Here’s Why Resale Has Plenty of Room to Rise

[fumanchu2488]

Prices of DVC resale, and direct to a certain extent, will be nearly directly related to that of cash reservations. If cash rates drop at deluxe resorts then there is no reason to purchase years of points with maintenance fees when you can just book cash rooms. Especially if those cash stays come with packages and discounts DVC cannot offer (I.e. dining plan).

As far as “value” it is an incredibly difficult question to answer. My thought is value is tied to what you are willing to pay for your accommodation. Right now, we compare to deluxe resorts. So, if you weren’t DVC would you pay $700/ night to stay in VGF or RIV studio? Would you pay $500/night to stay in SSR studio? My answer is no. If you roughly say my points cost me about $14 per point for the life of the contract, my stay at RIV costs me about $275/night for a studio. Do I think that is good value? Yes. In my eyes, if Disney were to drop cash rates at these resorts to $350 or $400/night and it came with some sort of package, then the better value in my eyes would be cash stays and my money not held by Disney.

So the question really is, will I value WDW vacations for 49 more years? If Disney continues to raise prices where even with my $275/ night room paid, it costs me $6,000 to take my family of 4 for a week, then the room loses all value to me.

 

[DL1WDW2]

How does nearby Condo /Timeshares affect all of this?
Apparently the market is expected to remain strong as Margaritaville expands and also Embassy Suites is building new timeshare resort... It seems Disney is taking the most conservative view by removing Reflections and announcing a safer VGF expansion in the marketplace.
So confusing to predict future. I fear maintenance dues and point charts as the most unpredictable aspect. Well we can foresee a future of increases!

 

[Drewski77]

The " COVID recession" did not hit the working population equally across the board like the recession in 2006 did. The COVID recession hit the people is the service industry incredibility hard ( think food service, tourism etc.) Most of these people wouldn't be owners of DVC so they would not be sellers in hard times either.

So who will the next recession hit and how do you know?

Again, if you are wanting points in the next 3-6 months to use for years of vacations, there is absolutely no guarantee prices will not be even higher.

 

[mustinjourney]

Same here many years ago. Never touched it again because of the responses from people who didn’t understand economic principles, but decided to get angry at the discussion. They wanted to argue their point from their emotional view. Many people also struggle with the fact that not making a decision is the same as making a decision. The fact is that status quo just doesn’t feel like a decision.

I've come to realize, particularly over the last 16 months, that there are two types of people in this world. Those that operate on emotion and those that operate on facts and data. And trying to appeal to the former using data and facts is generally useless.

 

[DonMacGregor]

Many people also struggle with the fact that not making a decision is the same as making a decision. The fact is that status quo just doesn’t feel like a decision.

To quote Neil Peart:

"You can choose a ready guide in some celestial voice
If you choose not to decide, you still have made a choice"

Nuff said...

 

[MomOTwins]

I've come to realize, particularly over the last 16 months, that there are two types of people in this world. Those that operate on emotion and those that operate on facts and data. And trying to appeal to the former using data and facts is generally useless.

I wouldn't go that far. Emotions ARE facts, and they are relevant to economic decision-making. I work for a financial services company, and our most successful financial advisors are the ones who try to understand what are clients value emotionally rather than just the objective "value" of their portfolio.

I recall one day we were at HS and the three kiddos saw the GIANT donut bear claws at the Joffrey's cart and their eyes lit up with these giant puppy-begging-mode looks and they started begging to have them, but they each want a different color icing. DH makes the (very fact/data driven) point that the donuts are crazy expensive, and our kids are tiny and are only going to eat about a quarter of the donut, and the icing is just different colors, not different flavors, so just buy one and make them share. The kids started pleading no no, they each want one in their favorite color, PLEASE. I told my husband I agreed with all the points he was making, but the kids are on vacation, and why not let them have a little happiness. The kids each eat about a third of theirs as DH predicted, but they were on cloud 9 and I got some adorable pictures of them eating donuts as big as their heads.

 

[Drewski77]

I've come to realize, particularly over the last 16 months, that there are two types of people in this world. Those that operate on emotion and those that operate on facts and data. And trying to appeal to the former using data and facts is generally useless.

And the biggest issues arise with those who are unable to differentiate between what is emotional and what is factual.

No problem if someone wants to base a decision more on emotion…but don’t confuse that as fact based.

Factually the amount of equity tied up with DVC is based its current value, and is the same as today’s resale purchaser…emotionally it is what someone originally paid.

 

[Bearval]

To quote Neil Peart:

"You can choose a ready guide in some celestial voice
If you choose not to decide, you still have made a choice"

Nuff said...

Never argue with an idiot, they wear you down and beat you with their experience.

Alice Cooper

 

[DonMacGregor]

Never argue with an idiot, they wear you down and beat you with their experience.

Alice Cooper

They truly are the modern poets...

