How to price a DVC Resale

[skip64]

I am a happy owner at BCV and I hope never to sell my points. However, I also have had training as an economist and I like to track the value of my asset. For this reason, I occasionally visit the DVC resale page on this site. With recent visits in mind, I want to offer some advice for those who own at BCV and are thinking about selling.

My advice is to set your prices higher. You will be better off if you do and so will the people who put their points on the market after you. The evidence that you will be better off is to look at the resale list now. When Beach Club listings appear, they are snatched from the list almost instantly. From an economists' point of view, the reason why this happens is that the points are priced too low. BCV is a very desirable property and the quick sales mean that there are a large number of people willing to buy. While BCV points are selling in the $75-77 range, I would bet that points would be snatched up nearly as fast at $80 per point or more. For those of you thinking about selling, there is no reason not to at least try a higher price since you can always decrease the asking price at a later date. And if this sounds risky, I should add that it is not as if people are suddenly going to lost interest in BCV.

One objection to this idea is that if the spread in price between BCV and other properties, such as OKW, gets too large then people will just buy the other properties. But if you have tried to make a reservation at busy times, you know just how valuable the 11 month window of your home resort can be.

Working against the idea that the market will not sustain higher prices for resorts such as BCV is what realtors call "location, location, location." When I bought my BCV points from Disney it was at the beginning of the SSR-presale when SSR points were available at a much lower price. No offense to SSR, but I was willing to pay extra to be within walking distance of Epcot and the rest. The fact that even today BCV and BWV points sell for more than OKW points, and that WDW points sell for more than VB or HH should tell you all you need to know about peoples willingness to pay extra for location.

I love my VH and I can never imagine selling, but if you have decided you might as well make the most of it. If you live in a desirable place first set the price you want, not simply the price that others are setting.

 

[LIFERBABE]

Although BCV contracts are very desirable, DVC sells these contracts for $84 ppt and pays the closing.

There may be some that are willing to pay $100 ppt for a stripped resale, but most buyers are knowledgeable and before I do that, I will go on the waitlist for more points thru DVC.

Many of the purchasers of resales are already members that have options.

It is a good point, but those willing to pay more for a resale contract than purchase from disney will be a small minority. Most people are selling because they have to and need the money as soon as possible. Increasing the price may delay the sale.

 

[Deep-Thots]

Liferbabe is right on the money.

With Disney selling all non-SSR resales at $84 per point, the non-Disney resale market really cannot raise prices beyond, say $80.50 per point (at non-SSR resorts) , due primarily to closing costs.

Please note that I came up with this price assuming a resale of 150 points. With such a contract (for which the closing costs would be $500), the final amount per point will be just a tad under $84 per point.

Of course, you might, depending on the size of the contract, be able to find a relatively good deal here or there. Still, though, as long as DVD is selling non-SSR resales at $84 per point, most BCV and BWV owners will probably have to offer their resales at slightly less than that amount. What's more, unless something really magical happens, the prices are likely to decline as the deed expiration time nears.

 

[CarolMN]

Originally posted by LIFERBABE
Although BCV contracts are very desirable, DVC sells these contracts for $84 ppt and pays the closing.

There may be some that are willing to pay $100 ppt for a stripped resale, but most buyers are knowledgeable and before I do that, I will go on the waitlist for more points thru DVC.

Many of the purchasers of resales are already members that have options.

It is a good point, but those willing to pay more for a resale contract than purchase from disney will be a small minority. Most people are selling because they have to and need the money as soon as possible. Increasing the price may delay the sale.

There might be a very long wait for BCV points from Disney - especially for those looking for a new contract of 150 points or more.

I agree that there is a ceiling or "cap" on the price one could ask for BCV (or BWV) points on the resale market, but I also think that skip64 is correct in saying that the current price could easily be increased. JMHO.

 

[randy55]

I asked my guide last week about add-on points at BCV and she said that they are very hard to come by, so be ready for a long wait.

