Questions after March 20

[jupers]

Just curious, what are your thoughts of the resale prices after March 20???? Think point costs will drop?? By how much??

ps I know it's just speculation.

 

[n2mm]

I was thinking the same thing just this morning. There is such a rush to buy resale before the change, I do wonder what will happen to resale afterwards. I'm expecting it will become a buyers market for sure. I was thinking of adding on and am thinking of waiting just to see what kind of bargain I can get. I keep looking for that perfect add on and have gotten close a few times, but haven't taken the plunge yet. If I add on it's going to be because of the home advantage and no other reason.

 

[Sandisw]

I think you may be some prices drop a bit after the March 20th deadline, but not right away.

Anyone who was on the fence of selling has probably quickly put up their contract as they seem to be selling fast since buyers who were on the fence seem to have made up their minds to get in before the change.

Once things settle down, I think what will happen is you will have a lot of people who try to offer a lot less than the contract due to its limitations. Depending on how many sellers out there really need the sale, that could affect prices.

I think it is a slippery slope. Even I, as a DVC owner, would be very tempted to pick up another contract if the price is right. I have recently seen BWV offered in the 50's. If that got even less, DH might be convinced to pick it up. So while it would be great for me as the buyer, in essence, I would be contributing to the decline in value of the DVC product, which many owners are concerned about. Tough situation for sure.

 

[rcchello]

Might go up or down. Markets don't like uncertainty. Now that the uncertainty of what the BIG news was is over, it might actually stabilize and go up.

Mostly it has to do with the economy, once there are no longer sellers who need to get out of DVC because of financial conditions the number of sellers may drop below the number of buyers out there. That would point to an upward trend.

If people stop seeing the value of DVC the opposite might happen and we will see the floor drop out.

You pay your dollar, you take your chances.

 

[JimMIA]

I'm not especially concerned with resale prices later this year.

I am concerned with resale prices 5-10 years from now.

 

[wideeyedwonder]

I was thinking of adding on and am thinking of waiting just to see what kind of bargain I can get.

Same here. The sad thing is I really don't NEED more points, but who ever really NEEDS more points, right?

 

[marie1981]

I'm not especially concerned with resale prices later this year.

I am concerned with resale prices 5-10 years from now.

You can be certain it will drop because there will be less vacations years left on your contract. DVC is not an investment, it is like a car. Value drop as soon as you leave the garage, and the value of the car continue to drop as the years go bye...

On a positive side, you will have enjoyed 5-10 years of DVC vacations! Is'nt it the reason why we buy DVC ?

 

[soxyes]

You can be certain it will drop because there will be less vacations years left on your contract. DVC is not an investment, it is like a car. Value drop as soon as you leave the garage, and the value of the car continue to drop as the years go bye...

On a positive side, you will have enjoyed 5-10 years of DVC vacations! Is'nt it the reason why we buy DVC ?

Logically, I get that... so WHY do the direct prices continue to go up year over year? I'm guessing that it goes back to the basic principles of supply and demand and the demand is there or Disney wouldn't be able to charge those increased prices. It just isn't logical to me that the "shelf life" is less than the prior year, but the direct price is more.

 

[Jason@dvcstore]

You can be certain it will drop because there will be less vacations years left on your contract. DVC is not an investment, it is like a car. Value drop as soon as you leave the garage, and the value of the car continue to drop as the years go bye...

On a positive side, you will have enjoyed 5-10 years of DVC vacations! Is'nt it the reason why we buy DVC ?

I agree with soxyes as Disney doesn't seem to lower their price each year. They simply continue to raise the price.

If the price gap grows between buying from Disney and from The Timeshare Store, Inc.® in my opinion it will benefit the buyers and hurt the sellers.

Jason

 

[toocherie]

If the price gap grows between buying from Disney and from The Timeshare Store, Inc.® in my opinion it will benefit the buyers and hurt the sellers.

Jason

I'm not sure I understand your thinking. If the direct prices continue to go up wouldn't that encourage MORE buyers to think resale? In which event the resale prices would not fluctuate as much? At some point --if the prices continue to escalate--the return on investment for a DVC vacation bought directly from Disney will become less attractive and might price some buyers out of the market.

I know DVC will be pushing the "see what benefits only a direct buyer can get" from their end, but I have to think the resale brokers--like yourself--are readying their own marketing materials explaining to potential resale buyers how those benefits really aren't a good use of points--and that the right to stay at DVC resorts is NOT going away.

I'm somewhat surprised by the current marketing I'm seeing from some resale brokers--"only __ more days until things change." That seems to be a negative way of marketing to me--panic buying is being encouraged. What are these resellers going to do after March 20 passes? All of a sudden say: "oh, the change wasn't that bad so here's why you should still buy resale?" Just seems counter-productive in the long run to me . . . . BTW the foregoing was not sent by The Timeshare Store!

 

[JimMIA]

You can be certain it will drop because there will be less vacations years left on your contract.

