Resale Vs. Direct a little behind.

[rccomputers]

I guess I have just not been keeping up. I was looking at resale prices and they seem IMHO to be depressed from what they were.

I know the benefits of buying resale changed recently and that is probably the case. Is there a thread that compares the benefits of buying resale vs buying direct?

My home resort OKW was selling at 80-85 before the change, now it is around 60. DVC Direct is selling at 100 for an add on.

Just want to compare to see if I feel that it is worth going direct.

Thanks!

 

[erionm]

From the member website:

New Policy Announced for Re-sale Purchases

Disney Vacation Club® has announced a new policy that limits access to certain Member Getaways exchanges for Ownership Interests purchased on the secondary market (also known as the re-sale market).

Under the new policy, Members who purchase from anyone other than Disney Vacation Development, Inc., on or after March 21, 2011, will not be eligible to use those Vacation Points to make reservations within the Concierge Collection, the Disney Collection or the Adventurer Collection. Those Vacation Points will instead be valid only for reservations at Disney Vacation Club resorts, as well as for RCI® exchanges, Club Cordial and Club Intrawest.

The affected collections are special Member benefits programs offered by Disney Vacation Development, Inc., and are not part of Members' Ownership Interests. That said, Members who purchased on the secondary market prior to March 21, 2011, may use those Vacation Points for all Member Getaways.

Note that the policy doesn't impact banking, borrowing or transferring Vacation Points. All Members will continue to have the ability make such transactions, regardless of where they purchased their Ownership Interests. Complete rules about these transactions are available in the Home Resort Rules and Regulations section of this website.

 

[JimMIA]

My home resort OKW was selling at 80-85 before the change, now it is around 60. DVC Direct is selling at 100 for an add on.

Actually, resale prices were dropping steadily for more than a year before the change was announced. If anything, prices went UP in the two-month runup to the actual change date. Even then, right before the change date, I'm sure a LOT of OKW owners would have jumped at an offer to sell for $60.

Very small contracts are selling for $60. Frankly, I think you could get a 100-pointer in the $40's if you are patient and stick to your price.

And a year from now...who knows?

 

[rccomputers]

So do you think that the price change is more related to the economy or the changes made by disney?

I have never personally made a trade, I have always found it less expensive to pay cash and rent my point to cover the costs of paying cash. So the change to the rules really doesn't deter me from adding on with a resale contract.

I was wondering if there is a loophole if you need extra points and you have a non-resale contract and you need some more points to cover a reservation?

 

[JimMIA]

So do you think that the price change is more related to the economy or the changes made by disney?

My personal ranking would be:

1. Most important -- lack of ROFR activity for more than a year
2. Also important -- the economy. I think the economy actually may have been more important in DVC having to eat a bunch of foreclosures and givebacks than with the resale market.
3. Relatively UNimportant - the new restrictions on resale points for new buyers. IMHO, the new restrictions shouldn't hurt resale prices, because the things lost are of marginal, if any, value in the first place.

I also don't think the resale prices ever fully adjusted to either the lack of ROFR or the economy. Because it's Disney, I think DVC demand is insulated at least a little from economic cycles.

 

[rccomputers]

I am clear on 2 and three but what does ROFR activity have to do with it?

Right of First Refusal only applies if Disney wants the points back.

Are you saying that people are lowering thier price and Disney doesn't care anymore? With what they are selling direct, resales are probably like a flea on a dog anyway.

 

[JimMIA]

I am clear on 2 and three but what does ROFR activity have to do with it?

Right of First Refusal only applies if Disney wants the points back.

Are you saying that people are lowering thier price and Disney doesn't care anymore? With what they are selling direct, resales are probably like a flea on a dog anyway.

ROFR is the main prop supporting resale prices. Lack of ROFR results in falling resale prices, often to very low levels.

The classic example is resale prices of BWV. DVC is currently trying to sell BWV and BCV for $115 per point I believe. But in 2011, with no ROFR activity, BWV is selling pretty regularly for BELOW $50 per point...more than $65 per point lower than Disney's direct price.

Who would have ever thought BWV would sell for $46-$48 per point, much less clear ROFR at those prices?

 

[disneynutz]

My personal ranking would be:

1. Most important -- lack of ROFR activity for more than a year
2. Also important -- the economy. I think the economy actually may have been more important in DVC having to eat a bunch of foreclosures and givebacks than with the resale market.
3. Relatively UNimportant - the new restrictions on resale points for new buyers. IMHO, the new restrictions shouldn't hurt resale prices, because the things lost are of marginal, if any, value in the first place.

I also don't think the resale prices ever fully adjusted to either the lack of ROFR or the economy. Because it's Disney, I think DVC demand is insulated at least a little from economic cycles.

