Not drinking the cool aid on resale!!

[JimMIA]

If you cherry-pick your sample, you can prove just about anything. And your basic assumption is that you purchase at the lowest possible direct price and sell at a high point in resale prices. If you're that good at timing markets, you can make a lot more money in the stock market than trading DVC contracts!

In addition, a couple of important resorts (like the largest ones, with by far the greatest number of contracts) were left off your list for some reason.

Here are their numbers:

SSR - opened in 2003 at $89 -- currently clearing ROFR between $50-$70
AKV - opened in 2007 at $101 -- currently clearing in the mid-$70's

By my rough math, neither of those have done terribly well.

 

[15titles]

Its pretty simple for me. I want between 200 and 250 points and I can't afford to get those direct from Disney (cash only, no financing). I can only afford that amount on the resale market.

 

[wildforgoofy]

Lol and yes I will bet the house on the over!!! Better than that how about betting a kitchen sink ice cream sundae at beaches and cream?

Deal! Mark the day, 4 years from today June 3rd 2018, revisit this post and we'll see who's buying. Hahahaha!!!

 

[supersnoop]

I respect everyone's point of view but some of your statements are totally missing the point. I am making a simple statement of fact that since the inception of DVC buying at the early price when a resort opens is just as good a decision based on historical price data as buying resale for the same resort years down the line. Who is comparing resale vs. Direct once the resort is sold out? I think your are spinning my initial point and trying to take the conversation someplace else.

Let's do some simple math.
OKW was $51 in 1991, when you got the full 50 years, so, about $1.02/year. Today, you're at 28 years with an average LISTING price at $69, and more like a $65 selling price. That initial $51, adjusted for inflation, is $89 in today's dollars. $89-$65=$24, but we're only 22 years into it. So, buying OKW resale today is just as good as buying OKW direct 22 years ago.

The resale market is reasonably efficient. Prices take inflation, useful life, and present value into consideration. Most timeshares lose 80%-90% of their value as soon as they're sold. Disney only loses 10%-20% immediately. That makes a purchase at either price a relatively safe decision.

If your point is that, buying the new property direct isn't a terrible decision like most timeshares, then we can all agree with that. But, when the same exact product is available at a 40% discount on the resale market, direct is a terrible waste of money.

 

[Johnny D]

If you cherry-pick your sample, you can prove just about anything. And your basic assumption is that you purchase at the lowest possible direct price and sell at a high point in resale prices. If you're that good at timing markets, you can make a lot more money in the stock market than trading DVC contracts!

In addition, a couple of important resorts (like the largest ones, with by far the greatest number of contracts) were left off your list for some reason.

Here are their numbers:

SSR - opened in 2003 at $89 -- currently clearing ROFR between $50-$70
AKV - opened in 2007 at $101 -- currently clearing in the mid-$70's

By my rough math, neither of those have done terribly well.

I think those 2 resorts are the exception rather than the rule. Sheer size and location has diminished their value.

However since we are "cherry picking" let's at least cherry-pick accurately.

Ssr Aug 2003 open price 89-10 dollar incentive = 79 pp

Akv open at 101-8 dollar incentive =93.

I think the vast majority of Ssr is selling in the high 60 to low 70 area and most of akl in the low 80's

 

[twinsouvenirs]

This was sort of raised, but one of the 'scarier' elements of timeshares to me is the perpetual commitment to maintenance fees. We actually considered staggering our contracts to expire gradually, and sort of did, by buying some at SSR and some at GFV. We're hoping that means that the points will reflect our usage/accommodation size requirements at various points.

 

[Johnny D]

Let's do some simple math.
OKW was $51 in 1991, when you got the full 50 years, so, about $1.02/year. Today, you're at 28 years with an average LISTING price at $69, and more like a $65 selling price. That initial $51, adjusted for inflation, is $89 in today's dollars. $89-$65=$24, but we're only 22 years into it. So, buying OKW resale today is just as good as buying OKW direct 22 years ago.

That's pretty much what I'm saying. Buying direct is NOT a bad decision if at the entry point. Just as good as resale 22 years later in terms of value. Also okw. Is large and not near a park. I believe other resorts may do better.

