I mean at this point, why is anyone buying direct?

[tjkraz]

I have a whole lot of DVC, and I also have APs. But there are plenty of people who missed the window and aren't happy about it. And Disney has made a whole lot of controversial post-Covid decisions.

Of course those things are tied to the massive amount of contracts for sale. I'm not angry, I think I'm just stating the obvious.

Yes, of course those things are factors. But there are also a dozen other factors you aren't mentioning. Things like the economy, interest rates, selling one resort to buy another, buyers waiting for the VDH and Poly2 situations to be clearer, the fact that resale listings always balloon around the start of the year, and so on.

If people bought 6 months ago, stripped, and are flipping now at current prices…. They are likely not making much if any profit. They may even be taking a loss. Stripping and flipping was always a really bad long-term investment strategy because you get caught holding a hot potato if there’s an economic downturn.

That's kind of my point. I would hypothesize that some volume of resale contracts sitting out there now are flips which the owner is unwilling to let go beyond a certain price. That people who know the market are more likely to rent points for $20+ per year while they wait for the resale market to rebound, rather than dramatically lowering their asking prices.

I’ve heard that average DVC ownership is 7 years. I don’t know how true that is but sounds reasonable.

It is absolutely not true. I posted some actual numbers in the link below. Less than 3% of all points change hands each year. That's not an average ownership of 7 years.

https://www.disboards.com/threads/i...ne-buying-direct.3905240/page-7#post-64517288

 

[davidhr]

My guess is that 7 year average that keeps being mentioned is for those contracts that hit the resale market. Which is a small % of all DVC contracts.

 

[DonMacGregor]

I’m not defending Disney, nor am I justifying. I don’t need to. I am satisfied by my DVC purchases every time we stay at at DVC resort, which is every couple of months. My mention of the heated/unheated Aulani pools was to show that not everyone hates the colder pools. Some love it, especially under a hot Hawaii sun. I’m not ignorant of the many recent and unpopular changes that Disney has made. Nor am I nebulous about some of the degraded services and amenities. But like the market, I don’t think we can judge what happened the last 2 years as normal. We all need time to adjust and process what the pandemic did to everything. I’m more willing to give Disney the benefit of the doubt that like the market, things will turn around. But that’s just my opinion. Aloha!

Mahalo nui loa!

I mean, if the pools are supposed to be heated and aren't, then I guess that's a thing. I just can't get my head around anyone needing a heated pool in Hawaii, much less over in Ko Olina, where it can get hotter than the face of the sun.

 

[havoc315]

I’ve heard that average DVC ownership is 7 years. I don’t know how true that is but sounds reasonable.

Not sure how accurate that is. And I believe it may be the average for those that resell, ignoring all those that never resell. Also don't know how old that stat is.
Afterall, right now, there are no 28-year owners.. But next year, there will be 28-year-owners. And the year after that, there will be 29-year-owners.

But if 7-years was really the average across all of DVC, then it would mean that 1 out of every 7 contracts hits the resale market per year, and then you'd be seeing a LOT more re-sale than you currently see.
It would mean 10-15% of a resort ownership changing hands every year, and we just aren't seeing that.

So my guess is someone came up with that 7-year-average based solely on those that were re-selling, and didn't include people who never re-sell.

 

[RichVIII]

Not sure how accurate that is. And I believe it may be the average for those that resell, ignoring all those that never resell. Also don't know how old that stat is.
Afterall, right now, there are no 28-year owners.. But next year, there will be 28-year-owners. And the year after that, there will be 29-year-owners.

But if 7-years was really the average across all of DVC, then it would mean that 1 out of every 7 contracts hits the resale market per year, and then you'd be seeing a LOT more re-sale than you currently see.
It would mean 10-15% of a resort ownership changing hands every year, and we just aren't seeing that.

So my guess is someone came up with that 7-year-average based solely on those that were re-selling, and didn't include people who never re-sell.

