Recent experience in selling BWV contract

[Sandisw]

That’s all fair. I may be completely wrong. My read of things is we haven’t had big time layoffs across the economy yet DVC prices have cooled substantially, and will fall further as we get into 2023.

There are a lot of people who panic bought DVC at prices we will never see again barring another glob of stimulus checks. There are a lot of people holding contracts for the purpose of rental income, and rentals are superabundant. There’s a lot of overhang in the DVC market.

Had anyone told you in February 2022 that BLT would be $140 in February 2023, I think everyone here would’ve scoffed at that/called it doomsayer nonsense. Yet here we are. The complacent and dismissive, “Yeah, so what.” Is the headscratcher for me.

Guys, BLT is $140 and falling. I think the overall numbness and disbelief have lulled people into gradually accepting and normalizing just how far and fast DVC has, yes, collapsed. In a deep recession, timeshares are tough sales. People don’t have to go to Disney. Those that do don’t have to stay on property, let alone buy in at DVC. You can rent houses for a week for half the dues of DVC. There’s just a lot of substitution people will be doing. Walmart is noting more traffic from affluent customers. People are trading down across the board, whether DVC owners want to hear it or not.

Personally, I would have said seeing BLT back into the $130: and $140s would not have shocked me.

I bought a resale contract in 2020 for $150 and sold it a year later for $189..which was higher than most were getting.. to buy RIV resale I was shocked someone paid that but happily took it.

Again, I think each resort is unique and the fall may not impact every resort the same way. I’m just not yet convinced that the buying public..and there still is a decent amount of resale points being bought..will let those near park resorts that are not 2042 go that low.

Now, SSR, OKW and AKV? All bets are off there.

 

[Ruttangel]

Whenever DVC stops ROFR (such as during Covid) resorts settle down to where the market thinks they should sit
SSR/OKW 90
BRV 95
OKWE/AKV/BWV 105
BCV $120
etc

SSR and AKV were propped up to $140 because DVC were aggressively taking contracts.
So, the only real question is why DVC has stopped ROFR, we might never know.
Personally I think DVC not ROFR is a mistake, it makes the gap between Direct and Resale too big and they will lose some sales.
Why not buy back OKW and then sell it as extended to make sure they get 15 years more dues?
Very strange.
I don’t think it will continue for long (max 6 months), so I would have no problem adding points if right deal comes along

 

[Stank]

Whenever DVC stops ROFR (such as during Covid) resorts settle down to where the market thinks they should sit
SSR/OKW 90
BRV 95
OKWE/AKV/BWV 105
BCV $120
etc

SSR and AKV were propped up to $140 because DVC were aggressively taking contracts.
So, the only real question is why DVC has stopped ROFR, we might never know.
Personally I think DVC not ROFR is a mistake, it makes the gap between Direct and Resale too big and they will lose some sales.
Why not buy back OKW and then sell it as extended to make sure they get 15 years more dues?
Very strange.
I don’t think it will continue for long (max 6 months), so I would have no problem adding points if right deal comes along

Everything is in a cost-rationalization mode. Interest rates are the highest they’ve been in 15 years. I think that’s why I get so much pushback from $100 BLT—because people are so used to a world of free money they forgot what it looks like with some cost of capital gravity applied to it.

Disney just got Iger back. They’re going to be cutting costs, laying off staff, jettisoning business units, to bring back the dividend and try to figure out what to do with streaming. They have a $10 billion bill due to buy the rest of Hulu at the end of 2023. Meanwhile they’re sitting on a pile of DVC inventory with new DVC under construction staring in the face of what looks to be a severe economic recession.

That’s why ROFR is on ice. They got a ton of expenses this year, a ton of DVC inventory, and an inverted yield curve that’s worsening—-with interest rates the highest in almost a generation.

But a lot of people say I’m completely wrong and Disney will just buy up resale contracts in the face of this. No reason, just that they’ll do it.

