Resale listing prices have dropped

[tjkraz]

Animal Kingdom hasn't been under 145 per point direct from Disney for several years. There are a ton of AKL resale listings. I am asserting that SOME of those people who are listing their AKL for $80 or less bought in at prices above $140.

That's certainly true. But the market is driven more by sellers who CAN afford to take less. A seller isn't going to get $120 if there are many others asking $75. As long as there are significant numbers willing to sell for +/- $75, most sellers are forced into that price range.

The fact that it's been a while since AKV was offered in the $90s is meaningless. Not all sellers are short-term owners. Direct pricing was in the low $90s for years. Thousands of owners bought millions of points at that rate. And after 5-6 years of ownership, those individuals can easily sell for $75 per point and still come out ahead.

Look at resale pricing on each of the resorts and it's pretty easy to see similar trends. SSR, BLT, VGC, AKV, BCV, BWV...all of those resorts display resale pricing trends within a small margin of lowest direct pricing, with some adjustments based upon supply and popularity.

With the possible exception of Vero and Hilton Head, no DVC resort has had a prevailing resale price which was half its lowest direct price.

Not now...not during a recession. And given the popularity and anticipated small size of the Poly DVC, I wouldn't expect it to be the first to buck that trend. If (when) the next recession hits, it will be the high supply / low demand / short contract properties which are hit hardest.

 

[Dean]

Animal Kingdom hasn't been under 145 per point direct from Disney for several years. There are a ton of AKL resale listings. I am asserting that SOME of those people who are listing their AKL for $80 or less bought in at prices above $140.

Sure, some people bought AKL for less than $100, but not everybody. It's these people I'm focussing my analyses on.

If there are people who paid $145 for AKL and are selling them for $75 resale, then it's entirely possible that people who pay $160 for Polynesian will be willing to sell for $80 in a few years.

I'm not saying it will be immediate, I'm saying it will be during the first recession of the 2017-2021 president's term. We've had recessions during every president's term: George Bush recession 1991-1992, Bill Clinton dot-com bubble recession 2000-2002, George W Bush Real Estate Bubble recession 2007-2009, Barack Obama recession still hasn't happened but I'd be shocked if we go 8 years without a recession.

At some point after Poly has been on sale for a few years there will be a recession and THAT is when I will be picking up the pieces of people's shattered dreams for pennies on the dollar!

No doubt people paid what they paid and will sell for around the going price if offered publicly IF they sell. Some of those would have bought earlier, some later and some resale. However, I think it's not really an apple to apples comparison looking at the Poly. VGF, BCV and BLT are far better comparisons that is AKV. VWL also has some relevance but not as much I don't believe and one might make the same argument for BCV. To me the real question for the Poly and similar is not so much what the prices are but how they compared to other DVC resorts looking at resale. Depending on specifics, it should end up comparable to either VGF or BLT or more likely, somewhere in between. There are some variables we don't yet know like size, unit types and points cost for the rooms that will affect the prices and demand. Put another way, if the Poly is selling at $80 on the open market, AKV will be about $35-40 & SSR will be roughly $30.

 

[Nabas]

If there are people who paid $145 for AKL and are selling them for $75 resale, then it's entirely possible that people who pay $160 for Polynesian will be willing to sell for $80 in a few years.

Location, location, location.

AKV is not a good analogy for the Poly DVC. BLT and BCV are better comparisons.

BLT resale asking price is averaging $105/point.

BCV resale asking price is averaging $98/point.

Disney learned some lessons with AKV.

They can't simply build anything anywhere. In many ways, AKV is WDW's most beautiful and thematically immersive resort. Yet its direct sales have been struggling for years.

Disney learned location and size matters.

It's why the 2 most recent DVCs are being added on the Monorail.

It's why VGF and the Poly will be 2 of WDW's smallest DVCs.

Admittedly, I'm up there in years but I doubt I'll ever see the Poly DVC below $100/point in my lifetime.

P.S. Maintenance Fees and points-per-night matters too. When you take these into account, VGF is one expensive resort!