 

[Splashboat]

Who is comparing resale vs. Direct once the resort is sold out?

Actually you are. You used sold out resorts and compared original direct prices to current resales prices - not current direct for those resorts.


When you make comparisons you need to compare apples to apples.

 

[R0cky]

As said in the original post resale is a great option. The point being a lot of people stick a finger in your eye and feel the people who buy direct are foolish. History shows different if you buy early when a new resort goes on sale. I just wanted people to know that. Also I feel that buying bcv at 95 pp with a 2042 ending date may be a bad move. It will, like all contracts be worth zero. So would you have liked to buy vgf at 150 pp with 50 years left or bcv at 95 with 28 years left. I think in 10 years that initial $55 savings won't look so good if u decide you want out. Where as at vgf in 10 years you will be just fine if you want to sell. CONGRATS on your Blt purchase and welcome home!!

I agree that BCV at 95pp is high for a contract ending in 2042. However, it's the market. If people want to pay that much for a contract, then they have every right to charge that amount.

But if you compare an OKW at 60 pp ending at 2042 compared to VGF at 150, it's not even a contest. Sure you get a contract that extends out 18 years, but 2 things factor into this.

First off, you are paying almost 3 times the value on points. Which you can kind of write off on the fact that your contract is extended out. However, it's only 18 years, not 3 times the legnth.

Secondly, you have yearly dues on those until the end of your contract. If you go by historical records, there has been an increase of about 4% from what i have researched. In 2045, your points will cost more in dues than OKW will at the end. Which means that your final 15 years are going to cost more money per point on annual dues.

Last point to consider is a person buying in to a 2042 contract has options to either purchase again (resale or new), possibly extend the contract for $x pp. or walk away with a ton of memories of a great program.

We looked at both options. We could buy new at a smaller contract for a longer time. Or increase the amount of points and live comfortably for a shorter contract and see what the future holds.

When we thought about our station in life and what we wanted to do it made sense to go resale.

Do I think someone is a fool for buying new? No, especially if they truly love the VGF or future buyers with the Polynesian. But it really is hard to justify buying new from strictly a financial standpoint.

 

[Johnny D]

Actually you are. You used sold out resorts and compared direct prices to current resales prices - not current direct for those resorts.


When you make comparisons you need to compare apples to apples.

Nope....comparing what dvc owners purchased their points for at original asking price vs. People buying same resort through resale years down the line. You compared buying those sold out resorts direct from Disney now. I think everyone else reading this thread gets the distinction even if they disagree.

 

[drusba]

I guess the problem I am having, other than that AKV and SSR (both selling resale well below original prices) were simply left out of the equation in the original post, is that we are dealing with an incorrect premise: that most here criticize anyone who buys new and say that resale is the only way to go. I have been here for many years and the usual mantra I hear is that if the new resort (or any other) is where you want to stay most of the time then buy there. Resale is highly likely the better choice for any resort other than a new one because of price. In fact, as has been pointed out for VGF, if what you want there is studios most of the time you better buy there because there are a limited number and it is likley by the time the resort sells out those are going to be difficult to get year round at 7 months out.

Generally, if the resort is new and that is where you want to stay, your only choice is to buy new because no real resale market for that resort has yet to develop. The real issue with buying new is that most do so having no idea there is an alternative. DVC for many is still an impulse buy done while visiting WDW without any real research into alternatives. It is that uninformed choice that most here would like others to avoid (incuding because for many here they are trying to help others avoid the same uninformed decision that they made).

Personally, I no longer hold firmly to the mantra that you should even buy where you want to stay most. I would be wary of that advice if where you might want to stay is a 2042 end date resort and you are not older than 45. Also, I cannot recommend VGF to anyone if what they are going to do is buy enough points to get a studio there. VGF's price per point and point structure per night are so high that the vast majority of those purchasing at VGF are buying just enough points to get a studio each time they go. VGF may hold its value in the future, but I perceive once VGF sells out there are going to be a number of disappointed owners who want one of the 30 standard view studios during high demand times (such as times between late Sep to marathon weekend in Jan) who wil try to reserve exactly 11 months out and find they are already blocked out for their arrival date. That is already occurring to some extent for BLT standard view studios (27 total) for times during middle of October, Veterans Day weekend, Thanksgiving, first and second week of Dec and Christmas week particularly near NYE.