I don't know if "eat" is the correct word. To me "eat" is a negative thing when in reality Disney took back contracts, put the points back in their pot, and resold them at a higher price. If they didn't profit from give backs, they wouldn't do it.

Bill

 

[TisBit]

I don't know if "eat" is the correct word. To me "eat" is a negative thing when in reality Disney took back contracts, put the points back in their pot, and resold them at a higher price. If they didn't profit from give backs, they wouldn't do it.

Bill

They don't have a real option in the give backs. It is less expensive to take the contract back than to deal with a foreclosure, so if they refused to take it back...the person would just stop paying and Disney would have a lot more expenses with foreclosing.

You have to keep in mind that while they can repackage and resell them, they need someone to buy them. Right now BLT is the only game in town at WDW when it comes to buyers. It is why they stopped trying to sell the other resorts unless someone specifically requests them. While those contracts sit, they have to try to fill those rooms through CRO which is extremely hard to do and the loss of dues will affect DVD's bottom line, because they have to make up for any shortages in the operating budget for the contracts they are sitting on (a little complicated here, as they don't have to pay MF's unless they go into the red, if I am not mistaken).

 

[csharpwv]

That's why I REALLY don't understand why they seem to be moving forward with the Villas at the Grand Floridian. It makes no sense to have THREE resorts with unsold points, why do they seem to be moving forward with yet ANOTHER project?

They have been banging the gong on 'BLT is going to sell out RIGHT NOW!!!!!' for MONTHS!

I attended a presentation on the Disney Wonder in February, and they said it was going to sell out before summer. Then in May they were saying it would sell out before the end of June. Then it is GOING to SELL OUT before the end of JULY!!!!!!!! And NOW - it is going to sell out before the END OF SUMMER! BUY NOW!!!!!!!!!! PLEEEEEASE! BUY NOW!

It's getting a little annoying.

I think that the more villas they build, the harder they are going to have to market what isn't sold - and what isn't sold is what is going to end up costing them the most in the end.

Saratoga needs to have a clearance sale! It doesn't seem that they can GIVE it away! I say that figuratively - however, before that crank the price of BLT up to $150 per point, they need to remember they have AKV, SSR, Aulani, and seemingly another resort preparing to break ground.... If it hasn't already!

In my opinion, that is one of the things that is driving the price of resales down - is that supply is much higher than demand. There are thousands of contracts sitting on the secondary market, in addition to all of the CRO inventory - yet they are building.... again?

It makes so sense at all to me.

Am I the only one thinking that the Villas at the Grand Floridian might be a game changer in terms of pricing, and perks? It is Disney's 'flagship' resort - I'm sure they have something very exclusive up their sleeves.

 

[sweetdana]

Right now BLT is the only game in town at WDW when it comes to buyers. It is why they stopped trying to sell the other resorts unless someone specifically requests them. While those contracts sit, they have to try to fill those rooms through CRO which is extremely hard to do and the loss of dues will affect DVD's bottom line, because they have to make up for any shortages in the operating budget for the contracts they are sitting on (a little complicated here, as they don't have to pay MF's unless they go into the red, if I am not mistaken).

If they lowered the price of BC, BWV, and WL to the price of BLT, SSR, or AK.. (incentives, or lower price per point) I bet they sell more.
As a buyer I like BC more than BLT.. and why would I pay more (no incentives) for less yrs? If they wanted to sell the other resorts they could I am sure there are people who like BWV, and WL more than SSR and BLT that have the same opinion as me.

 

[Granny]

They have been banging the gong on 'BLT is going to sell out RIGHT NOW!!!!!' for MONTHS!

Disney does this at all resorts. They wore out a couple of gongs trumpeting the near sell-out of VB for about 4 years!

 

[rccomputers]

It's always nice to catch up on my DVC education once in a while.

With prices where they are, I may just decide to pickup another contract. I have had 300 points at OKW for about 11 years now and have used them to my hearts content both on property and renting to go other places. IMHO even with the GF getting built, I don't think it will hurt our little rental market.

Thoughts on that?

 

[rotlex]

Interesting thread. For someone like me, who has been on the fence with buying DVC for maybe 3 years now, it keeps looking better and better. I really can't believe the cost of points on the resale market. I'd be kicking myself if I bought Kidani back when I first took the tour. Heck, it's at the point where if I bought now, I'm saving 4-5K, and it seems to keep going lower!

Problem is, I'm not really sure how long to wait now. I have the cash kind of burning a hole in my pocket, but I keep thinking I should wait "just a bit longer", and see where things are end of this year\early next year.

 

[TisBit]

That's why I REALLY don't understand why they seem to be moving forward with the Villas at the Grand Floridian. It makes no sense to have THREE resorts with unsold points, why do they seem to be moving forward with yet ANOTHER project?

