Resale market cooling down?

[Nabas]

FWIW, I haven't seen any slowdown or lowering of prices in the recorded sales. Volume is up at all resorts, and prices are up sharply at all resorts except BWV, which is a tiny bit down.

Obviously the recorded deeds are about two months out of date, so it's possible we're seeing the slowdown in the listings now, and it'll show up in the recorded deeds in a couple months.

As you note, deeds represent what was happening in the market about 2 months ago.

I've been closely following the sales market for a while. Compared to 2 months ago, asking prices are up about 10% at VWL and BCV, flat to down very slightly every place else. However, inventories as a whole are up 50%. Some resort inventories are up more than others but available inventories are up across-the-board at all WDW resorts.

As with so much, higher inventory typically leads to lower prices.

We are entering the slow season for real estate and some modest decline is to be expected as fewer shop for vacations this time of year while DVC owners look to sell their memberships before next year's MF are due. Again, inventory should increase, demand decrease.

However, we can't accurately use what's happening right now to predict one way or the other what's going to happen next spring. It really comes down to how many potential DVC buyers enter the market in 2014.

 

[SFlaDisneyfans]

I have started tracking the inventory contracts for sale at TSS in this thread
(http://www.disboards.com/showthread.php?t=3190522). Inventory stock has been slowly increasing.

 

[luckyman_apd]

If that were to happen (which I don't think it will), I'd stock up on points at that price. Until the US economy crashes again I don't think we are going to see any significant reductions like that.

Plus shouldn't that be right about the time the Poly DVC comes out causing another spike in direct/resale prices.

At it's core, the two things that effect the resale market are the supply of contracts and the value those contracts provide.

This spring we saw a real lack of supply of resale contracts, there were times that BWV and BCV only had 3-5 contracts listed between all the major brokers. With no supply it allows sellers to increase their price, provided the value is still there. The result of that was the BWV/BCV contracts took a large jump in price, because even at those new prices, buyer saw the value in owning the contract. Now some owners see the increase in price and think that this might be a good time to sell, so the amount of listed contracts increase, but the prices don't go down because those sellers are not desperate to sell. Prices only go down when sellers are desperate or the value is no longer there. So until you see a lot more desperate sellers or the value of owning the contract decreases we aren't going to see major reductions in price.

This....exactly. The market drop and the 2011-2012 prices were a direct result of desperate sellers who couldn't afford to keep them, and a flood of supply. It worked well for me. I watched several contracts come and go and was able to grab one that was absolutely perfect for us at a price of $10 per point less than now ($15 to $20 higher I saw listed recently) and that's IF you could find that UY as it don't see it listed often. After we bought and my brother started to consider it, the prices had jumped beyond his comfort zone. It really is about supply and demand. If there is a big supply and no demand, prices will drop.

I think the supply dried up as the economy is no longer rock bottom, and demand definitely increased with the addition of VGF. I do agree disney resort rack rates will play a factor as well. Our decision to buy in was definitely a factor of price/value vs moderate resorts. Unless dues start to increase at a rate far above resort price increases i don't see the resale market falling out again. But in the end who really knows. I'm comfortable and happy with my purchase

 

[Nabas]

I always thought the resale market took off in 2013 right about the time Disney announced 'free tickets' for any direct purchase at BWV. In response, BWV resale prices jumped as Disney quickly sold out of points available directly. Then in March (?), Disney announced an across-the-board direct price increase at all WDW DVCs, which rippled into the secondary market as buyers tried to lock in at old prices. Suddenly, there were waiting lists at many of the resorts and Disney went ROFR crazy to fill those orders, driving prices up further. It was the kind of ROFR activity we hadn't seen in years.

I'm not sure that VGF played much into this. If anything, it seemed to me this was deferring some purchases; in other words, those waiting to buy in at VGF. This appeared to have been reflected in VGF's first month or two of activity.

I do think prices were driven down in 2011-12 by other market activity, beyond what was happening in the economy in general.

SSR (opened 2004), AKV (2008), and BLT (2009) more than doubled the number of DVC rooms available. Timeshares, including DVC, tend to be impulse purchases. By 2011, a lot of those who had bought impulsively at these resorts were having second thoughts and wanted to sell, flooding the resale market with inventory, driving prices down everywhere.

IMHO, which way prices go in 2014 will depend on how many DVC impulse buyers remain who might be looking to sell in 2014.

With VGF and the Poly DVC being significantly smaller than SSR, AKV, and BLT, the number of impulse buyers looking to sell should decline over time and, long term, the DVC resale market should see more stability until the next financial crisis.

 

[BWV Dreamin]

My predicition...the next price increase for VGF will all but keep resales prices high. Once Poly is announced, resales prices go even higher.

 

[moran66]

I highly doubt we will see any DVC contracts in the 40$ range other than VB or HHI anytime soon. I mean you might see a few sneak in in the 50s again but not the 40s.

 

[Mississippian]

My opinion is that the GF buzz was largely responsible for the increased activity and prices. I expect them to cool off a little then go back up with the Poly. After that they should cool off again back to where one would have expected them to be with the passage of time and before the increases in the last year or so. Of course other changes could affect this as well such as any additional restrictions on resale points or other programs such as possible extension offers.

Dean, I haven't posted here in a while, but I don't need to. You always say exactly what I think!