not sure I can say that it will rise because of a supply issue alone

 

[Drewski77]

I think it all depends on resort. I think BCV is way over values in the resale market abs BWV is a close second.

I don’t think SSR, OKW, AKV or BRV are at all. All other resorts I think it depends because too many factors to determine it

For me, value is in the use and that outweighs today’s market vs what I bought in at. I suspect that’s for many.

People who may have bought years ago for every other year trips, etc may not see resale as a value for that type travel now because cash stays may be much closer than before.

Resale price is impacted by supply, demand, ROfR, and individual needs.

So, I’m not sure I can say that it will rise because of a supply issue alone

All great points, and definitely supply is only one half of the equation.

 

[CaoilinnsMom]

So if you woke up tomorrow and didn’t have your DVC points, but you were given the cash to immediately buy them back at today’s prices...you wouldn’t???

That is an interesting question...I don't know. I don't feel an overwhelming "Yes!!" reaction. Maybe? But maybe not... Can I still have the cash and use it for something else? I guess what you are describing is me selling them, I don't plan to do that. Resale point replacement would not be a 1 for 1, since I bought resale long enough ago that I have a Blue card. I like having my points, and don't mind the current annual dues, but am not sure they are worth buying all over again.

 

[Drewski77]

That is an interesting question...I don't know. I don't feel an overwhelming "Yes!!" reaction. Maybe? But maybe not... Can I still have the cash and use it for something else?

Sure, you can keep the cash or buy back your points.

In a sense this is what all us owners have as a choice with either selling and taking the cash, or continuing to keep our points.

My guess is you’d buy back your points, it’s what I would do. Now, if my contracts went up a 100%+ from here, maybe I’d do something different

 

[Bjaiken77]

I still think resorts like POLY and CCV are great values to buy resale. You look at the difference between resale and direct, and there is still a pretty large margin. Also, there is a lot of time left on those resorts. You can kind of argue the same for BLT, as it’s super pricey direct. However, those recent price jumps, and a little lower time left on the contract, make it a little harder to swallow.

 

[sethschroeder]

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.

Except if its over priced couldn't you just go with whats not overpriced? Unless your argument is that DVC is the least of all overpriced things for Disney.

 

[sethschroeder]

DVC is an asset that has value. You not selling is the same as if you took cash from your account and purchased a contract. Yes there is a small 8% cost difference based on the seller fees but thats the difference.

Its just many people are emotionally attached to their DVC points which is fine but its also why people are buying in to DVC even as you say "you would never buy in at todays prices". You are saying that because you already own DVC.

 

[ParkHoppers]

I think demand will only increase from today as millennials and Gen Z are all in on Disney. They will make up a lot of buyers in the near future. We shall see.

 

[Drewski77]

DVC is an asset that has value. You not selling is the same as if you took cash from your account and purchased a contract. Yes there is a small 8% cost difference based on the seller fees but thats the difference.

Its just many people are emotionally attached to their DVC points which is fine but its also why people are buying in to DVC even as you say "you would never buy in at todays prices". You are saying that because you already own DVC.

Very well said, much better than I’ve done. You articulated my original point:

Not selling today is the same as buying at today’s prices.

A person’s original buy-in price is immaterial to whether or not it is still a good value to buy, hold, or sell.

For me, I’m a current owner who thinks resale isn’t overvalued and I would buy at today’s prices, and therefore I’m not selling my contracts.

 

[upritbass]

I believe that the true value of a DVC contract is whatever someone is willing to pay for it.

Yes, that is the definition of 'value' whether some like it or not.

Latest case in point: several VGC small contracts just went for $295/pt within hours of listing and the one and only VGC listing available at the moment is 300 points @ $300/pt!!! We shall see...

 

[MomOTwins]

I think DVC resale at certain resorts is overpriced today because I was planning to buy resale and instead bought direct.

We knew we wanted to buy 150 points. We liked Riviera but also liked Poly and were looking into resale if it would be a cost savings. Direct price we ended up paying was $195 per point. When we first started looking Poly was running around $150 per point on the resale market, so a little under $7,000 cheaper than RIV, which was pretty substantial but not cheap by any means. By end of April, the prices were more like $170-175 per point for Pol resale. So when it came down to it, we were looking at premium of $3,000 to $4000 for direct versus resale. That became a much tougher sell. Blue card benefits alone would add up to a decent chunk of that over time with discounts. And with resale, we faced the hassle of the long closing, during which time prices might only go up on both direct and resale and land us in a worse spot if we didn't pass ROFR. as well the downside that many contracts we were seeing did not have not have any points coming for a long time. Plus, it was a big issue to us that we wouldn't even be able to stay at RIV if we bought resale versus being able to stay at both if we bought direct.

That's just one person's story. I know the price "gap" looks larger if you compare Poly direct to Poly resale--but for people like us that think RIV is just as good, buying direct at Poly had no benefit over buying at Riv.

In other words, I think that resale at some resorts may be over priced to the extent that it steers people to buying direct at a different resort. That just removes buyers from the resale market, which is not a good thing for sellers.

 

[Drewski77]

Yes, that is the definition of 'value' whether some like it or not.

Latest case in point: several VGC small contracts just went for $295/pt within hours of listing and the one and only VGC listing available at the moment is 300 points @ $300/pt!!! We shall see...

Just not any supply for VGC, and even at these prices I’m not selling, obviously similar to most owners.

I only wish I had bought more!