Whether a resort has held its value in relation to original prices is, my view, one of the least relvant reasons to buy there. Far more important is where you want to stay, ease of getting room category you want during the 11 month window, resort end date, and time of year you intend to go (which, if that time is mid-Jan to mid-Sep and you just want "a" near park resort at WDW without being picky about which one, you might as well buy SSR because at 7 months out BLT lake view, BWV pool/garden, VWL and even BCV are usually open then and at least one of them will be open).

 

[dizfan]

Personal opinion is that much depends on when a resort sells.

SSR and AKV were the two resorts sold just before the economy crashed. Much like houses sold during the housing bubble, they will often be the last to recover the value.

For your records, BLT actually went down in price from the opening price. We bought May or June 2009 during the first webcast for $96/pt. Others received even better deals for as low as $91/pt at that time. It was 2011 or 2012, that Doorway to Dreams DVC locations had a Black Friday promotion to buy BLT direct for under $100/pt.

After DVD was back on solid footing that prices started rising. Resale prices just started increasing significantly in the last 1-2 years.

Remember, DVD opened Kidani, BLT, THV, and VGC all in 2009. March 2009, was the bottom of the stock market and the end of the free fall in the economy. That was over 10 million points that DVD added to their sales inventory at the same time that they were just starting to receive a ton of foreclosure points back from 2006-2008 sales).

 

[luckyman_apd]

I tend to stay away from the "direct vs resale" arguments... because many people get their panties in a twist, and feel the need to support their side because that's how they spent their money. For me it was simple....which was cheaper at the time I wanted to purchase. Resale was it. BLT was still selling direct (not sold out yet) and the resale market was at near bottom due to the economy. No matter what the incentive, I was going to have to pay $135 per point at the minimum (at most likely $140 due to smaller size contract) direct vs the $95 resale I got it for. I have no regrets. But OP you do make a good point, but it's all about when you are purchasing. If I was interested in GFV or the upcoming POLY, I would definitely buy during the initial sales process. But I didn't know about DVC or wasn't in a position to buy until 3-4 years ago...so none of the resorts were an option for me when they went on sale.

I'm sure if in 2 years or more when people look to sell GFV....they will be asking premium amounts....and not near the BLT prices that are currently selling for. But will they command $150 or more? That remains to be seen. I think the recent surge in direct pricing has more than increased the rise of inflation. Also, it may be 5 or more years until we see GFV for sale. BLT resales I feel were because of the economy. I think many people go in over their heads, then the bottom fell out, and they realized they didn't actually need what they purchased (and it could have been other resorts as well.....just using BLT because it was so new comparatively at the time)

 

[Splashboat]

Agree with Luckyman_apd.

The reason I responded to this one is because the OP title reads: “Not drinking the cool aide on resale!!”

He writes “It seems right now people are happy to be picking up 2042 to 2054 end date contracts for more or the same money then they were sold for 10 to 20 years ago, and are pounding there chest about the resale market. A little confusing.”,

Certainly sounds like he was mocking people who purchase resale on sold out resorts.
People who suggest resale are suggesting it based on current direct prices vs. current resale prices.
If someone wants to buy at the Boardwalk the choice is to buy at current resale or direct prices.
I have not read a post in the last year from anyone suggesting someone buy GFV resale now so I am not sure why that is a discussion.

Didn't read through all the comments so I don't know if it was noted but right now to stay the first week of December at BWV standard 1 bedroom is 154 points, GFV standard 247 - you need a lot more points for the newer resorts.
Most people are not going to have their contract in 40 years
.

 

[Johnny D]

Agree with Luckyman_apd.

The reason I responded to this one is because the OP title reads: “Not drinking the cool aide on resale!!”

He writes “It seems right now people are happy to be picking up 2042 to 2054 end date contracts for more or the same money then they were sold for 10 to 20 years ago, and are pounding there chest about the resale market. A little confusing.”,

Certainly sounds like he was mocking people who purchase resale on sold out resorts.
People who suggest resale are suggesting it based on current direct prices vs. current resale prices.
If someone wants to buy at the Boardwalk the choice is to buy at current resale or direct prices.
I have not read a post in the last year from anyone suggesting someone buy GFV resale now so I am not sure why that is a discussion.