 

[Brian Noble]

The other thing about “the market” is that brokers tend to list it by *what passes* not by *what sells*. The latter is “the market”.

 

[jodifla]

It's great that it worked out!

It was certainly risky though, I don't think anyone would argue that!

Describe how it was "risky." Our payments were about $100 a month. We accelerated our payments and paid it off early. We were both working. We just didn't want to dip into savings to pay it off right away. Because we bought 25 years ago the overall cost was about $11,000.

If some catastrophe happened we'd sell it to someone else or Disney.

It was about as zero risk as something gets.

 

[DonMacGregor]

The other thing about “the market” is that brokers tend to list it by *what passes* not by *what sells*. The latter is “the market”.

This is PRECISELY what I said in the ROFR thread.

 

[sndral]

Describe how it was "risky." Our payments were about $100 a month. We accelerated our payments and paid it off early. We were both working. We just didn't want to dip into savings to pay it off right away. Because we bought 25 years ago the overall cost was about $11,000.

If some catastrophe happened we'd sell it to someone else or Disney.

It was about as zero risk as something gets.

A lot has changed w/ DVC in the intervening 25 years. I remember the threads of buyers seeking advice of what to do because they owed more than they could sell their contracts for & they could no longer afford the monthly payments from the ‘08 era. I think a new buyer financing today faces more risk than a buyer 25 years ago faced.
Using your numbers w/ an inflation calculator your $100 monthly payment in 1998 (25 years ago) should be $179 today. Your $11,000 buy in should be $19750 in today’s money.
Yet, if someone bought direct today 150 points @ $200 per point, that’s $30,000 w/ 10% down on a 10 year @ 10% loan that’s $350+ per month + $100 per month for MFs, so $450 per month. DVC’s price is more expensive now even factoring in inflation than it was a quarter century ago.
If today’s buyer is impacted by one of the mass layoffs currently happening, or some other financial change & tries to sell their contract they might be in a world of hurt - first because the resale market is saturated w/ listings so it might take several months to sell & second because resale prices are low. Say they sold at $120 pp (the most recent price on a Riv contract in the ROFR thread) - they’d get $17250 after commission, but depending on how long they’d owned - let’s say they’d paid their principal down to $25,000 - that’s $7,750 they’d need to pay to get rid of that monthly DVC payment.

 

[FreeTime]

If you owe, say $20K on a listing, would you sell it for $19K, knowing that you will have to pay thousands to close? I am not sure your example is that anyone is being unreasonable, in fact, sounds like they were being very upfront as to why they couldn't go lower than a certain number. As someone who just sold and someone who's been bought many contracts, I see both sides. The comments lately seem to have some very aggressive attitudes in regards to buying and seem to get angry when a seller isn't willing to discount 50% or to a super below market price offer. The brokers aren't the ones making up the prices, the market it - market price is just that, market price. Sure, they may come down more and probably will, but for right now if market price is say, $100 pp, I would say it is unreasonable to make an offer at $50 pp and get upset that you aren't getting what you want. Buyers and sellers can only go off what is selling NOW, not what it "may" be in 6 months or for sellers, what it WAS 6 months ago.

I don’t think that walking aware on a price that I deem as unreasonable is aggressive nor am I angry about their decision. If I were needing to unload it and it would cost me to get out of it, I certainly would do so. I agree with your example that it is unreasonable to offer 50% of what they are seeking - no point in offering and wasting anyone’s time. I also do not need to know their reason for not accepting an offer. It isn’t any of my business and will not sway my decision one way or the other.

 

[Noles235]

This is PRECISELY what I said in the ROFR thread.

One specific broker I contacted is not handling price declines well. Wonder what was told to the seller to get them to list their contract.

 

[Stank]

One specific broker I contacted is not handling price declines well. Wonder what was told to the seller to get them to list their contract.

Sounds like we aren’t close to a bottom in the DVC market if brokers who deal with this on the daily have such visceral reactions to price normalization.

