Housing slump affecting DVC sales?

[AllieV]

I started this thread a few years ago and am wondering if anyone has a different POV now that it's been a while. Have you seen the housing crisis affect the purchase and price of DVC? I know their newer resale rules affected it some, but otherwise, what do you think? Disney's selling prices are still high, but I'm curious how their overall sales numbers are now vs 5 or 6 years ago. They also aren't buying back as many, it seems.

 

[dmoore22]

I started this thread a few years ago and am wondering if anyone has a different POV now that it's been a while. Have you seen the housing crisis affect the purchase and price of DVC? I know their newer resale rules affected it some, but otherwise, what do you think?

I have some shares of Disney in my portfolio. They always paint a rosy picture in the yearly shareholder reports hence it may be difficult to get a true picture. Most articles I've read recently talk about the Orlando Timeshare and vacation home market being saturated. The recommendation is against such a purchase in terms of an investment. The so-called experts do not expect the market to bounce back anytime soon. We purchased a resale almost 10 years ago and thought we got a fantastic deal. Now we are seeing resales going for the same price as what we spent for ours 10 years ago. In viewing bank owned and shortsale prices we could pick up a condo in a gated community for less than 375 points at our home resort. Yet we see DVC expanding and the relatively recent announcement of Disney Golden Oak Subdivision of multi-million dollar homes may suggest that they are not trying to appeal to the struggling middle-class.

 

[AllieV]

the relatively recent announcement of Disney Golden Oak Subdivision of multi-million dollar homes may suggest that they are not trying to appeal to the struggling middle-class.

Oh that's interesting. Maybe Disney's survival mechanism in this uneasy sea is to shift to bigger fish. I, too, have Disney shares and they just keep going up ; but that doesn't tell me much about DVC.

 

[DVCconvert]

I started this thread a few years ago......

Wow!!
That must be "quite the ticker file" you have to suddenly revisit a thread from about 4 years ago!!



So, what were you doing on this day in 1983 at 11:37AM (EST)?

 

[tjkraz]

Back when you started thread in 2007, the price was around $90-95 per point. Now they are asking $140 for Bay Lake Tower. That pretty much says it all regarding pricing. If nothing else, my sense is that DVC will rely even more heavily on the impulse buyer, and that they are content to sell fewer points with a higher profit margin.

Direct prices did dip to some degree (in the form of added incentives) in the first half of 2009 due to the global recession. But even with today's talk of poor real estate markets and overbuilt timeshares, Disney continues to edge the price upward.

It's difficult to gauge anything in relation to Saratoga Springs because the resort was simply built too large in relation to demand. There are many owners who cherish it as a Home resort, but not enough to routinely fill the 900 villas DVC put there.

But Disney turned a profit on resorts like SSR and AKV long ago. They will continue to offer them as more economical options to buyers, while getting top dollar for destinations like Bay Lake Tower, Grand Floridian and (eventually) the Disneyland Hotel.

 

[AllieV]

Back when you started thread in 2007, the price was around $90-95 per point. Now they are asking $140 for Bay Lake Tower. That pretty much says it all regarding pricing.

Ah, good point (really $140? ). I guess there are still enough people out there with enough money to support Disney's DVC inventory. I guess there's more of a decrease in resale per point, then, at least more than I would have anticipated in the last 4 years ($80-ish to $50-ish).

I'd still be curious to see their actual sales numbers. Similar to a realtor, were they selling 5000 contracts a year and now it's more like 1000? Cost offset, though, like you said.

 

[DVCconvert]

I guess there's more of a decrease in resale per point, then, at least more than I would have anticipated in the last 4 years ($80-ish to $50-ish).

If you mean the recent sales prices of resales it's even more than that...sales have cleared ROFR in the $40's and in the $30's

 

[dmoore22]

Ah, good point (really $140? ). I guess there are still enough people out there with enough money to support Disney's DVC inventory. I guess there's more of a decrease in resale per point, then, at least more than I would have anticipated in the last 4 years ($80-ish to $50-ish).

I'd still be curious to see their actual sales numbers. Similar to a realtor, were they selling 5000 contracts a year and now it's more like 1000? Cost offset, though, like you said.

There is a certain irony. Yesterday I received an email from DVC stating the I had a limited time to buy BLT since it would be sold out soon. I decided to visit the TSS website and saw there were many BLT resales available, some for less than $100/pt.

 

[AllieV]

If you mean the recent sales prices of resales it's even more than that...sales have cleared ROFR in the $40's and in the $30's

Wow, I missed those. There's another thread talking about the new ROFR that Disney just starting doing in the last couple of days. I wonder if those are flukes (they'll only buy enough for their waitlist) or if we are seeing the end of cheap resale.

 

[tlaw66]

One thing to remember about resales now some of the ofering places can't be used by anyone who buys resale. All you get is Disney resorts non of the other perks ie cruise line. I was told by Jim that disney did this try and curtial the selling of used memberships. Also keep in mind when you buy used Disney has the final say so or they can buy it back themselfs.

 

[karana]

I agree with the above post- the recent rule changes that took effect this past March, have made the resale market less robust. Since then, I have received many more notices of resale opportunities than I did before that change. I am shocked to see the price drops that have occured, too. I don't understand though why the new limitations would really matter that much. Points for cruises are low value and RCI is a waste, no availability whenever I have needed it, and the Disney Collection is just not on most people's radar because it involves lots of other travel costs

 

[sweetdana]

I agree with the above post- the recent rule changes that took effect this past March, have made the resale market less robust. Since then, I have received many more notices of resale opportunities than I did before that change. I am shocked to see the price drops that have occured, too. I don't understand though why the new limitations would really matter that much. Points for cruises are low value and RCI is a waste, no availability whenever I have needed it, and the Disney Collection is just not on most people's radar because it involves lots of other travel costs

Because it could be all of it.. or the tip of the iceberg on changes to come. .. second class points. I would not spend 40$ more pp for direct, but I would probably spend just less than that just in case.

 

[JimMIA]

I don't think there's been any change in resale prices as a result of the policy changes in March, for several reasons:

1. The "benefits" removed were of minimal value, if any.
2. The "benefits" of direct purchase do not pass to new owners when the direct purchaser resells. This actually guarantees the direct purchaser a BIGGER LOSS than they would have had previously.
3. The "benefits" that remain available to direct purchasers are NOT guaranteed to them, and could be elminated at any time.
4. Resale prices have been on a sharp downward trajectory for several years, due both to the economy and Disney's near-abandonment of ROFR.

I don't think resale prices really dropped after 3/20. I think what happened is the pre-3/20 rush of people who wanted to get in before the change raised resale prices. After the deadline, they simply returned to where they were headed before the two-month buying frenzy.

 

[DebbieB]

Wow, I missed those. There's another thread talking about the new ROFR that Disney just starting doing in the last couple of days. I wonder if those are flukes (they'll only buy enough for their waitlist) or if we are seeing the end of cheap resale.

I think Disney is trying to start selling the older resorts to current members since the onsite resorts they have are close to sellout. I got an e-mail last month offering BWV points for $115 (still way too high). So I think they are looking at ROFR for some of the cheap deals to get points back.