Is Your DVC Now Worthless?

[ChiSoxKeith]

For those owners who are waiting to buy after 3/21/11 from the resale market are probably hoping you are correct. Those that feel they don't need the Concierge Collection, Adventurer Collection or the Disney Collection will have a field day if the prices drop as far as you think.

Jason

The Timeshare store will be on my speed dial if prices drop down that far and I will be having that field day. However, I still think that prices will not plummet like that.

Think of it this way.....DVD is having a field day selling BLT right now (according to wdrl's sales reports). If BLT drops precipitously down, DVD will have a field day ROFR'ing contracts and turning around and selling them at $130pp.

 

[chalee94]

I have been out of town for a bit on vacation so I obviously missed some announcement. I did a quick scan of the current threads and nothing popped out at me - anyone care to enlighten me on this change?

here's the long answer:

http://www.disboards.com/showthread.php?t=2636666

 

[TyGuy]

Ah, but it is. When you buy a new car, you know* that no one else has driven it. It has that new car smell. It has only a handful of miles on the odometer. Every stain on the upholstery, every ding in the paint, was caused by you and only you, until the day you sell it.

A "new" timeshare isn't new. It's used-used-used. With the exception of the very first guest to stay in a unit the very first night, someone else has already spilled juice on the couch, whether you buy from the developer, or you buy on the secondary market.

(*---okay, maybe someone has, but not much more than a test drive.)

DVC is more like buying a car, either new or used... You buy it to use it. You may look at resale value at the end of your use, but that should be part of your buying decision. And the same thing goes with the whole loss of job scenario... If you buy a new car, and then lose your job... guess what, you are not going to get what you paid for the car back. And with a car, there are decisions beyond your control that are going to affect your resale value. Ask the old timers who owned a car that need leaded gas when everything changed over to unleaded. Or the people who owned Oldsmobile’s. When the line was discontinued, the resale value plunged...

When you buy into DVC, you should figure out what your breakeven point is, not how much owning DVC will make you as an investment... Then use it for everything it’s worth.

 

[JJ721]

The Timeshare store will be on my speed dial if prices drop down that far and I will be having that field day. However, I still think that prices will not plummet like that.

Think of it this way.....DVD is having a field day selling BLT right now (according to wdrl's sales reports). If BLT drops precipitously down, DVD will have a field day ROFR'ing contracts and turning around and selling them at $130pp.

That's right Keith. Your analysis is spot on (although I can't say I support you on your baseball allegiance!!!)

 

[ChiSoxKeith]

That's right Keith. Your analysis is spot on (although I can't say I support you on your baseball allegiance!!!)

Well, we can agree to disagree.

Just as an aside, has anyone ever checked on ebay what some of the other time shares go for? I see them going out for pennies on the dollar.

 

[eliza61]

So the lesson here is before eating the $20,000 ice cream cone in the DVC sales center, think about it hard. If you are in an industry that is not doing well in the 10% unemployment economy we are in and their is the slightest chance you could lose your job maybe DVC is not for you.

You could book a room at Disney and get free dining or get the Villa at 40% off the regular rate today and not drop $20k and worry about points and all this. h

No matter what industry you are in, any time you make a major purchase I would hope you think hard about it.

I would apply the 2nd sentence to just about any thing. If you purchased a house and lost your job 10 months later you stand a very good chance of losing money depending on the type of mortgage you have.

And forget about cars, new or used if 10 months later you try and sell it, you'll stand a good chance of not recouping your money.

DVC for my family was never part of an "investment" plan and in fact my financial planner advised us NOT to buy one. We considered it a luxury item and we treat it as such.

For us it's not worthless because we use it.

 

[ADP]

The big issue I see is that the second you sign up and buy DVC now with Disney, it is almost instantly worthless.

If you had to sell your DVC for whatever reason, job loss, etc. you just lost some amazing amount of money because now you are reselling it on the resell market and the buyer can not get the benefits the original contract had. Your $130 a point that you paid seconds ago probably just dropped to $50 or less before the ink dried on the paper you just signed.