Generalizing, consumers buying resale tend to be cost conscious. (After all, that's the main reason to buy resale.) I have doubts how VGF will perform on the resale market once direct sells out.

 

[DVCcurious]

However, I think it's not really an apple to apples comparison looking at the Poly. VGF, BCV and BLT are far better comparisons that is AKV.

But if I use VGF, BCV, or BLT as my comparison it will destroy my entire argument! So I'm sticking with AKL as it "proves" my point.

Put another way, if the Poly is selling at $80 on the open market, AKV will be about $35-40 & SSR will be roughly $30.

Dean predicted it first! AKV for $40 in a few years!


I see what you guys are saying with all the positives (location, Poly's theme, etc) but I think you aren't taking the negatives seriously. I think you are way overestimating the number of potential DVC buyers still on the sidelines. Less than 10 years ago there were like 4 WDW resorts: OKW, VWL, BWV and BCV right? Once Poly opens there's going to be like 10 resorts: AKV, BCV, BWV, OKW, SSR, VWL, BLT, GFV, Poly. Has the pool of potential owners really doubled in the past 10 years? And this is just the number of resorts, if you include DVC rooms as your basis we've well more than doubled, and maybe even tripled the number in the past 10 years. I don't have the room counts handy, but SSR and AKV are huge and much bigger than VWL, BWV, and BCV.

So if supply has tripled and demand has remained consistent.....and if Disney used to sell their points for $100 per point (you guys say they have sold BLT and AKV for $100 or less after incentives).... I mean let's think this through. Disney will always charge the maximum price they can manage that will still move its product at a reasonable rate. People on this site used to predict $200 PP for Poly, now I'm seeing $160. That's a pretty big drop on the prediction. Disney sold BLT for up to $160, wouldn't you think that VGF would be more than BLT? It's a smaller DVC and a "better" resort as its Disney's Flagship WDW resort. But if Disney is charging LESS for VGF than they did for the peak BLT price doesn't that tell you something about the pool of potential buyers still out there? And if you add that information into the "fact" that $100 was the max price they could get up until 2009 or whenever....and if the Supply side has increased since 2009 but Demand has remained constant....why on earth should we expect prices to remain above $100 for any length of time?

If you take these factors into account: Supply tripling, demand staying consistent, previous max price the market would accept at $100 per point.....how can you draw any conclusion outside of "At some point prices will revert to the mean and Poly will be less than $100 resale?"

I'm sticking with my $80-$89 prediction. We will see Poly Resale for below $90 once the first Clinton/Christie/Cruz/Warren/Ryan/Pelosi/whoever recession hits.

 

[KAT4DISNEY]

But if Disney is charging LESS for VGF than they did for the peak BLT price doesn't that tell you something about the pool of potential buyers still out there?

I don't believe that indicates anything other than BLT is sold out and if a buyer wants that resort it is because they really, really, really want it or it's an add on from a current owner and it has been priced with that consideration. DVC wants to sell their current resorts rather than "sold out" ones. It also gives them an appearance of a discount when they have otherwise not offered one at all for VGF.

And Poly at $80/pt? Not for a long time or under very extraordinary circumstances - perhaps ones that would make you not want to buy at all. AKV may have had a base price of $145 for many months but that was not the actual sales price with incentives. And as was pointed out once a contract hits the resale market it there is no difference between those that were directly purchased last week for $140/pt or those that were purchased 4 years ago for $90/pt. And just to show the difference in AKV costs and one reason why you see such a lower cost for a resort that is not that old - our base purchase price for a small AKV contract was $96/pt but there were multiple incentives that equated to me attributing an actual cost at just under $68/pt. So - I'd be far more willing to sell AKV at $80/pt than any Poly points I had bought for $150 or $160/pt. DVC has done some very steep increases in prices in the past couple of years and I wouldn't look for the types of prices on the newest much smaller resorts as has been seen for the one time much lower cost and much larger resorts.

 

[DVC Dude]

At some point after Poly has been on sale for a few years there will be a recession and THAT is when I will be picking up the pieces of people's shattered dreams for pennies on the dollar!

You really should consider changing your name to "DVCvulture" as you are one of the most doom and gloom bearish people here.