So it might be a matter of if you want to wait or if you want the points now. If I was selling my BCV points right now I would definitely start at the $84 Disney price with all points being available the next use year. I bet they would sell within 2 weeks.

If you have the location, and the demand is high, then you can get a premium price.

Of course I am not about to sell my BCV points, until the price gets above $90.

 

[JimC]

Disney's $84 including closing costs is valid as a ceiling only if they have points to sell. That may not be the case.

In my view it is the price per point for all points acquired over the term of the contract that is important. That way contracts are adjusted for banked or borrowed points. The market appears efficient because prices appear to settle within a very narrow range when viewed in this way (admittedly using very small samples). Looking at it that way yields:

SSR
08/04/03 $1.58 per point at $79
11/01/03 $1.68 per point at $84
03/05/04 $1.78 per point at $89
05/09/04 $1.90 per point at $95

BCV through Disney
08/04/03 $2.15 per point at $84
11/01/03 $2.15 per point at $84
03/05/04 $2.21 per point at $84
05/09/04 $2.21 per point at $84

BCV resale with closing costs
08/03 - 5/04 $1.92 to 2.11 per point based on various contracts and months

This might suggest that the market could go higher.

 

[skelooch]

I don't see why it makes a difference what DVC is selling points for especially sincethey don't have anything to sell. They could be giving points away but they don't have any to give away, so it really doesn't matter.

The right selling price for anything is "whatever the traffic will bear". And if DVC wants the points bad enough then they'll have to pay the going price too. At which point they will have to change their selling price. It's a vicious circle all about supply and demand.

I assume the current price of $84 (if that's what it is)is probabally the last selling price when the units sold out, why should it be anymore.

 

[ripleysmom]

Wow a new spin on "let's raise the rent". Sounds to me like someone is getting tired of their investment.

 

[Deep-Thots]

Originally posted by ripleysmom
Wow a new spin on "let's raise the rent". Sounds to me like someone is getting tired of their investment.

Hmmm. Good point, ripleysmom!! I hadn't thought about troll possibilities... but then I'm very, very tired....




TTFN

 

[JimC]

Originally posted by ripleysmom
Wow a new spin on "let's raise the rent". Sounds to me like someone is getting tired of their investment.

I think the OP was simply thinking through the issues surrounding pricing -- something an economist would enjoy and be pretty good at. I did not sense a desire to sell.

 

[ripleysmom]

Well someone must be looking to sell although the OP clearly states that he isn't.

I wonder why though he would tell BCV owners to raise their prices? Why specifically BCV, why not address BWV as well? After all it is more valuable in terms of points savings and proximity to Epcot is it not?

Sorry but when I see stuff like this "ulterior motive" typically comes to mind.

Usually when we see "rally round and raise the rent" posts it is because someone wants more rent. Seems to me that a "rally round and raise your selling price" means that someone wants more money when they sell their investment.

 

[JimC]

Clearly people are looking to sell, otherwise we would not have a sponsor for our Boards

I think he used BCV because he owns there and that is the resort he tracks on the resale market. Maybe I am too trusting. I just took his post at face value.

I believe that BCV is actually closer to Epcot than BWV. While BWV is closer to MGM. But his point was that any resort in that location is within an easy walk to two of the theme parks and plenty of other activities. Compared to most other resorts on property, I believe he has a valid point regarding location.

Again, it may be that I should be more skeptical.

 

[Wish I lived in Fl]

Saving my money now so i can buy a DVC timeshare in a couple years when prices have dropped 1/3 to 1/2 . Think we have started a major recession which will affect Timeshares even more than homes.

The housing market has started stalling on Cape Cod with houses for sale for months rather than days. Market goes down more than rest of state because so many homesales are retirement and second homes.

Even when Timeshares drop i won't buy too many points to make sure we can afford the maintenance and transportation to Florida costs each year.

Husbands job is facing a 50% paycut for this Spring. Just hope he'll have a job. Four members of my family are unemployed who never had trouble in the past getting good jobs.