I don't think the expiration date is the issue. The issue is DVC has almost completely ceased supporting the resale prices with ROFR. And now, they are making all resale contracts a little less valuable than they were before with the new restrictions.

The people who are really going to get hammered by these new restrictions are NOT the folks who buy resale after March 20.

The people who will take the biggest losses are those who are buying direct at $120-130 and will find their contracts worth FAR, FAR less when they resell.

If I buy at $50 and sell at $10, I'm a lot better off than someone who bought at $120 and has to sell at $10.

 

[Jason@dvcstore]

I'm not sure I understand your thinking. If the direct prices continue to go up wouldn't that encourage MORE buyers to think resale? In which event the resale prices would not fluctuate as much? At some point --if the prices continue to escalate--the return on investment for a DVC vacation bought directly from Disney will become less attractive and might price some buyers out of the market.

I know DVC will be pushing the "see what benefits only a direct buyer can get" from their end, but I have to think the resale brokers--like yourself--are readying their own marketing materials explaining to potential resale buyers how those benefits really aren't a good use of points--and that the right to stay at DVC resorts is NOT going away.

I'm somewhat surprised by the current marketing I'm seeing from some resale brokers--"only __ more days until things change." That seems to be a negative way of marketing to me--panic buying is being encouraged. What are these resellers going to do after March 20 passes? All of a sudden say: "oh, the change wasn't that bad so here's why you should still buy resale?" Just seems counter-productive in the long run to me . . . . BTW the foregoing was not sent by The Timeshare Store!

I actually said "If the price gap grows between buying from Disney and from The Timeshare Store, Inc.® in my opinion it will benefit the buyers and hurt the sellers." I personally don't know how prices are going to be affected after 3/20/11. I was simply stating what I think will happen if the price gap does widen between buying from Disney and buying from The Timeshare Store, Inc.®

The Timeshare Store, Inc.®*nor myself does not know what is going to happen after 3/20/11. At The Timeshare Store, Inc.® we are letting everyone know the countdown as well until the change. We are simply wanting to make people aware. My guess is that there are still at least 50% of DVC owners who don't know anything about this change. I hope everyone is spreading the word. At The Timeshare Store, Inc.® we are also coming across numerous buyers who are waiting until after 3/20/11 to purchase as THEY (not me or The Timeshare Store, Inc.®) think the prices are going to drop and are not concerned about missing out on the Concierge Collection, Disney Collection or the Adventurer Collection.

Of course, The Timeshare Store, Inc.® does not set the resale prices. The market sets the price. It is simply where supply and demand come together. Saratoga Springs, for example, was selling at $80 to $85 per point via resale in 2007. Now in January of 2011 Saratoga Springs typically sells between $62 and $67 per point.

The Timeshare Store, Inc.® doesn't plan on going anywhere after 3/20/11 as we will continue to provide a service to those DVC owners who need to sell and to those people who choose to purchase their DVC on the resale market.

Thanks to all.

Jason

 

[mouseaider]

I don't think the expiration date is the issue. The issue is DVC has almost completely ceased supporting the resale prices with ROFR. And now, they are making all resale contracts a little less valuable than they were before with the new restrictions.

The people who are really going to get hammered by these new restrictions are NOT the folks who buy resale after March 20.

The people who will take the biggest losses are those who are buying direct at $120-130 and will find their contracts worth FAR, FAR less when they resell.

If I buy at $50 and sell at $10, I'm a lot better off than someone who bought at $120 and has to sell at $10.

I completely agree with your thinking.

I think Disney made a huge mistake by doing this. It can only drive prospective buyers away from buying direct if their investment (DVC purchase) automatically loses value rapidly. Why buy direct ?

 

[JimMIA]

I think Disney made a huge mistake by doing this. It can only drive prospective buyers away from buying direct if their investment (DVC purchase) automatically loses value rapidly. Why buy direct ?

I wish I could agree with you, but I can't.

IMHO, the VAST majority of DVC purchasers have no idea that there is any such thing as a resale market, nor do they realize there is any other source of information other than the DVC timeshare salesman. I know I didn't at first.

They trust Disney because they grew up with Disney, and whatever Disney says is good with them. After all, if you can't trust Mickey Mouse, who can you trust? Most of them are on a Disney vacation, having the time of their lives, and they want to own a piece of the "magic" for their families. Like we all do.

They're not really worried about their eventual resale (which for some of them will be in less than two years). If they considered the concept at all, their DVC salesman told them not to worry because DVC has ROFR, and they'll do fine. And they believe that.

Only a relative handful of those prospective buyers will come home, do a web search for Disney Vacation Club, and come to the DIS for a balanced source of information. Almost all of the prospective buyers will either buy, or not, based on their experience on their tour.

That dynamic is not going to change, and this change is not even going to come up in the vast majority of tours. And if it does, and the DVC salesman says not to worry...who ya gonna believe?

