Opinions: 3 months in - how have new resale rules affected market?

[skier_pete]

So curious what the folks that frequent these boards think about it...

with the new rules in place for three months I decided to do a little surfing to see how the market might be being affected.

Based on the ROFR thread - it looks to me like sales price has not yet been affected in any way. Prices seem to be around the same for Jan-Mar and Apr-Jun.

However, I went and looked at a few sales sites, and it looks to me like there are a LOT of contracts on the market. Then I looked also at the ROFR thread, and noticed a LOT more sales Jan-Mar then Apr-Jun, though honestly with June not being over that may be part of it.

So - my quick and dirty survey tells me: So far prices have not been affected, but actual sales may start seeing an effect - which in turn could eventually see an affect on pricing. (if contracts aren't selling, sellers will have to lower prices to entice buyers.)

Just curious: opinions/thoughts?

P.S.: I admit to being bias here because if we saw a $20 roll-back in resale pricing I might just get another contract.

 

[indyannamom]

As a long time watcher of prices (because I've been contemplating purchasing for almost 5 years) and a recent resale purchaser....
Things do seem a bit slower, without a consistent drop in prices (there have been some great deals)
But I think it's because many people are waiting to see what the experience for the newest resale purchasers will be. Those who purchased not too long after the 4/4 announcement, but missed the grandfathering window, have only now made it through the process and receiving member numbers, let alone taking their first trips.

For me personally, I'm bummed about the perks, but that's not what worries me most...
The way Disney handled things with the 4/4 announcement could have been done much better...the least of which would be to not make it sound like resale purchasers will be treated like second class citizens.

It will be interesting to hear from first time resale buyers as they come back from their first stays!

 

[Supplanter]

Seems to be a lot more reduced listings than new ones on the new and reduced emails I get too. It may just be a slow time overall.

It seems like you'd get your greatest amount of interest in the program after people take a Disney vacation, hear the pitch and decide to check it out more. Then they find resale and start considering it.
So my guess is we had lots of march buyers from spring break and we'll have a boost soon that'll go thru the summer as people get home from vacations

 

[ParkHoppers]

Another thing Disney may have done for itself with the resale restrictions is be able to buy back more contracts at a cheaper price if they continue to fall. Wonder if that was part of their equation.

 

[skier_pete]

Another thing Disney may have done for itself with the resale restrictions is be able to buy back more contracts at a cheaper price if they continue to fall. Wonder if that was part of their equation.

I think it's potential a side benefit to them, but they don't really want to deal in this market - they have a small stock for those that INSIST on buying at an existing property - but for the most part they prefer to sell points at $175 a point at the Poly than $135 at AKV. ROFR is more there to keep prices from dropping too low.

 

[ParkHoppers]

I think it's potential a side benefit to them, but they don't really want to deal in this market - they have a small stock for those that INSIST on buying at an existing property - but for the most part they prefer to sell points at $175 a point at the Poly than $135 at AKV. ROFR is more there to keep prices from dropping too low.

I do know that there are a lot on DVC direct waitlist and if contracts can be bought back for less I can't see why DVC wouldnt fill these waitlist.

 

[skier_pete]

I do know that there are a lot on DVC direct waitlist and if contracts can be bought back for less I can't see why DVC wouldnt fill these waitlist.

You are correct that they don't fill the current waitlist - but this is more evidence that they aren't interested in that business.

If they wanted to - they could EASILY buy back contracts and resell them to waitlist buyers for a quick profit on the order of $30 - 50 a point. The fact that they clearly don't do this means they don't really want to encourage people to buy at these resorts, and only will do it if they absolutely can't make a sale to a new resort. They put these people on waitlists with no availabilty in the hopes that they will eventually just buy the current resort.

 

[supersnoop]

I do know that there are a lot on DVC direct waitlist and if contracts can be bought back for less I can't see why DVC wouldnt fill these waitlist.

The cost to build PVB is somewhere around $35/point. Is it worthwhile to have your salesforce work a deal at AKV where they purchased it at $80 and sell it at $135? Or should they focus on selling the cheaper points for a lot more money? Sure, they could clear out those waitlists in a couple months, but then those people won't get tired of waiting and buy PVB instead.

 

[mustinjourney]

Has anyone ever cross referenced the names of the buyers that had their resale contract purchased by Disney against the waitlist for the same resort?

I totally get Disney wanting to push people into PVB since it is a higher profit margin -- but if Disney knows you're on the waitlist for BCV and then they see your name come across as the buyer for BCV -- then it would make sense for them to buy it so they could then flip it immediately to you via direct sale.

it's a little conspiracy theorist I know, but it would almost be stupid NOT to do it.