Basically the $20k I spent on DVC is going to be worth very little if I ever have to sell due to a future hardship or just because my lifestyle and vacation preferences might have changed years down the road.

Just my opinion, but worthlessness is in the eye of the beholder. At least in this case. I love my DVC!

 

[calypso*a*go-go]

I definitely don't think my membership is worthless...when we orginally purchased via resale, I bought a second contract the same way shortly thereafter...I used the 2nd contract as "rental points" and once I'd rented out enough points to cover the amount I paid for the first contract, I sold the second one and actually got back the initial investment.

So as far as I'm concerned the first contract didn't cost me anything (except maintenance fees which is still less that what we would have paid for any Disney vacation).

If we end up selling the first contract down the road, *anything* we make off it will be money in our pockets!

 

[ADP]

I definitely don't think my membership is worthless...when we orginally purchased via resale, I bought a second contract the same way shortly thereafter...I used the 2nd contract as "rental points" and once I'd rented out enough points to cover the amount I paid for the first contract, I sold the second one and actually got back the initial investment.

So as far as I'm concerned the first contract didn't cost me anything (except maintenance fees which is still less that what we would have paid for any Disney vacation).

If we end up selling the first contract down the road, *anything* we make off it will be money in our pockets!

Hi Lisa!

 

[Brian Noble]

How do you know if will be a little less...anything is possible at this point with this announcement.

I don't "know", but I think that is where the smart money is. The overall market generally prices things rationally---people collectively look at the value of the no-longer-available perks, and decide what they are worth. In this case, the perks are questionable-to-horrible uses of points, and most people would place a very small value on them (if any value at all) in a dispassionate analysis. Now, not everyone will be dispassionate, so there may be some small effect. But, market-based thinking says the effect will be small indeed.

DVC is more like buying a car, either new or used... You buy it to use it.

Agreed---and I even wrote as much in my first post in this thread. But, with the car, a new car is new, and a used car is used. For DVC, points are points, no matter how you got them---except for these out-of-system uses. The value of those use cases is poor, and the only remaining difference between a direct contract and a resale one, with the same point totals, home resort, and use year, is price.

Just as an aside, has anyone ever checked on ebay what some of the other time shares go for? I see them going out for pennies on the dollar.

I own three of them---purchased for anywhere between tenths of a cent to a dime on the dollar. To expand on my earlier point: Timeshares do not have a "natural demand". Very few people wake up one day and think, "You know, today I think I'll buy an annual vacation obligation." Demand is created by the developers' marketing prowess. As any timeshare development grows, more and more people are looking to sell. Unless the pool of buyers likewise grows, prices collapse. DVC has been spared this, for the most part, because the system is pretty well known, and there are plenty of ways for curious parties to find out how to save money on the Disney vacations they take anyway. But, even DVC can't escape the forces of supply and demand---and we are starting to see the impact of it. Prices may recover with the economy, if fewer people are looking to sell and/or more buyers enter the market. But, it remains to be seen if an economic recovery can have enough impact on resale prices going forward, vs. the downward pressure of an ever-increasing resale supply as a function of system growth.

II, Cruises, Adventures by Disney.

I believe that non-qualified contracts will still be eligible for the World Passport Collection (RCI today, II in the past). But, not the Disney (non-DVC hotel, cruise), Adventurer (ABD), or Concierge collections.

 

[kikiq]

So the lesson here is before eating the $20,000 ice cream cone in the DVC sales center, think about it hard. If you are in an industry that is not doing well in the 10% unemployment economy we are in and their is the slightest chance you could lose your job maybe DVC is not for you.

You could book a room at Disney and get free dining or get the Villa at 40% off the regular rate today and not drop $20k and worry about points and all this. h

The lesson is before you spend that kind of money on anything you DON'T NEED and DON'T HAVE THE MONEY, think hard. We thought hard for 10 years before we had the money. My workaholic DH needed to have his downtime and DVC was the place he wanted.