 

[Dean]

This will drive some away and attract others. Overall it is very likely to increase total sales over time and also allow for more predictability in sales. Those who say it will be mostly negative are overestimating the restraint and abilities of the potential buyer IMO. DVC still makes sense for many and not for others and the options lost NEVER made sense as a purchase incentive from a financial standpoint. Resale prices will go down some short and long term, the ? is how much. I say modestly ($5-10 a point overall) but more for the higher price options than the lower ones because the lower ones were low already. We'll see, it should be interesting.

 

[palaemon]

If I buy at $50 and sell at $10, I'm a lot better off than someone who bought at $120 and has to sell at $10.

This is exactly why we'd by resale to begin with.

 

[angelmav]

Might go up or down. Markets don't like uncertainty. Now that the uncertainty of what the BIG news was is over, it might actually stabilize and go up.

Mostly it has to do with the economy, once there are no longer sellers who need to get out of DVC because of financial conditions the number of sellers may drop below the number of buyers out there. That would point to an upward trend.

If people stop seeing the value of DVC the opposite might happen and we will see the floor drop out.

You pay your dollar, you take your chances.

I think you already know the answer. They will not go up, has nothing to do with market volatility. Resale prices will take a hit, you cant have a two tiered point caste system and not expect the valuation to decrease.

Disney IMO is basically saying they are planning on ignoring the resale market and only focus on the direct sales as far as price stabilization with ROFR, especially since they know, as JimMIA pionted out that their customer base lacks, for the most part, any knowledge of any resell market. To this customer base they can charge whatever they wish. Disney wins multiple ways. They can lower the floor on the resale market and recoup whatever points they wish at a reduced cost without having negatively impacted their core direct buyer in any meaningful way, they can then sell points that are plussed up with all options only available through Disney direct at a higher price to that same core group that they bought back at a reduced cost so more profit for them.

 

[ML_LovesDisney]

I completely agree with your thinking.

I think Disney made a huge mistake by doing this. It can only drive prospective buyers away from buying direct if their investment (DVC purchase) automatically loses value rapidly. Why buy direct ?

I don't think the majority of people look at it for its "value". Initially, I believe, most people think they will keep their contract until it expires. I am not concerned at all about my contract losing its value, because I have no plans to sell it. I buy direct because its easy, there is no waiting, and for our initial point purchase, we took out a loan and for future add ons, buying resale is definitley an option but buying direct is the EASIEST route by far. Resales take weeks and months and possibly never go through. If I buy direct, I get the points to use immediately and its guaranteed.

 

[Jason@dvcstore]

Resales take weeks and months and possibly never go through. If I buy direct, I get the points to use immediately and its guaranteed.

When buying through The Timeshare Store, Inc.® we set our closing dates for 8 weeks from the date of purchase. Typically buyer and seller receive the final documents in their email at the 6 week mark and as soon as each party returns their documents the file can close. Some listings might say "can close 7/15/11" and if you purchase a contract such as this it will not close until that date and that is advertised on those listings.

At The Timeshare Store, Inc.® the only property that Disney seems to be buying back is Beach Club Villas and that is if it sells for $83 per point or less (although that isn't always the case as they recently waived on a Beach Club at $81 per point). If Disney does buy the property back the buyer is refunded 100% of their funds.

When buying through The Timeshare Store, Inc.® you are also guaranteed to get the points that are in the contract. Clause # 9 in our contracts states exactly what is in the account at the time you purchase and will watch the paragraph you see on the internet regarding the current status of the points. If clause # 9 does not match correctly then Disney will kick the contract back until they have a signed addendum from buyer and seller showing the change. ROFR is actually to protect the buyer as The Timeshare Store, Inc.® simply can't make up the points that the buyer is getting. It has to match the points activity statement that Disney provides us when we market the property.

Now we have run into situations where the buyer ends up getting 100% of the money back because we have run into sellers who can't get their final documents back. In 2010 The Timeshare Store, Inc.® sold a little over 1800 contracts and less than 6 contracts had this issue. Examples that have happened include where the only seller on a deed dies during the closing. These require a certification of appointment of administrator which can take a long time and typically the buyers don't want to wait. We also have run into situations where the sellers start the process of getting a divorce after selling and now they can't come together on choosing to both sell. This is where we have majority of the problems. When these contracts can't close it is very frustrating to the buyer which I totally understand.

Jason

 

[maminnie]

I don't think the majority of people look at it for its "value". Initially, I believe, most people think they will keep their contract until it expires. I am not concerned at all about my contract losing its value, because I have no plans to sell it. I buy direct because its easy, there is no waiting, and for our initial point purchase, we took out a loan and for future add ons, buying resale is definitley an option but buying direct is the EASIEST route by far. Resales take weeks and months and possibly never go through. If I buy direct, I get the points to use immediately and its guaranteed.

ML Loves Disney:

I certainly hope that life continues to treat you well and that you don't have to sell your DVC timeshare....not the case for other fellow members who may now have to sell and thought that their DVC timeshare would hold its value as it traditionally has over the past years. This potential change to resale purchases after March 20th by DVC/Disney may now change all of that.

Wishing you and your family continued success and good fortune.....