I also see ”10 years” as another average. And I bet these numbers change if you could look at age of purchaser, date when purchased, size of contract, number of contracts, financed or not, etc. My purely speculative guess is that comes from assuming many families buy in earlier in their kids lives, their kids age out or college costs loom and suddenly there is this thing sitting there that has performed well in terms of increasing in value. But I could also come up with many other scenarios like this. I think the Mouse’s number crunchers know and I would love to know as well. I am sure even the sales team knows all the buying intentions based on demographics and psychographics.

 

[Bearval]

And probably some of those resold points had already been sold once.


I am of the same opinion. Marriott charges 15-20% of retail to "wash" dirty resale points. If Disney goes this route, you can bet they will charge at least that much and probably more: I figure something in the $35-$50/pt range at today's prices, and possibly higher.

If DVC ever allowed the washing of points you better believe the costs would be a lot closer to (if not slightly more than ) the difference of the average resale price and direct price at the time you would want to wash your points . If it was any less then there would be no incentive to buy those points direct. If they ever made this offer I can only see those who are now buying resale RIV and any other future resorts with the severe restrictions in place doing this due to being frustrated in only being able to use those points at RIV. The combined costs of buying resale and washing their points may wind up being more than if they bought direct in the first place. One last comment, when they go to resell their " washed" contracts they revert back to being resale restricted since the "wash" will only apply to the owner of the wash same as the direct contracts being sold at RIV are now when resold have restrictions in place.

 

[zavandor]

I also see ”10 years” as another average. And I bet these numbers change if you could look at age of purchaser, date when purchased, size of contract, number of contracts, financed or not, etc. My purely speculative guess is that comes from assuming many families buy in earlier in their kids lives, their kids age out or college costs loom and suddenly there is this thing sitting there that has performed well in terms of increasing in value. But I could also come up with many other scenarios like this. I think the Mouse’s number crunchers know and I would love to know as well. I am sure even the sales team knows all the buying intentions based on demographics and psychographics.

The "10 years average" was an urban myth that was generally accepted on the boards for a while. It originated from a statement by the board sponsor at the time that the contracts on sale averaged 10 years before being sold. But that was a statistic relative only to contracts on sale, it didn't average with those that have never been on the market. According to real data, probably more than half OKW, the original resort, has never been sold, that's 30 years of ownership.

 

[kboo]

Owning DVC forces the issue of having great time with the family for years to come. It's not an investment, it's a practical way to spend a bit less on nice rooms at Disney.

This is pretty much why we bought in also. I was tired of trying to make a "vacation" out of mine or DH's work travel, or extending a work trip. I do wish we'd bought more points when we were first "dipping a toe" but we bought back when a 25 point direct purchase got you all the blue card benefits at the time.

I think I am a good example of why DVC and WDW will be a viable business in the future. I grew up going to WDW every year (and sometimes more) even though we lived in IL. However, I didn't really go once I was done with college until I was married and had three boys (more than 10 years after my last visit.) After our first trip as a family in April 2022, I told my wife I want to do an annual WDW trip with the boys and she agreed. We just recently bought DVC and will travel in August 2023, May 2024, and probably late May every year after. Our boys love all things Disney, as do my wife and I. I have been to other theme parks around IL and the country and they are entertaining. But WDW is something entirely different (better and more magical) and it's not limited to a book series or a single movie franchise. Disney's IP is as strong as any company around the world. And I'm not a demographic anomaly. A podcast I listen to on a weekly basis is hosted by a 40 year old and a 37 year old. The 40 year old took his family to WDW in February 2022 and the 37 year old with his family in February 2023. My best friend for the past 30 years just took his family in May 2022. Businesses may be born, grow, and die. But if WDW were to die, I would guess we have all been dead much longer.

Same here - my parents used to take us in the station wagon, driving from MA and we always stayed offsite and visited the parks pretty frugally. I *always* wanted to take the monorail through the Contemporary, so I guess it's no surprise that BLT was our first purchase. The kids now want to go "more than once a year" and we enjoy the festivals, the resorts, and the "bubble" as much as the parks. Well, the kids want to ride ride ride, but in a few years they'll be able to go to the parks alone if they want!