I will go on the record and state that you will NOT find a DVC Poly for $80pp in the next ten years or possibly ever.

Also, stripped contracts MUST add at least $10pp to the contract as the contract is worthless or even has negative value as compared to a non-stripped contract.

DVC Poly should be compared to VGF and VGC only as BLT is too large and AKV is a totally different animal.

 

[PacoDF]

Also, stripped contracts MUST add at least $10pp to the contract as the contract is worthless or even has negative value as compared to a non-stripped contract.

I'm not sure I got you on that part. Can you further explain on stripped contracts?

Thank you!

 

[Dean]

But if I use VGF, BCV, or BLT as my comparison it will destroy my entire argument! So I'm sticking with AKL as it "proves" my point.



Dean predicted it first! AKV for $40 in a few years!


I see what you guys are saying with all the positives (location, Poly's theme, etc) but I think you aren't taking the negatives seriously. I think you are way overestimating the number of potential DVC buyers still on the sidelines. Less than 10 years ago there were like 4 WDW resorts: OKW, VWL, BWV and BCV right? Once Poly opens there's going to be like 10 resorts: AKV, BCV, BWV, OKW, SSR, VWL, BLT, GFV, Poly. Has the pool of potential owners really doubled in the past 10 years? And this is just the number of resorts, if you include DVC rooms as your basis we've well more than doubled, and maybe even tripled the number in the past 10 years. I don't have the room counts handy, but SSR and AKV are huge and much bigger than VWL, BWV, and BCV.

So if supply has tripled and demand has remained consistent.....and if Disney used to sell their points for $100 per point (you guys say they have sold BLT and AKV for $100 or less after incentives).... I mean let's think this through. Disney will always charge the maximum price they can manage that will still move its product at a reasonable rate. People on this site used to predict $200 PP for Poly, now I'm seeing $160. That's a pretty big drop on the prediction. Disney sold BLT for up to $160, wouldn't you think that VGF would be more than BLT? It's a smaller DVC and a "better" resort as its Disney's Flagship WDW resort. But if Disney is charging LESS for VGF than they did for the peak BLT price doesn't that tell you something about the pool of potential buyers still out there? And if you add that information into the "fact" that $100 was the max price they could get up until 2009 or whenever....and if the Supply side has increased since 2009 but Demand has remained constant....why on earth should we expect prices to remain above $100 for any length of time?

If you take these factors into account: Supply tripling, demand staying consistent, previous max price the market would accept at $100 per point.....how can you draw any conclusion outside of "At some point prices will revert to the mean and Poly will be less than $100 resale?"

I'm sticking with my $80-$89 prediction. We will see Poly Resale for below $90 once the first Clinton/Christie/Cruz/Warren/Ryan/Pelosi/whoever recession hits.

I think it's possible but not likely for some time. Of course it will happen eventually if they stay with the RTU format. IF it happens in the relatively near future, you'll see a representative decrease across the board along the lines that I pointed out. The pool of DVC owners is only a relatively small sliver of the total visitors to Disney over a few years period so the pool of potential owners is essentially all of those visitors including those who own already. Just like GF, there are those out there that would only buy DVC if it were at the Poly. The general pool of potential buyers and current owners only matters if they simply want points. Those that specifically want the Poly won't be overly affected by the rest of the demographics.

DVC has a history of early discounts for new sales. Historically they've price it at X then offered maybe a $10-15 discount in reconstruction sales. With the GF they took a different approach and applied that discount internally rather than mark it up then discount it. One of the reason that timeshares discount pre-construction is they use those funds to complete the project rather than financing so much.

I'm not sure I got you on that part. Can you further explain on stripped contracts?

Each point has a value and a stripped contract has less points so less value. There are several ways to value those points. In general I've used either $10 per point for any point I had to pay the dues on in some way OR dues plus $5 a point. I've generally counted any point not usable or reasonably rentable as not there. I've also generally ignored current but banked points that would expire in a few months as having little or no value.

