Here’s Why Resale Has Plenty of Room to Rise

[Drewski77]

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.

 

[Grumpy by Birth]

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.

 

[Drewski77]

View attachment 576896

???

So if a current owner thinks resale is too expensive and not worth it, why doesn’t that same owner sell?

Same as a stock investor who says:

“Apple is way overpriced good thing I bought a long time ago...so I’ll just hold onto my shares.”

A person’s cost basis is immaterial to whether or not it makes sense to hold or sell.

 

[MICKIMINI]

Well, not all of us have been sitting on our points. We bought seven contracts additional contracts in the past 10 months and flipped two for a profit. All were bought at a great price. Profits went into more DVC LOL!

 

[Grumpy by Birth]

???

So if a current owner thinks resale is too expensive and not worth it, why doesn’t that same owner sell?

Same as a stock investor who says:

“Apple is way overpriced good thing I bought a long time ago...so I’ll just hold onto my shares.”

A person’s cost basis is immaterial to whether or not it makes sense to hold or sell.

DVC is not an investment in my portfolio. I'm USING it for my vacations. If I sell, then I no longer have those accommodations. Even if I make money on the sale because prices have risen since I bought, I will still have to use that money to secure accommodations for my future vacations.

 

[CastAStone]

Overall economic growth does three things in relation to DVC:

1. Increases demand (more people who want it can afford it)
2. Reduces supply (fewer people sell because they have to or can no longer afford annual WDW trips)
3. Increases fundamental value (the hotel prices you are saving off of)

These snowball off of each other. Prices are unlikely to fall so long as the economy is doing well.

If the economy turns, all three of these things will change in tandem and as contracts sit unsold, things will snowball the other way.

Either way, if I value a DVC resort at $150 a point and bought it for $90 10 years ago, if the price is now $145, it would be silly for me to sell it, but it would also be silly for me to buy it, I can probably getbetter value for my money else where. Even if it’s $165, by the time I pay a sales commission, have I improved anything?

Finally, I think you’re forgetting the most common reason people own DVC is not because it provides a value (that’s how they justify it), it’s because they wanted it, and they can afford it, but if the price is double, they can no longer afford it, but they still want it.

 

[Drewski77]

Overall economic growth does three things in relation to DVC:

1. Increases demand (more people who want it can afford it)
2. Reduces supply (fewer people sell because they have to or can no longer afford annual WDW trips)
3. Increases fundamental value (the hotel prices you are saving off of)

These snowball off of each other. Prices are unlikely to fall so long as the economy is doing well.

If the economy turns, all three of these things will change in tandem and as contracts sit unsold, things will snowball the other way.

Either way, if I value a DVC resort at $150 a point and bought it for $90 10 years ago, if the price is now $145, it would be silly for me to sell it, but it would also be silly for me to buy it, I can probably getbetter value for my money else where. Even if it’s $165, by the time I pay a sales commission, have I improved anything?

Finally, I think you’re forgetting the most common reason people own DVC is not because it provides a value (that’s how they justify it), it’s because they wanted it, and they can afford it, but if the price is double, they can no longer afford it, but they still want it.

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?

 

[Drewski77]

DVC is not an investment in my portfolio. I'm USING it for my vacations. If I sell, then I no longer have those accommodations. Even if I make money on the sale because prices have risen since I bought, I will still have to use that money to secure accommodations for my future vacations.

What if someone offered you $500 per point but you couldn’t buy back in, would you sell?

 

[CastAStone]

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?

If someone offered me a ridiculous amount more than I valued a contract I owned at of course I would sell it to them. If someone offered me slightly more I wouldn’t bother. I certainly wouldn’t pay $5K for a Hyundai Elantra with 100k miles on it but I have one of those and that’s what I could sell it for. But if I sold it I wouldn’t have a car. I’ll stick with what I have for now.

if somebody offered me $20,000 for it tomorrow, yeah I’d sell and I’d make do without a car for a couple weeks until I got a new one. That’s the equivalent of your $500 question.

 

[Drewski77]

If someone offered me a ridiculous amount more than I valued a contract I owned at of course I would sell it to them. If someone offered me slightly more I wouldn’t bother. I certainly wouldn’t pay $5K for a Hyundai Elantra with 100k miles on it but I have one of those and that’s what I could sell it for. But if I sold it I wouldn’t have a car. I’ll stick with what I have for now.

if somebody offered me $20,000 for it tomorrow, yeah I’d sell and I’d make do without a car for a couple weeks until I got a new one. That’s the equivalent of your $500 question.

And you’ve helped make my point:

There is a price that a meaningful amount of DVC owners would begin to sell and use the cash for other accommodations...maybe even at Disney.

As you’ve said, the price isn’t there yet for you, me as well, and until that price is hit we will see resale prices rise.