The big wildcard here is what the FED is going to do with the rates in the next 12 to 18 months. I'm going to take a gamble and bet interest rates go to or close to zero as soon as a bit more pain is felt and the economy really starts to hurt. I don't wish harm on anyone, but it seems like we are on a path. Rates go back to zero and the money printer goes brrr even more. Not a bad idea to get some long term assets and lock in your prices if this happens. It's a gamble for sure, but it's where I think we are headed. I think this downturn in prices is temporary and things will go back up soon given our leaders don't know any way out of this cheap money corner we are in.

Addonitis has eased since we bought Riv direct in 2019. My kids love Disney but they would prefer we all be in a studio (!) but have no problem staying in the LR of a 1br. My mom passed in 2021 after a long term illness, and so my dad has started joining us on some of our trips - so there's a slight pressure to get some more points for extended family stays.

As someone who is holding off on buying more points (LOL - VGC resale? RIV resale? VDH? BLT resale?) I'm interested and curious for my own planning. During our DVC point buying hiatus / pandemic we upsized our home, and have put our old place on the market - and got caught in the rising interest rates. But now might be a decent time to add on to DVC for the same reason.
-----
Going back to the original question, and the significance of the resale contracts listed -
I think we are in/in for another downturn and the people who have time to spend on the Dis talking about these issues in a theoretical sense are not the ones so affected by this downturn. Even back when we bought our resale contracts, the best prices were the the sellers who had to sell. Of our resale contracts, one was from a couple who'd probably aged out, but the other two were distressed sellers - one seller was the financing company itself, another had a delayed closing because they had to come up with cash to close (as the seller). I think sellers who are not distressed (like we are with our home sale) are the ones not willing to drop the price in this environment.

As for direct purchasing:
I'd consider VDH, but would probably still prefer VGC.

Our Riviera contracts were direct and with incentives the price was a few thousand $ more than what you'd get for resale. For that price we got unrestricted points, the exact size and UY we wanted, and 3+ years of use out of them (granted we also paid 3 years of dues), without the hassle of ROFR. For about $4000 + 3 years of dues we've had 5-6 stays, 2 of them over New Year's, for a total of 15ish nights at Riviera.

I'd like enough points to get in to a GV at either BLT or RIV through using only 2 years, not 3 years of points, and if we added on for that purpose, would most likely go resale. Unless there came to be more RIV incentives so that the upcharge is only slight.

 

[Brian Noble]

think I am a good example of why DVC and WDW will be a viable business in the future.

I say this a lot, but as long as they keep making families with pre-school/school-aged kids, there will always be a ready supply of Disney customers. It doesn't matter that "loyal long term guests" are checking out; there are other families ready to take their place.

There is a bit of a demographic crunch headed Disney's way in the not-too-distant-future, though that graph probably doesn't include (much of) any "pandemic boom" that may have happened. After all, a lot of us were stuck at home for a long while with nothing better to do...

(Edited to add: there was a small uptick in 2021: 3.61M to 3.66M, or about 2%, smaller than I might have guessed. Still the second lowest since 1990.)

 

[HIRyeDVC]

I say this a lot, but as long as they keep making families with pre-school/school-aged kids, there will always be a ready supply of Disney customers. It doesn't matter that "loyal long term guests" are checking out; there are other families ready to take their place.

There is a bit of a demographic crunch headed Disney's way in the not-too-distant-future, though that graph probably doesn't include (much of) any "pandemic boom" that may have happened. After all, a lot of us were stuck at home for a long while with nothing better to do...

(Edited to add: there was a small uptick in 2021: 3.61M to 3.66M, or about 2%, smaller than I might have guessed. Still the second lowest since 1990.)

I have 2 kids. I’ve done my part!

 

[tom1944]

I have 2 kids. I’ve done my part!

My parents had 5 and we were the smallest family on the block

When my daughter was a child no one on our block had more than 2

 

[DonMacGregor]

My parents had 5 and we were the smallest family on the block

When my daughter was a child no one on our block had more than 2

My mom was one of 10 in an Irish Catholic family (first born in 1916, last born in 1935). Amazingly, out of all of that, only me, my two sisters, and two male cousins on my mother's side. On my dad's side, he only hade one brother but my uncle also had three kids, so you just never know.