They have been banging the gong on 'BLT is going to sell out RIGHT NOW!!!!!' for MONTHS!

I attended a presentation on the Disney Wonder in February, and they said it was going to sell out before summer. Then in May they were saying it would sell out before the end of June. Then it is GOING to SELL OUT before the end of JULY!!!!!!!! And NOW - it is going to sell out before the END OF SUMMER! BUY NOW!!!!!!!!!! PLEEEEEASE! BUY NOW!

It's getting a little annoying.

I think that the more villas they build, the harder they are going to have to market what isn't sold - and what isn't sold is what is going to end up costing them the most in the end.

Saratoga needs to have a clearance sale! It doesn't seem that they can GIVE it away! I say that figuratively - however, before that crank the price of BLT up to $150 per point, they need to remember they have AKV, SSR, Aulani, and seemingly another resort preparing to break ground.... If it hasn't already!

In my opinion, that is one of the things that is driving the price of resales down - is that supply is much higher than demand. There are thousands of contracts sitting on the secondary market, in addition to all of the CRO inventory - yet they are building.... again?

It makes so sense at all to me.

Am I the only one thinking that the Villas at the Grand Floridian might be a game changer in terms of pricing, and perks? It is Disney's 'flagship' resort - I'm sure they have something very exclusive up their sleeves.

You have to keep in mind that GFV's are not "right around the corner", the construction phases will mean that it is a couple of years away from actual sales. After BLT, they will focus back on AKV and what they might have left at SSR. I don't believe that SSR has a ton of points, but most likely they most in foreclosures because of the timing of its sales (right before the economic collapse).

As others have said, they will always be just around the corner of selling out on a resort to help people off the fence. But, for the most part they have not used it in their sales advertising until relatively recently...other than that it has been used by guides in presentations or at annual meetings.

GFV's will have a similar draw as BLT. Their presence on the monorail will make a lot of people want to buy there. Then don't be surprised when you see the Poly come up. I am not sure they will really look at building anymore standalone DVC resorts at WDW, but if they do I think they will look for prime real estate to do it on. I figure if Sales at GFV start around 2013-2014....at least a couple of years of sales, putting it more at 2016 for sell out. Figure around that time they have a Poly come in and it sell out by 2020...after that the plan may be going back to the 2042 resorts and figuring out a way to repackage/resell them with new end dates and not have to find a new location.

If they lowered the price of BC, BWV, and WL to the price of BLT, SSR, or AK.. (incentives, or lower price per point) I bet they sell more.
As a buyer I like BC more than BLT.. and why would I pay more (no incentives) for less yrs? If they wanted to sell the other resorts they could I am sure there are people who like BWV, and WL more than SSR and BLT that have the same opinion as me.

I don't believe there is a huge market for these resorts and it can be a distraction to new buyers. DVC has always held the concept that if you really want BC or BW, you will come knocking to get it. I could see them exploring new pricing options for these resorts now that they have implemented the resale restrictions. Before, it would have been counter productive to attempt to compete with the resale market. I think they are still testing the waters and really if there are more inquiries for going to direct with the older resorts, they will likely figure out what the tipping point might be for direct sale prices.

 

[rccomputers]

The classic example is resale prices of BWV. DVC is currently trying to sell BWV and BCV for $115 per point I believe. But in 2011, with no ROFR activity, BWV is selling pretty regularly for BELOW $50 per point...more than $65 per point lower than Disney's direct price.

Who would have ever thought BWV would sell for $46-$48 per point, much less clear ROFR at those prices?

Jim - I mostly pay attention to our fourm sponsor and have purchased successfully from them in the past. Where are you finding BWV at below 50 Per point, I would sure jump on that deal to add on.

 

[treehugnmama]

Op I bought 100 okw pt add om before the change for 55$ a point. I got in right before the change

 

[JimMIA]

Jim - I mostly pay attention to our fourm sponsor and have purchased successfully from them in the past. Where are you finding BWV at below 50 Per point, I would sure jump on that deal to add on.

I got that info from the ROFR thread.

 

[chrisbarry]

It's always nice to catch up on my DVC education once in a while.

With prices where they are, I may just decide to pickup another contract. I have had 300 points at OKW for about 11 years now and have used them to my hearts content both on property and renting to go other places. IMHO even with the GF getting built, I don't think it will hurt our little rental market.

Thoughts on that?

I'm curious how renting at other places has been for you. We just took the tour at WDW, finally, after 10 family trips! One of our concerns was trading out to other places. How difficult has that been for you? We're interested in Disney World, obviously, but every once in a while, we want to trade out. One of our favorite places to ski in Vermont is listed on the RCI list, and that was selling us the club even more, but how hard has it been to book elsewhere?
Thanks,

Chris