 

[z28wiz]

I sold one of my contracts recently because I was able to sell with a nice profit. I'm certainly tempted to sell a few more contracts were I can make a profit on the sale. So while I'm a seller, I'm a seller only if the price is right and I'm probably not the only one doing that. If prices drop back down to 2011/2012 prices I'll turn back into a buyer, but I don't think we'll see any significant drop in prices until the US goes into a recession.

Yeah I did the same. I bought a few contracts right before the boom and flipped six contracts for a nice profit. I was one of the first ones listing the super high prices and they were grabbed within 48 hrs.

Sent from my iPhone using DISBoards

 

[McCrae]

Animal Kingdom hasn't been under 145 per point direct from Disney for several years. There are a ton of AKL resale listings. I am asserting that SOME of those people who are listing their AKL for $80 or less bought in at prices above $140.

Sure, some people bought AKL for less than $100, but not everybody. It's these people I'm focussing my analyses on.

If there are people who paid $145 for AKL and are selling them for $75 resale, then it's entirely possible that people who pay $160 for Polynesian will be willing to sell for $80 in a few years.

I'm not saying it will be immediate, I'm saying it will be during the first recession of the 2017-2021 president's term. We've had recessions during every president's term: George Bush recession 1991-1992, Bill Clinton dot-com bubble recession 2000-2002, George W Bush Real Estate Bubble recession 2007-2009, Barack Obama recession still hasn't happened but I'd be shocked if we go 8 years without a recession.

At some point after Poly has been on sale for a few years there will be a recession and THAT is when I will be picking up the pieces of people's shattered dreams for pennies on the dollar!

If you are going to regularly take a holiday at Disney am not sure your idea is so smart.

If you rent points you will be paying around $14 per point per year.....

Going direct you will pay even more.

When you add these costs up on annual basis any savings you would make would be marginal at best under your scenario.

When we bought DVC spoke about a 7-8 year pay back period based on savings using DVC against regular rates.

We bought in 09, already we would have spent more on lodgings than the initial investment we made in BLT.... And we still have 50 years left on our contract.

IMO waiting/ taking the chance you will buy resale cheaper a few years down the road nay not be the sure thing you imply.

 

[tjkraz]

If you take these factors into account: Supply tripling, demand staying consistent, previous max price the market would accept at $100 per point.....how can you draw any conclusion outside of "At some point prices will revert to the mean and Poly will be less than $100 resale?"

One of my favorite timeshare sayings is this: "Timeshares aren't bought, they're sold." (Thanks, Brian.)

Timeshares are not a product where people wake up in the morning and say "I'm going to buy a timeshare today!" Instead it's a product that someone else has to convince you to buy.

In that vein, trying to pass judgement on "demand" for DVC is nearly impossible. Demand is a function of how aggressively Disney is able to build and market the concept to approximately 110 million people who walk into a Walt Disney World or Disneyland theme park every year. Construction didn't increase because demand rose...construction increased because Disney decided to build more and subsequently convince more of its park guests to buy.

Of greater relevance is the fact that only a tiny percentage of Disney park guests are DVC owners. Again, 110 million people entering those parks every year. Disney hasn't cited DVC owner figures in some time but it's definitely under 1 million....probably closer to 500,000.

Will resale prices be hurt during the next economic crisis? Of course. But it would be wrong to suggest that each resort will be impacted similarly. SSR, OKW and AKV are likely to be among the hardest-hit. Supply and demand suggests that resorts like BLT, VGF and Poly will see a lesser impact due to lower supply and broader appeal.

Even as the pool of DVC resale buyers shrinks, there's no guarantee that the pool of buyers specifically interested in Poly or GF is going to shrink.

 

[twinsouvenirs]

Just saw two VGF contracts (small, fully loaded) for about $135 a point--so a $10/20 drop within two months of open. Not that this will be the case with Poly but it is possible. I'd be tempted but the title fees aren't cheap and the use years aren't ideal for us In actuality I'm waiting for a decline in prices and I'll snag 50-150 pts someplace at $65 or less.

 

[tjkraz]

Just saw two VGF contracts (small, fully loaded) for about $135 a point--so a $10/20 drop within two months of open.