 

[AnnaKristoff2013]

That's kind of my point. I would hypothesize that some volume of resale contracts sitting out there now are flips which the owner is unwilling to let go beyond a certain price. That people who know the market are more likely to rent points for $20+ per year while they wait for the resale market to rebound, rather than dramatically lowering their asking prices.

That's interesting, but I think the critical mistake they are making there is not also realizing that the rental market will likely tank along with the resale market. I'm already seeing prices tick down slighly on the disboards rental board compared to 4 months ago, and if the economy really does tank I'd expect them to tank down further.

The first real domino to fall is going to be Vero Beach. At some point soon the annual dues for that resort are going to exceed the rental value of the points. I could definitely see VB effectively go down to zero at that point and become like all the other ebay timeshare deals you can buy for a dollar. Hilton Head might not be far behind that. I think a lot of the "flippers" were flipping VB before they ever had to pay any annual dues.

 

[we"reofftoneverland]

Not sure how accurate that is. And I believe it may be the average for those that resell, ignoring all those that never resell. Also don't know how old that stat is.
Afterall, right now, there are no 28-year owners.. But next year, there will be 28-year-owners. And the year after that, there will be 29-year-owners.

But if 7-years was really the average across all of DVC, then it would mean that 1 out of every 7 contracts hits the resale market per year, and then you'd be seeing a LOT more re-sale than you currently see.
It would mean 10-15% of a resort ownership changing hands every year, and we just aren't seeing that.

So my guess is someone came up with that 7-year-average based solely on those that were re-selling, and didn't include people who never re-sell.

Anecdotally, of the people we know who own DVC, none have sold (except for us). All are long time owners and have no intention of selling. I also have a hard time believing the seven year average. But… maybe the flippers in the resale industry are setting that average.

 

[we"reofftoneverland]

This is pretty much why we bought in also. I was tired of trying to make a "vacation" out of mine or DH's work travel, or extending a work trip. I do wish we'd bought more points when we were first "dipping a toe" but we bought back when a 25 point direct purchase got you all the blue card benefits at the time.


Same here - my parents used to take us in the station wagon, driving from MA and we always stayed offsite and visited the parks pretty frugally. I *always* wanted to take the monorail through the Contemporary, so I guess it's no surprise that BLT was our first purchase. The kids now want to go "more than once a year" and we enjoy the festivals, the resorts, and the "bubble" as much as the parks. Well, the kids want to ride ride ride, but in a few years they'll be able to go to the parks alone if they want!


Addonitis has eased since we bought Riv direct in 2019. My kids love Disney but they would prefer we all be in a studio (!) but have no problem staying in the LR of a 1br. My mom passed in 2021 after a long term illness, and so my dad has started joining us on some of our trips - so there's a slight pressure to get some more points for extended family stays.

As someone who is holding off on buying more points (LOL - VGC resale? RIV resale? VDH? BLT resale?) I'm interested and curious for my own planning. During our DVC point buying hiatus / pandemic we upsized our home, and have put our old place on the market - and got caught in the rising interest rates. But now might be a decent time to add on to DVC for the same reason.
-----
Going back to the original question, and the significance of the resale contracts listed -
I think we are in/in for another downturn and the people who have time to spend on the Dis talking about these issues in a theoretical sense are not the ones so affected by this downturn. Even back when we bought our resale contracts, the best prices were the the sellers who had to sell. Of our resale contracts, one was from a couple who'd probably aged out, but the other two were distressed sellers - one seller was the financing company itself, another had a delayed closing because they had to come up with cash to close (as the seller). I think sellers who are not distressed (like we are with our home sale) are the ones not willing to drop the price in this environment.

As for direct purchasing:
I'd consider VDH, but would probably still prefer VGC.

Our Riviera contracts were direct and with incentives the price was a few thousand $ more than what you'd get for resale. For that price we got unrestricted points, the exact size and UY we wanted, and 3+ years of use out of them (granted we also paid 3 years of dues), without the hassle of ROFR. For about $4000 + 3 years of dues we've had 5-6 stays, 2 of them over New Year's, for a total of 15ish nights at Riviera.