 

[dizfan]

With BLT direct going to $140 in just over a month, I believe the points we purchased have (or soon will) increase in value.

 

[Hibernians]

we joined DVC 5 years ago this month; buying directly from Disney and we have no regrets. We have gotten a lot of use from it and we're happy to know that we will be members for another 40+ years or so.

 

[Mickey'sApprentice]

Does DVC have good legal standing to stop ALL resale owners from staying at new properties, such as the rumored Ft. Wilderness DVC resort?

I know several people say that DVC can do almost anything, but that some things would cause legal challenges, and other difficulties.

 

[Dizny Dad]

Does DVC have good legal standing to stop ALL resale owners from staying at new properties, such as the rumored Ft. Wilderness DVC resort?

I know several people say that DVC can do almost anything, but that some things would cause legal challenges, and other difficulties.

There will always be legal challenges. It is the mechanism by which we test the actions of others.

In this case, I believe that the only legal right we have as DVC owners is to reserve time in the Resort in which we invested. Using other facilities is a perk, not a guaranteed right. So if you purchased points at SSR because the maintenance fees were low, but planned to use the points at Aulani, someday you may be disappointed.

Buy with the intent that you can only reserve time at your home resort, and enjoy the perks while we have them!

Welcome Home!

 

[crisi]

Maminnie, Sorry you feel so strongly about a change that really does not affect your DVC in any significant way other than it may sell for a little less than you thought it would. I guess one should never buy a timeshare if the resale value of it is as important as it seems to be to you.

Though, honestly, over the years I've seen a LOT of people justify being able to "afford" a DVC resale contract based on the historical resale prices. A lot of people have justified their purchase because they could sell it for more than they bought it for. And, historically, its been a pretty good risk. For those of us that bought until 2005 or so, we could be pretty sure that if we held on for a few years, we could sell for what we bought it for - faster if our original purchase was resale. I'm very financially conservative, but my original decision to purchase (resale) was made off knowing that I could resell my contract, pay a commission, and walk away from the deal two years in having taken a trip or two and be out dues. I've said for some time that I wouldn't buy DVC now - I think there are more cost effective options, but this would further discourage me - particularly from buying direct.

In some ways, this is a great way for Disney to market direct inventory. In others, its a sign that the system has simply gotten too big - this cash cow is not producing as much milk.

 

[bobbiwoz]

Does DVC have good legal standing to stop ALL resale owners from staying at new properties, such as the rumored Ft. Wilderness DVC resort?

I know several people say that DVC can do almost anything, but that some things would cause legal challenges, and other difficulties.

Can someone address this please? I thought that owners were guaranteed a priority booking period. Doesn't that imply that other resorts can be booked?

Thanks.
Bobbi

 

[Brian Noble]

I believe the points we purchased have (or soon will) increase in value.

Don't count on it. If someone *must have* BLT, then *maybe* this would cause them to consider a higher resale offer. But, as the supply of BLT resales increases, that will put downward pressure on prices. And, BLT is a relatively large resort---an increase in supply is inevitable.

Does DVC have good legal standing to stop ALL resale owners from staying at new properties, such as the rumored Ft. Wilderness DVC resort?

It could be done, quite easily. The idea is that you'd create a "second club" that included only the new resorts. Then, you can establish a trading system between the "old" club and the "new" club, fixing the exchange rate at 1:1. Only "qualified" contracts in the "old" club could exchange into the "new" club.

For anyone who owned a qualified contract, it would look like one seamless DVC system. But, legally, they would be separate.

There are probably other ways to make it happen, as well.

 

[eliza61]

Can someone address this please? I thought that owners were guaranteed a priority booking period. Doesn't that imply that other resorts can be booked?

Thanks.
Bobbi

I thought it was that we were guaranteed a priority booking at our "home" resort and home resort only.
I think the priority window is 11 months out,

 

[bobbiwoz]

In the past there have been discussion here that the home resort priority window could be as little as 1 month, with others coming in at the 10 month period to book any resort. Doesn't a "priority" time imply that there will be a time that others can book into any particular home resort?