 

[mustinjourney]

I wouldn't go that far. Emotions ARE facts, and they are relevant to economic decision-making. I work for a financial services company, and our most successful financial advisors are the ones who try to understand what are clients value emotionally rather than just the objective "value" of their portfolio.

I recall one day we were at HS and the three kiddos saw the GIANT donut bear claws at the Joffrey's cart and their eyes lit up with these giant puppy-begging-mode looks and they started begging to have them, but they each want a different color icing. DH makes the (very fact/data driven) point that the donuts are crazy expensive, and our kids are tiny and are only going to eat about a quarter of the donut, and the icing is just different colors, not different flavors, so just buy one and make them share. The kids started pleading no no, they each want one in their favorite color, PLEASE. I told my husband I agreed with all the points he was making, but the kids are on vacation, and why not let them have a little happiness. The kids each eat about a third of theirs as DH predicted, but they were on cloud 9 and I got some adorable pictures of them eating donuts as big as their heads.

While I agree my initial statement is certainly an overgeneralization (certainly most people do not operate only on emotion or only on facts) -- but I have to respectfully disagree that emotions are facts.

Emotions are responses to facts.

With respect to your example -- you can clearly put a value on your emotional well being -- and that is perfectly logical. I'm certainly guilty of assigning non-sensical values to emotional experiences -- which is a major reason as to why I joined DVC in the first place.

 

[MomOTwins]

While I agree my initial statement is certainly an overgeneralization (certainly most people do not operate only on emotion or only on facts) -- but I have to respectfully disagree that emotions are facts.

Emotions are responses to facts.

With respect to your example -- you can clearly put a value on your emotional well being -- and that is perfectly logical. I'm certainly guilty of assigning non-sensical values to emotional experiences -- which is a major reason as to why I joined DVC in the first place.

True, but there is also a lot of "fuzzy math" in how you ascribe value to facts other than emotions, and that's why I tend to view emotions as a fact at least for economic purposes. So to the original question, we're trying to decide whether if you think DVC is overvalued now, you should keep an existing contract or sell at today's prices and pay out of pocket for vacations now and eventually buy back into DVC later when the resale bubble bursts. What is the "value" of keeping grandfathered in blue card benefits or the ability to use pre-2018 points at Riviera? Of keeping a particular use year? Of avoiding the time-consuming process of bidding on a new contract, waiting for ROFR to pass, and points to arrive (which takes months at best, potentially years if contract is stripped)? All of those are facts, but how much value to place on them is pretty hard to quantify and is going to vary a lot person to person. I guess that's what I'm trying to say--when you're trying to calculate the value, putting a value on emotional aspects may be fuzzy, but putting a value on facts can be fuzzy too.

 

[Drewski77]

True, but there is also a lot of "fuzzy math" in how you ascribe value to facts other than emotions, and that's why I tend to view emotions as a fact at least for economic purposes. So to the original question, we're trying to decide whether if you think DVC is overvalued now, you should keep an existing contract or sell at today's prices and pay out of pocket for vacations now and eventually buy back into DVC later when the resale bubble bursts. What is the "value" of keeping grandfathered in blue card benefits or the ability to use pre-2018 points at Riviera? Of keeping a particular use year? Of avoiding the time-consuming process of bidding on a new contract, waiting for ROFR to pass, and points to arrive (which takes months at best, potentially years if contract is stripped)? All of those are facts, but how much value to place on them is pretty hard to quantify and is going to vary a lot person to person. I guess that's what I'm trying to say--when you're trying to calculate the value, putting a value on emotional aspects may be fuzzy, but putting a value on facts can be fuzzy too.

Good points and certainly a lot of factors to consider.

My main idea has been that by not selling you are in essence buying at today’s prices…which is totally fine, but counter to what many current owners will say.

My guess is if you woke up tomorrow and didn’t have your DVC contracts…but were given the funds to immediately (no hassles) buy back at today’s prices you would…which is the same result as not selling.

I would do the same and many others as well, hence supply is constrained and values are continuing to increase.

 

[Lorana]

Factually the amount of equity tied up with DVC is based its current value, and is the same as today’s resale purchaser…emotionally it is what someone originally paid.

My main idea has been that by not selling you are in essence buying at today’s prices…which is totally fine, but counter to what many current owners will say.

The current market value of my contracts is not really the same thing as buying in at today's prices, however, and I think it's that factual point that current owners are disagreeing with - especially when you are argue that not selling is an implicit willingness to buy at today's prices (willingness to spend capital at today's prices is not in fact the same thing as the equity of the current asset). Because the amount of capital I used to purchase my contracts (and thus my initial equity) is not equal to today's market value/equity value, and while I'm not willing to sell, it has nothing to do with "in essence buying at today's prices" (or at least being willing to) so much as the contract has value beyond it's market price -- I use those points for vacations, and to rent out when I am not using them, and I lose that value if I sell.

 

[DVCanadian]

Good points and certainly a lot of factors to consider.