People acting like being offered 98 cents on the dollar is such a rip off when they’re unaware tomorrow it could easily be 70 cents.

As someone noted before, perhaps in a different thread, they sold a contract a couple months ago that today has a $20 lower fair market value. At the time it seemed like a “meh” deal for a sale; today, it was one heck of a move by the seller. For the people that think being offered $145 on a $150 contract is low balling, sit tight; you might be willing to take $120 in a few months. That’s what happens when sellers are reluctant to sell at $145 but jump at $120. Chasing pennies to risk losing a fair offer in a market saturated in supply. Not exactly privy moves by brokers or sellers.

 

[Stank]

A lot has changed w/ DVC in the intervening 25 years. I remember the threads of buyers seeking advice of what to do because they owed more than they could sell their contracts for & they could no longer afford the monthly payments from the ‘08 era. I think a new buyer financing today faces more risk than a buyer 25 years ago faced.
Using your numbers w/ an inflation calculator your $100 monthly payment in 1998 (25 years ago) should be $179 today. Your $11,000 buy in should be $19750 in today’s money.
Yet, if someone bought direct today 150 points @ $200 per point, that’s $30,000 w/ 10% down on a 10 year @ 10% loan that’s $350+ per month + $100 per month for MFs, so $450 per month. DVC’s price is more expensive now even factoring in inflation than it was a quarter century ago.
If today’s buyer is impacted by one of the mass layoffs currently happening, or some other financial change & tries to sell their contract they might be in a world of hurt - first because the resale market is saturated w/ listings so it might take several months to sell & second because resale prices are low. Say they sold at $120 pp (the most recent price on a Riv contract in the ROFR thread) - they’d get $17250 after commission, but depending on how long they’d owned - let’s say they’d paid their principal down to $25,000 - that’s $7,750 they’d need to pay to get rid of that monthly DVC payment.

Yeah, exactly. DVC is not a cheap product and budgets are even more constrained today than in the past. Buying DVC a quarter century ago was an entirely different dynamic vs. today. Projecting the success of DVC from inception to present onto the next 25 years is a mistake. I would say it’s very likely to be a breakeven/lose money net-commission/fees proposition when looking strictly at contract price.

Which still makes it a decent deal for a timeshare. Breakeven/lose a bit is a fair deal—I just think DVC owners have become accustomed, like homeowners, to “make money” on their consumer good. It’s become part of the psyche.

 

[Matty B13]

As someone who sold there VGF contract in October of 2022 when VGF was listed around $185/190 point on most brokers sites, I was more than willing to negotiate with a buyer who started at $163/point. We ended up at $165/point because we could see this coming and wanted to unload the contract........ Now VGF is at $145 and dropping.

I think a lot of sellers are in for a rough couple of years moving forward and might have to sell at a loss. After all fees, we ended up losing roughly $1000 on the contract, which means we paid $1000 for these points from 2016.

 

[luvdisneyland]

Well, that’s an interesting take given DVC resale prices have ALREADY collapsed $40-70pp in the past year given the resort—-the deepest fall in DVC history. It’s like you’re showing up after halftime of the Super Bowl unaware the kickoff you’re watching isn’t the start of the game, but halfway through it. It’s rather perplexing so many in the DVC community maintain this, “Oh, shucks, we just don’t know what will happen, doomsayer!! Ah-yuck!” Completely ignoring Grand Cal is $230pp when months ago it was $300. Or that BLT is now $140 list when it was $190-200 in 2022. I find it interesting BLT prices have already backed off and fallen an additional $5pp in the past week alone.

I may be new here, but I’m not new to DVC. And I’m not hoping someone gifts me DVC for free. I’m just pointing out how it’s funny BLT has fallen from $190 to now $140 and the apocalypse isn’t here….yet if I so much as suggest it falls $140 to $100pp, why, that’s the end of the world!! A timeshare going for $20k instead of $30k—-what a shock!! What’s more, that $20k timeshare is being “given” to me at $20k. Sheesh…sounds like a car dealer when you offer $20k for something that Blue Books for that and they cry and make it seem like you’re taking their leg.