And the car example is a bit different as generally we need a car, we don’t need a timeshare, and you can book basically the same rooms at cash with Disney after selling.

 

[biochemgirl]

As long as there is a significant enough gap between direct pricing and resale, there will be a market for resale.

 

[Drewski77]

As long as there is a significant enough gap between direct pricing and resale, there will be a market for resale.

Agreed, and Disney can raise direct prices as resale moves up.

 

[HappyDisneyWife]

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’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.

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.

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

Either way, if I value a DVC resort at $150 a point and bought it for $90 10 years ago, if the price is now $145, it would be silly for me to sell it, but it would also be silly for me to buy it, I can probably getbetter value for my money else where.

Amen. Very silly.

What if someone offered you $500 per point but you couldn’t buy back in, would you sell?

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!!!

But if I sold it I wouldn’t have a car.

Exactly.

And the car example is a bit different as generally we need a car, we don’t need a timeshare, and you can book basically the same rooms at cash with Disney after selling.

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.

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

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!!

 

[Drewski77]

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!!

Not sure why such a contentious response to my post, I mean absolutely no disrespect.

I too am a fellow DVC owner who finds great value and enjoyment with it, nor am I looking to sell.

My point, which ironically you’ve helped me make, is simply this:

Even at today’s elevated prices many DVC owners who scoff at current prices still will not sell...thus, rising prices continue.

 

[Bing Showei]

And you’ve helped make my point:

There is a price that a meaningful amount of DVC owners would begin to sell and use the cash for other accommodations...maybe even at Disney.

As you’ve said, the price isn’t there yet for you, me as well, and until that price is hit we will see resale prices rise.

And the car example is a bit different as generally we need a car, we don’t need a timeshare, and you can book basically the same rooms at cash with Disney after selling.

Another flaw in the stock comparison is that for a lot of current owners (most) the product you sell today, bought for much cheaper years ago, is no longer one you can buy back. Buying in today is a different product than what you are holding/selling.

An SSR owner who bought 11 years ago at the nadir of the market dip got $40 points that can be used anywhere and qualify them for every blue card benefit, would need to value those points much differently as an owner than what the market would value those points in the secondary market. That product is irreplaceable.

Equities can be bought and sold irrespective of time (beyond long term vas short term gains) and are fundamentally the same asset. Disney started changing the resale product 10 years ago, and all indications are they’ll continue to do so.

So “I own DVC but wouldn’t buy at today’s prices because it doesn’t provide enough value...but I’m not selling.” is not as devoid as logic as you seem to believe.

 

[Drewski77]

Another flaw in the stock comparison is that for a lot of current owners (most) the product you sell today, bought for much cheaper years ago, is no longer one you can buy back. Buying in today is a different product than what you are holding/selling.

An SSR owner who bought 11 years ago at the nadir of the market dip got $40 points that can be used anywhere and qualify them for every blue card benefit, would need to value those points much differently as an owner than what the market would value those points in the secondary market. That product is irreplaceable.

Equities can be bought and sold irrespective of time (beyond long term vas short term gains) and are fundamentally the same asset. Disney started changing the resale product 10 years ago, and all indications are they’ll continue to do so.

So “I own DVC but wouldn’t buy at today’s prices because it doesn’t provide enough value...but I’m not selling.” is not as devoid as logic as you seem to believe.

Good point, if someone offered you $1,000 per point (and you can’t buy back in ) it would make total sense to turn it down to get 20% off Disney meals and merchandise.

And you’re right, you couldn’t just take the pile of cash and book the same resorts directly through Disney or renting AND have a lot left over to get those “amazing” blue card discounts.

I won’t go so far as to say your position is devoid of logic...but some might.

 

[HappyDisneyWife]

Not sure why such a contentious response to my post, I mean absolutely no disrespect.

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

I too am a fellow DVC owner who finds great value and enjoyment with it, nor am I looking to sell.

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

My point, which ironically you’ve helped me make, is simply this:

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.

Even at today’s elevated prices many DVC owners who scoff at current prices still will not sell...thus, rising prices continue.

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-

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

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.

 

[Bing Showei]

Good point, if someone offered you $1,000 per point (and you can’t buy back in ) it would make total sense to turn it down to get 20% off Disney meals and merchandise.

And you’re right, you couldn’t just take the pile of cash and book the same resorts directly through Disney or renting AND have a lot left over to get those “amazing” blue card discounts.

I won’t go so far as to say your position is devoid of logic...but some might.

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:

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

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.

 

[supersnoop]

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.

 

[Drewski77]

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.

Trying to help with not missing the forest through the trees, not moving goal posts.

My point is, and I used an exaggeration to prove it:

There would be a price that would get more DVC owners to sell that previously wouldn’t have considered it, but we are not there yet so we have rising prices.