 

[KAT4DISNEY]

Has anyone ever cross referenced the names of the buyers that had their resale contract purchased by Disney against the waitlist for the same resort?

I totally get Disney wanting to push people into PVB since it is a higher profit margin -- but if Disney knows you're on the waitlist for BCV and then they see your name come across as the buyer for BCV -- then it would make sense for them to buy it so they could then flip it immediately to you via direct sale.

it's a little conspiracy theorist I know, but it would almost be stupid NOT to do it.

There have been just a handful of reports here of that happening however more often even when on the waitlist the buyers have had their resale purchases go thru. Some have also gotten calls about their waitlisted points being available when they were in the midst of ROFR and they still passed.

 

[Disney Dad ADL]

I've been watching VGC over the past few months, but haven't noticed a significant difference. It's really hard to say though because I only see the listings and not actual sales, and also VGC may act differently than WDW resorts. For VGC June Use Year (which is the most common UY on the resale market), most contracts are listed around $145-150 per point, but I don't think they are really selling well at that price point. Standard size contracts (100-200 points) have been drifting down < $140 pp and start to get picked up around there (I would imagine they probably go a bit lower than the listing price).

The cost to build PVB is somewhere around $35/point. Is it worthwhile to have your salesforce work a deal at AKV where they purchased it at $80 and sell it at $135? Or should they focus on selling the cheaper points for a lot more money? Sure, they could clear out those waitlists in a couple months, but then those people won't get tired of waiting and buy PVB instead.

Yeah, I think part of the issue is that if they ROFR something, they probably want to turn it over relatively quickly, so they want to keep long waitlists to ensure that this happens. They don't want to be stuck holding contracts and paying for all the dues and tying up their capital.

Also, there's a limited number of people out there who will 1) be interested in buying DVC and 2) be willing to pay direct prices, so they can't really play a low margin/ high volume strategy here I think. They really need to maximize the profit per customer. If they churn through those waitlists making $20 pp, they will have no customers left. They still have churn out 26 more years of profit until 2042 rolls around, when they will get a bunch of free product.

 

[mustinjourney]

There have been just a handful of reports here of that happening however more often even when on the waitlist the buyers have had their resale purchases go thru. Some have also gotten calls about their waitlisted points being available when they were in the midst of ROFR and they still passed.

there goes that theory.

 

[supersnoop]

Yeah, I think part of the issue is that if they ROFR something, they probably want to turn it over relatively quickly, so they want to keep long waitlists to ensure that this happens. They don't want to be stuck holding contracts and paying for all the dues and tying up their capital.

Honestly, I think ROFR is exercised when they have someone sitting at a table in the showroom who will only commit to one resort, so they check to see if anything has been submitted so they can turn it over immediately. I imagine the waitlist is filled more with foreclosures than ROFR.

 

[skier_pete]

They probably have a certain quota of waitlist they are allowed to fill. They don't want the waitlists to fill too fast - but are probably told to fill X # of points each month, just to keep that market open for those that are desparate for it.

Personally, I get why folks would want to buy direct for current properties and high-end ones such as VGC and VGF where the price difference isn't extreme, but I can't imagine who would want to direct buy say AKV - unless they are completely ignorant. Current direct pricing is $160 a point. Your purchase IMMEDIATELY devalues by $80 per point the moment you sign the contract - for a 150 point contract that means you immediately lose $12,000 in value, and the benefits are marginal at best. I don't care about the so-called perks, it just still makes little sense. At that price, you are so much better off just spending the extra $10 a point and getting the current resort, or just buying resale.

 

[suebeelin]

We didn't know about the perks until 2yrs after purchasing resale, so it wouldn't have mattered to us either way....

 

[pmaurer74]

We purchased a year ago and the WLV contracts were rare and sold within an hour or so, now there are a bunch. Prices are still higher than a year ago but have come down maybe $2-5 pp? I have seen a lot more reduced listings in the past few months.

 

[pangyal]

I am seeing more contracts with previous years' points than over the past few months...in the late winter and early spring, the majority of contracts were stripped. That being said- that cannot be an effect of the new restrictions, as members would have had to forego vacations for the past two years in order to build up those balances.

I'm not sure if the pricing now correlates at all to the resale rules as of April or to the annual dip around this time, to be honest. I've been the warden of the ROFR thread for the past year and definitely notice the same slight downwards trend in prices as this same time last year. I'd be interested in seeing what happens in fall.

 

[skier_pete]

All interesting posts - thank you everyone. I think in the end we are at "too early to tell" whether the greater # of contracts are caused by the new rules or not.