I’d like to say “we’ll see what happens” but I’m afraid we’re already seeing what’s happening: DVC prices are cratering and supply is 2,700 listings, or 4x normal. Soooo…where’s this demand swooping in to stabilize the market? How do DVC prices stabilize and go up with 4x the supply of listings?? Because prices have already cratered and supply is superabundant, and really we haven’t had desperate selling levels with people losing jobs en masse.

I just have this strange feeling all the people thinking I’m preaching the end of times would’ve had the same take one year ago if I suggested BLT would be $140pp in February 2023. I have to laugh, because I’m sure plenty would wager their contract that wouldn’t be the case…in which case, yes, I suppose that would be giving me DVC for free.

Prediction: BLT is lower one year from today. I’ll say BLT will be closer to $100pp than it’ll be to today.

According to the board sponsors stats, the price is down just over 12% from last year- not exactly a crash. It is still a sizable discount and a great time to buy.

 

[Stank]

According to the board sponsors stats, the price is down just over 12% from last year- not exactly a crash. It is still a sizable discount and a great time to buy.

BLT from $190 to $140; VGC from $300 to $225. So for a 200 point contract you’re looking at $10-15k loss. If that’s not a crash, I suppose you could say the resale incentives have been solid, and appear to be getting better.

 

[Stank]

As someone who sold there VGF contract in October of 2022 when VGF was listed around $185/190 point on most brokers sites, I was more than willing to negotiate with a buyer who started at $163/point. We ended up at $165/point because we could see this coming and wanted to unload the contract........ Now VGF is at $145 and dropping.

I think a lot of sellers are in for a rough couple of years moving forward and might have to sell at a loss. After all fees, we ended up losing roughly $1000 on the contract, which means we paid $1000 for these points from 2016.

Yeah, new car loans and home mortgages are 6-7% right now. I don’t see how or why DVC prices recover and rise in the next few years. Car loans are already 72 months. Cell phones are now 36 months. I think we’ve just about stretched out the payment plans as far as we can, and now with rates going up, those 72 month car loans are getting significantly more expensive.

There’s only so much room in people’s budgets. DVC gets squeezed out when you’re paying for these other priorities.

 

[AnnaKristoff2013]

Had I said BLT would be $140 several months ago, you’d roll your eyes and
dismiss it.

No. The fact that the resale marker was ludicrously overpriced and would crash/correct was foreseen by many on this board.

 

[AnnaKristoff2013]

If some catastrophe happened we'd sell it to someone else or Disney.

It was about as zero risk as something gets.

That’s why it was risky. There was never a guarantee that Disney wouldn’t end up like every other timeshare. You could have ended up severely underwater on your high interest loan.

 

[AnnaKristoff2013]

BLT from $190 to $140; VGC from $300 to $225. So for a 200 point contract you’re looking at $10-15k loss. If that’s not a crash, I suppose you could say the resale incentives have been solid, and appear to be getting better.

You keep quoting things like BLT at $190 like that was the median price as few months ago. It wasn’t. Not even close.

 

[tom1944]

You keep quoting things like BLT at $190 like that was the median price as few months ago. It wasn’t. Not even close.

I was moderately following BLT since late November and I recall sales were generally in the mid to high 160’s.

 

[jodifla]

That’s why it was risky. There was never a guarantee that Disney wouldn’t end up like every other timeshare. You could have ended up severely underwater on your high interest loan.

Again, we had the cash to pay it off. We just aren't people who tap into savings. We typically have one thing we are financing at a time. We were very clear-eyed on the process and it worked out EXACTLY like we thought.

And it was 10 grand, not 30 grand or 50 grand. Which was the benefit of buying 25 years ago.

The DVC market goes up and down. It's smart to buy when it's lower, wouldn't you agree?