 

[skip64]

Just to be clear, there no way I'm selling. If anything I might buy some additional points for family members at some point. My comments are a result of my background and interests -- I like tracking prices for recreational purposes. I am also very impressed by almost all of the subsequent posts.

DVC Forever! (or at least the next 39 years)

 

[rinkwide]

Originally posted by Wish I lived in Fl
Saving my money now so i can buy a DVC timeshare in a couple years when prices have dropped 1/3 to 1/2. Think we have started a major recession which will affect Timeshares even more than homes...

Husbands job is facing a 50% paycut for this Spring. Just hope he'll have a job.

Sorry, but I can't see the above situation ending up in anything other than huge disappointment.

As for pricing; My seller was asking $77 for his loaded BCV contract but jumped at my offer of $69. Go figure.

 

[Deep-Thots]

Originally posted by Wish I lived in Fl
Saving my money now so i can buy a DVC timeshare in a couple years when prices have dropped 1/3 to 1/2 . Think we have started a major recession which will affect Timeshares even more than homes.

Husbands job is facing a 50% paycut for this Spring. Just hope he'll have a job. Four members of my family are unemployed who never had trouble in the past getting good jobs.

I'm very sorry to hear about your difficulties. However, I'd have to agree with rinkwide: DVD has managed to keep to keep the costs of a DVC membership stable (relative to the CPI, etc.) over the past 14 years. It is in their interest to do so, and I can't see them allowing the prices to fall through the floor. I think they'd stop building additional DVC resorts before they'd allow that to happen.

Just my $.02.

 

[JimC]

Actually the prices for DVC have risen 4.9% per year since DVC opened and the CPI only 2.5% per year for the same period. The points have increased just ahead of the hotel rates at moderates (4.8% over the same period).

 

[LIFERBABE]

I assume the current price of $84 (if that's what it is)is probabally the last selling price when the units sold out, why should it be anymore.

I can definitively say the price for sold out DVC's is $84 ppt. If you are willing to wait for a resale that meets your needs and pay a premium for it, then why wouldnt you be willing to wait for DVC?

Yes it is a matter of supply and demand, but there is more than one supplier. This competition keeps the prices stable and keeps the resellers and DVC in balance.

I personally am on the waitlists to add-on thru DVC, but I also check the resell sites frequently to see if I can find what I want there. Im not so desperate to add-on that I would pay more than what DVC would sell the points to me for. I think many are in this same situation.

Last week, I was able to add-on BWV thru DVC. I received all 2004 points, and pro-rated dues. It is the UY I wanted. I had not found what I wanted on the resale sites, so I went with DVC.

IMHO, when you are looking for a contract with current points, and a particular UY, you have just as much chance of DVC coming up with points, as finding what you need from a reseller.

If you just want to own points at one of the sold out DVC's, and have no prerequisites, then that is easier through resale.

If DVC stopped selling sold out resorts completely, then I could see the market setting the price.

P.S. I also don't think the OP was trolling. (But then again, Im from A2, Mi)

 

[Wish I lived in Fl]

-You're up and when you are down, you're down. And it is hard to think it will change.

When the Cape market was down we thought it would never come up. Then our house doubled in value in 3 years.

But last night at a bookclub meeting i was hearing stories of houses unsold for 10 months and a newly constructed home that had no one attend an Open House. These were beautiful homes in a lovely neighborhood. Homes we would have dreamed of owning before 9/11 but don't think we will ever be able to afford now.

I think we are going back to 'Stagflation' if anybody remembers the late '70s , early '80s. 16 % interest rates, negative equity etc.

So anyway, I am saving my money and will buy what we can afford 3 years from now. And it will be BCV for Epcot and SAB, (that's why i have been tracking BCV offering prices). It will probably be a studio forever! But i would rather own a studio DVC than a 2 Bedroom any other brand so i must have the Disney madness.

 

[Samsara]