I hope you're not suggesting there's something abnormal about those numbers.

Of course resale is lower-priced. Always has been and always will be. Direct purchases have the full weight of Disney's marketing muscle. Personalized tours with free transportation...refreshments...child care...glossy brochures...easy financing...ability to make immediate reservations...lower closing costs.

Plus inclusion of the Disney Collection, Adventurer Collection and Concierge Collection. Not the most useful options in a practical sense but these features are enough to entice many buyers.

A $10-15 resale price disparity always exists.

 

[rkold]

I hope you're not suggesting there's something abnormal about those numbers.

Of course resale is lower-priced. Always has been and always will be. Direct purchases have the full weight of Disney's marketing muscle. Personalized tours with free transportation...refreshments...child care...glossy brochures...easy financing...ability to make immediate reservations...lower closing costs.

Plus inclusion of the Disney Collection, Adventurer Collection and Concierge Collection. Not the most useful options in a practical sense but these features are enough to entice many buyers.

A $10-15 resale price disparity always exists.

And don't forget, a DVC guide can sometimes get you reservations otherwise unavailable for your first booking. I know that is what tipped the scale for us into deciding to buy.

 

[DVCcurious]

Timeshares are not a product where people wake up in the morning and say "I'm going to buy a timeshare today!" Instead it's a product that someone else has to convince you to buy.

In that vein, trying to pass judgement on "demand" for DVC is nearly impossible.

First, EVERY product "is not a product where people wake up in the morning and say "I'm going to buy XXXX today"!"

Sure you HAVE to buy food, but what type of food are you going to buy? Coke is spending millions and millions of dollars to "convince you to buy" a Coke with your lunch. Buffalo Wild Wings is spending millions of dollars to "convince you to buy" their wings when you decide what to eat today. Yes you need food, but someone needs to convince you to buy their food. As for everything other than food: you don't need a TV, computer, phone, etc. Someone had to "convince you to buy" that product. That's what advertising is all about.

Now let's talk about your second comment: "In that vein, trying to pass judgement on "demand" for DVC is nearly impossible."


I may not know a lot, but I know a lot about economics. EVERY product has an estimable demand. I guarantee Disney knows precisely what demand for DVC is every price point and with every promotion they can offer.

Let me put it to you another way: If passing judgement on "demand" for DVC is nearly impossible.....then the logical question is: How does Disney figure out how to price their product? Price is a function of Supply and Demand, and if it's impossible to estimate Demand then you would have no way to figure out the price point.

 

[rlovew]

But if I use VGF, BCV, or BLT as my comparison it will destroy my entire argument! So I'm sticking with AKL as it "proves" my point.

So in other words you have decided instead of listening to any reason you will use something that everyone would agree is not logical at all as your basis for logical reasoning. You do see that is like a child sticking his fingers in his ears and making noise just because he doesn't like the answer.

 

[Minniesgal]

First, EVERY product is not a product where people wake up in the morning and say "I'm going to buy XXXX today"! Sure you HAVE to buy food, but what type of food are you going to buy? Coke is spending millions and millions of dollars to "convince you to buy" a Coke with your lunch. Buffalo Wild Wings is spending millions of dollars to "convince you to buy" their wings when you decide what to eat today. Yes you need food, but someone needs to convince you to buy their food. As for everything other than food: you don't need a TV, computer, phone, etc. Someone had to "convince you to buy" that product. That's what advertising is all about. Now let's talk about your second comment: "In that vein, trying to pass judgement on "demand" for DVC is nearly impossible." To put it simply: you are completely, totally, incorrect. I may not know a lot, but I know a lot about economics. EVERY product has an estimable demand. I guarantee Disney knows precisely what demand for DVC is every price point and with every promotion they can offer. Maybe you don't have the skills to estimate DVC demand but there are people out there who Disney pays handsomely to do exactly that. Hell I think I could do a decent enough job if you gave me some statistics and a little time.

And yet Disney are frequently surprised by demand. I have heard they have been taken by surprise at the tailing off in sales if VGF. People may try and predict timeshare demand but it is never going to be a precise science.