I'd like enough points to get in to a GV at either BLT or RIV through using only 2 years, not 3 years of points, and if we added on for that purpose, would most likely go resale. Unless there came to be more RIV incentives so that the upcharge is only slight.

Disneyland Hotel is the only way we might end up buying another contract.

 

[Nursemanit]

That's interesting, but I think the critical mistake they are making there is not also realizing that the rental market will likely tank along with the resale market. I'm already seeing prices tick down slighly on the disboards rental board compared to 4 months ago, and if the economy really does tank I'd expect them to tank down further.

The first real domino to fall is going to be Vero Beach. At some point soon the annual dues for that resort are going to exceed the rental value of the points. I could definitely see VB effectively go down to zero at that point and become like all the other ebay timeshare deals you can buy for a dollar. Hilton Head might not be far behind that. I think a lot of the "flippers" were flipping VB before they ever had to pay any annual dues.

Vero beach is still 1/2 the cost of another oceanfront hotel. HHI would flip first

 

[RoseGold]

The first real domino to fall is going to be Vero Beach. At some point soon the annual dues for that resort are going to exceed the rental value of the points. I could definitely see VB effectively go down to zero at that point and become like all the other ebay timeshare deals you can buy for a dollar. Hilton Head might not be far behind that. I think a lot of the "flippers" were flipping VB before they ever had to pay any annual dues.

The VB chart doesn't help. It's a low chart relative to WDW, so the dues don't spread around as many points. I can see this flip happening, as the costs keep going up, and the total points stays the same.

A big issue at VB, like a hurricane, could shift it. I agree. Then you wonder if even WDW affiliation would help. If SSR costs less than VB dues, then VB is going to be a tough sell.

I think HHI is not near that, though, as it's a much better location and can stand on its own, even if overpriced compared to WDW points.

 

[5kidsmommy]

We are still torn on resale or direct. We've been renting for awhile and my husband is finally ready to buy since we are still going to WDW, more now without the kids. We are thinking resale but I worry about losing access to all the expiring resorts even though I'll be older. I look at my parents and they are still active and travel. So while resale is quite a bit less expensive, we still may go direct because of the unknowns. Plus I'd like to pass it down to one or more of my kids to enjoy.

 

[HIRyeDVC]

We are still torn on resale or direct. We've been renting for awhile and my husband is finally ready to buy since we are still going to WDW, more now without the kids. We are thinking resale but I worry about losing access to all the expiring resorts even though I'll be older. I look at my parents and they are still active and travel. So while resale is quite a bit less expensive, we still may go direct because of the unknowns. Plus I'd like to pass it down to one or more of my kids to enjoy.

If you could afford it, I would buy direct for all the reasons you stated. In the grand scheme of things, the initial upfront cost, while more expensive and painful, will be an afterthought if you keep the contract until expiration. But this also depends on which resort you want to buy into. I couldn’t justify buying direct at some of the sold out resorts like BLT or Poly. But if you like Riviera or VGF, I’d go for it. My mantra has always been buy where you want to stay. If that is some of the older sold out resorts like BCV or BWV, I’d definitely go resale.

 

[5kidsmommy]

If you could afford it, I would buy direct for all the reasons you stated. In the grand scheme of things, the initial upfront cost, while more expensive and painful, will be an afterthought if you keep the contract until expiration. But this also depends on which resort you want to buy into. I couldn’t justify buying direct at some of the sold out resorts like BLT or Poly. But if you like Riviera or VGF, I’d go for it. My mantra has always been buy where you want to stay. If that is some of the older sold out resorts like BCV or BWV, I’d definitely go resale.

Yeah we are still torn on where we want to buy. We are already renting points for a trip after the new year and heading to WDW in a few weeks for a short visit. We might go look at Riviera while we are there. If nothing else we will just buy resale at SSR but I just worry long term I will not be happy and I don't want to take the gamble on being able to stay elsewhere. We generally travel in January and Seotember but that may change once my husband retires. Anyhow we are probably close to a year out from buying. Should have bought a decade ago like I wanted to.