My main idea has been that by not selling you are in essence buying at today’s prices…which is totally fine, but counter to what many current owners will say.

My guess is if you woke up tomorrow and didn’t have your DVC contracts…but were given the funds to immediately (no hassles) buy back at today’s prices you would…which is the same result as not selling.

I would do the same and many others as well, hence supply is constrained and values are continuing to increase.

You can keep repeating this but it doesn’t make it true.
My contracts are worth double what I paid, I wouldn’t buy back in because 10 years have elapsed and things are different now. I’d take that 60k and run…and I’d rent points if I wanted to stay DVC.

I also wouldn’t sell now due to capital gains taxes and I still want to use the product. The 30k I spent is long gone. The value of the contract is only relevant when I go to sell.

While not making a decision is equivalent to making a decision, not selling isn’t the same as buying at today’s prices, there are too many other variables.

You can call people who don’t agree with emotional if you want but things are rarely as simple as the false equivalency examples you are using for your theory.

 

[Bearval]

You can keep repeating this but it doesn’t make it true.
My contracts are worth double what I paid, I wouldn’t buy back in because 10 years have elapsed and things are different now. I’d take that 60k and run…and I’d rent points if I wanted to stay DVC.

I also wouldn’t sell now due to capital gains taxes and I still want to use the product. The 30k I spent is long gone. The value of the contract is only relevant when I go to sell.

While not making a decision is equivalent to making a decision, not selling isn’t the same as buying at today’s prices, there are too many other variables.

You can call people who don’t agree with emotional if you want but things are rarely as simple as the false equivalency examples you are using for your theory.

I think we all have been "Rick Rolled" in this thread.

 

[smisale]

i must be missing something because it very plain to me. If someone bought in early 2020 and got great deal on DVC and now that same person looks at todays prices and said to them self im glad i bought when i bought because i could not buy in at todays price make sense to me. i bought AKL for 85 per point for 185 pts but today the want 127 per point i would have to finance it which even cost more.I would not sell it because i would not be able to use it at a great savings.Some people get lucky and get a great deal some hold off thinking the price will drop or wait too long and dont buy in AT TODAYS PRICE

 

[Drewski77]

The current market value of my contracts is not really the same thing as buying in at today's prices, however, and I think it's that factual point that current owners are disagreeing with - especially when you are argue that not selling is an implicit willingness to buy at today's prices (willingness to spend capital at today's prices is not in fact the same thing as the equity of the current asset). Because the amount of capital I used to purchase my contracts (and thus my initial equity) is not equal to today's market value/equity value, and while I'm not willing to sell, it has nothing to do with "in essence buying at today's prices" (or at least being willing to) so much as the contract has value beyond it's market price -- I use those points for vacations, and to rent out when I am not using them, and I lose that value if I sell.

It is so strange to me the visceral reaction of some DVC owners who are not selling, yet feel DVC resale is way overvalued.

Apparently DVC is great enough to keep the same equity tied up as a resale buyer does today…but don’t try to say I would buy today as that is just so illogical

 

[Drewski77]

You can keep repeating this but it doesn’t make it true.
My contracts are worth double what I paid, I wouldn’t buy back in because 10 years have elapsed and things are different now. I’d take that 60k and run…and I’d rent points if I wanted to stay DVC.

I also wouldn’t sell now due to capital gains taxes and I still want to use the product. The 30k I spent is long gone. The value of the contract is only relevant when I go to sell.

While not making a decision is equivalent to making a decision, not selling isn’t the same as buying at today’s prices, there are too many other variables.

You can call people who don’t agree with emotional if you want but things are rarely as simple as the false equivalency examples you are using for your theory.

I believe someone else brought up emotion, and I certainly didn’t call anyone who disagrees with me by definition emotional.

You do seem rather upset though, and the only thing I really disagree with is how some profess DVC to be hugely overvalued, yet happily keep today’s far greater equity tied up in it.

I happily keep my far greater equity tied up in DVC, I would also buy in today, and I don’t think it’s overvalued…which is why I don’t sell.

Not all that different than you, just a bit more consistent in my opinion.

 

[Drewski77]

i must be missing something because it very plain to me. If someone bought in early 2020 and got great deal on DVC and now that same person looks at todays prices and said to them self im glad i bought when i bought because i could not buy in at todays price make sense to me. i bought AKL for 85 per point for 185 pts but today the want 127 per point i would have to finance it which even cost more.I would not sell it because i would not be able to use it at a great savings.Some people get lucky and get a great deal some hold off thinking the price will drop or wait too long and dont buy in AT TODAYS PRICE

I do see what you are saying…but yes, you are missing a lot of the idea.

No worries, but I’ve spent far too much time on this as it is.

What we both agree with is DVC works great for us, and we are not selling.

 

[smisale]

yes and that what makes this board so valuable that everyone can voice there opinion. whos to say right or wrong its a discussion with different points of views and who knows maybe we learn something