 

[Minniesgal]

Animal Kingdom hasn't been under 145 per point direct from Disney for several years. There are a ton of AKL resale listings. I am asserting that SOME of those people who are listing their AKL for $80 or less bought in at prices above $140. Sure, some people bought AKL for less than $100, but not everybody. It's these people I'm focussing my analyses on. If there are people who paid $145 for AKL and are selling them for $75 resale, then it's entirely possible that people who pay $160 for Polynesian will be willing to sell for $80 in a few years. I'm not saying it will be immediate, I'm saying it will be during the first recession of the 2017-2021 president's term. We've had recessions during every president's term: George Bush recession 1991-1992, Bill Clinton dot-com bubble recession 2000-2002, George W Bush Real Estate Bubble recession 2007-2009, Barack Obama recession still hasn't happened but I'd be shocked if we go 8 years without a recession. At some point after Poly has been on sale for a few years there will be a recession and THAT is when I will be picking up the pieces of people's shattered dreams for pennies on the dollar!

AKV was selling in 2012 for $125 a point with incentives offered to lower the price. Polynesian is a different product to AKV. AKV is huge with a huge number of points sold and available to be resold so no real shortage plus Disney is still selling direct. Polynesian is predicted to be much smaller. Look at VGC selling resale for high prices and you will see how unlikely it is to get the Poly hugely reduced for. Direct prices.

 

[DVCcurious]

So in other words you have decided instead of listening to any reason you will use something that everyone would agree is not logical at all as your basis for logical reasoning. You do see that is like a child sticking his fingers in his ears and making noise just because he doesn't like the answer.

Nope, I think I'm being entirely reasonable here. Now clearly I'm alone on an island but I'll try to explain my reasoning.

What I'm doing is trying to predict future prices in light of a future recession. What everyone else is doing is saying "BLT prices are still above $100!" and they're completely ignoring the fact that we have the Booming economy right now. We have record high stock prices and skyrocketing housing prices with massive employment growth.

What happens to resale prices during the next recession? That's my point. In the next recession you will see prices drop significantly, just like after the housing bubble burst that caused our most recent recession.

Assuming that our economy will stay this strong in the future is completely illogical.

 

[tjkraz]

First, EVERY product is not a product where people wake up in the morning and say "I'm going to buy XXXX today"!

There are fundamental differences the marketing of consumer goods vs. the marketing of a 50-year RTU timeshare with a 5-figure price tag.

I may not know a lot, but I know a lot about economics. EVERY product has an estimable demand. I guarantee Disney knows precisely what demand for DVC is every price point and with every promotion they can offer. Maybe you don't have the skills to estimate DVC demand but there are people out there who Disney pays handsomely to do exactly that. Hell I think I could do a decent enough job if you gave me some statistics and a little time.

Unfortunately you don't know much about the history of Disney Vacation Club.

In your prior posts you have made repeated factual errors regarding price points. You are simply making guesses regarding construction dates of resorts, number of rooms and even buyer attitudes.

Disney certainly does know a lot about their market...but they are not omniscient. I could easily point to times in their history when buyers did not respond favorably to pricing or specific resorts...and other times when buyers leaped at offers with unexpected enthusiasm. DVC went through a period of about 18 months when they had absolutely nothing to sell because the combination of increased marketing activity and buyer-friendly prices lead to brisk sales.

In a prior post, you stated that over the last several years supply has tripled but demand has remained constant. What is your measure for DVC demand?

What I'm doing is trying to predict future prices in light of a future recession. What everyone else is doing is saying "BLT prices are still above $100!" and they're completely ignoring the fact that we have the Booming economy right now. We have record high stock prices and skyrocketing housing prices with massive employment growth.

Again, your lack of historical perspective is showing.

Between 2008 and 2011 direct prices for BLT ranged from $112 per point down to the low $90s. Resale prices settled in the low-$90s. Even during the worst of the recession.

At worst, resale represented a loss of 20% for buyers who purchased direct at the highest price points.

BLT direct prices didn't reach $165 per point until the 2nd half of 2012 when it was on the verge of being "sold out."