Didn't read through all the comments so I don't know if it was noted but right now to stay the first week of December at BWV standard 1 bedroom is 154 points, GFV standard 247 - you need a lot more points for the newer resorts.
Most people are not going to have their contract in 40 years
.

This sounds like a national news organization I know that takes snippets of what people say and spin it. How does a person who in the first couple lines of an original post say "I agree that resale is a great option but think that there is an important fact overlooked." Be mocking resale buyers? The entire point is that there are thousands of posts that say resale is the only way to go. Many suggest not buying a new resort and wait a few years until they hit the resale market. My point is there not much difference in buying in early and waiting. The numbers speak for themselves. Even SRR opening at 79 pp and being a large resort not near a park...10 years later is not doing to bad.

If you read the original post in its entirety I think my thoughts were clear. I too, if I wanted to buy blt would go resale.

 

[JimMIA]

The question I wish more people would ask is not whether to buy direct or resale, but whether to buy ANY timeshare at all. I don't see many people really exploring the many, many options for vacationing before they buy DVC -- or Wyndham, or Hilton, or Marriott, or ... I know I didn't really explore all the options.

I think the first question people should ask themselves (and answer it honestly and objectively) is "Do I really want to take on this kind of long-term financial commitment for vacationing?" Or put another way, "Is any timeshare purchase really the best use of that money for my family?"

 

[supersnoop]

Nope....comparing what dvc owners purchased their points for at original asking price vs. People buying same resort through resale years down the line. You compared buying those sold out resorts direct from Disney now. I think everyone else reading this thread gets the distinction even if they disagree.

Then you need to compare against present value.

 

[GOOFY D]

I respect everyone's point of view but some of your statements are totally missing the point. I am making a simple statement of fact that since the inception of DVC buying at the early price when a resort opens is just as good a decision based on historical price data as buying resale for the same resort years down the line. Who is comparing resale vs. Direct once the resort is sold out? I think your are spinning my initial point and trying to take the conversation someplace else.

As far as your corvette analogy. ...don't really get your point. My statement is for current buyers going forward to see how dvc has historically performed when they make a buying decision. I have been hearing the same stuff since 1999 when I bought bwv. ......your crazy...The price is to high. My brother bought bcv at 80 in 2002 and people were saying your crazy it's way to high. I bought gfv at 150 pp and guess what...I'm crazy it's way to high. I guess we will see.

Your point makes perfect sense if everyone has money sitting and waiting for a property to open. Timelines and wants/needs/ability vary greatly. I think many value resale significantly versus purchasing direct for the same property (and therefore the same end date).

 

[supersnoop]

So, when you say you aren't drinking the cool aid, you really mean that you won't drink the cool aid that you made in a very specific way. But you seem to be making that cool aid in a way that nobody else have ever made nor offered to you.

There are people who buy direct at the newest resort because they want to stay there. Nobody has argued against that.

There are people who buy direct at the newest resort because they think that's the only way to buy in, but they really want to stay at Animal Kingdom. They just wasted $6,000 or so.

There are people who buy direct at "sold-out" resorts because it's "easier" than buying resale. They're paying $200-$4,000 for the convenience. Smaller amounts obviously make more sense.

So, if your argument is that people buying direct aren't really that much worse off after twenty years, you're right. But, as in the examples I've provided and depending which resort they purchase, they could be much better off if they bought resale.

 

[Brian Noble]

Some thoughts.

1. If you want more points today, and have a time machine, this is really useful data.
2. When any new resort comes online, you can buy that shiny new resort at developer prices, or an existing resort resale. The resale deed is generally cheaper.
3. There's this thing called inflation. That $51 price for OKW in 1994 is worth $81.58 today. So, you're still doing quite a bit better buying resale now than new in 1994.

Some people aren't big believers in things like inflation. For any such people, I'm happy to borrow $100 today, and I will pay you back that $100 in ten years.

Of course the OP can spend their money any way they like. If I were buying DVC points, I'd be buying them resale.