Riviera Resale Values

[striker1064]

Yep. How much impact is a good question. Do they want to roll those dice.

Even with the pandemic DVC reopened ROFR in Sept after a few months of values dropping. Resale value was just one factor in that decision but probably important. Were they gagging when Poly was reselling at $120pp?

So do they allow resale values to organically settle themselves... or actively try to guide the resale/direct market into some kind of balance?

@CastAStone did some excellent research a while back showing lack of foreclosures was much more likely to be the reason for DVC to start exercising ROFR again. DVC had no foreclosures replinishing its supply of sold out resorts, so they had to ROFR just to have stock to sell. It's entirely possible, but I really don't think DVC execs were suddenly sweating a slight drop in resale values. And prices didn't drop as much as one might expect given the economy and pandemic. There were countless posts here of people complaining that they were expecting lower resale prices but the market actually had something of a weird surge, largely because there just wasn't that much stock available for sale.

I don't mean to attack everything you say, but the data simply doesn't back it up.

 

[CastAStone]

@CastAStone did some excellent research a while back showing lack of foreclosures was much more likely to be the reason for DVC to start exercising ROFR again. DVC had no foreclosures replinishing its supply of sold out resorts, so they had to ROFR just to have stock to sell. It's entirely possible, but I really don't think DVC execs were suddenly sweating a slight drop in resale values. And prices didn't drop as much as one might expect given the economy and pandemic. There were countless posts here of people complaining that they were expecting lower resale prices but the market actually had something of a weird surge, largely because there just wasn't that much stock available for sale.

I don't mean to attack everything you say, but the data simply doesn't back it up.

Yes, between the suspension of foreclosures (a depressingly steady stream of points for Disney in normal times!) and Disney flat out telling people who were trying to buy points for sold out resorts “no, sorry, we can’t take your money because we’ve run out of points”, there’s no doubt in my mind that ROFR restarted to simply be able to make the sales they were being asked for.

I’ve never seen a shred of evidence that Disney is using ROFR to prop up prices. They are using ROFR to turn a profit. They buy everything priced below 50% of direct except for the 3 resorts they are still in active sales on. They don’t buy anything priced about 2/3rds of direct. And anything in between they base on demand. If nothing is coming up at 2/3rds or less of direct, they start a wait list.

 

[DVC Doctor]

I’ve never seen a shred of evidence that Disney is using ROFR to prop up prices. They are using ROFR to turn a profit.

100% correct, not other explanation make sense. Disney, and all other timeshares, really don't care too much about propping up resale prices.

 

[Heather07438]

@CastAStone did some excellent research a while back showing lack of foreclosures was much more likely to be the reason for DVC to start exercising ROFR again. DVC had no foreclosures replinishing its supply of sold out resorts, so they had to ROFR just to have stock to sell. It's entirely possible, but I really don't think DVC execs were suddenly sweating a slight drop in resale values. And prices didn't drop as much as one might expect given the economy and pandemic. There were countless posts here of people complaining that they were expecting lower resale prices but the market actually had something of a weird surge, largely because there just wasn't that much stock available for sale.

I don't mean to attack everything you say, but the data simply doesn't back it up.

Totally makes sense looking at it that way. Is there a point they would care? When I think about differnt angles involved, hard not to think it would be in their interest to protect resale from dipping too deeply. But these are great points being made that Direct doesn't care to even notice.

So I tried to take a quick peek at what happened in the aftermath of 2009. This pandemic period ended up not hurting the segment of potential DVC buyers like that recession did. There was a significant dip in resale value back then that looks to be left alone and rebounded a few years later, apparently on its own.

That's also kinda supporting that idea DVC doesn't really get involved with resale pricing. But I'm having a hard time over-riding my instinct that they care and have good reason to, lol. Like if there was a way to find out if resale price documents float around with purpose in management offices, I'd have to fight myself not to take the bet they do

ETA, for the record, I will not take that bet now!

 

[EM Lawrence]

I think it would be interesting to understand the effect that resale brokers have on propping up the prices of DVC resale. I don’t think their involvement is neutral.

 

[CastAStone]

I think it would be interesting to understand the effect that resale brokers have on propping up the prices of DVC resale. I don’t think their involvement is neutral.

DVCRM is very aggressive in pushing their sellers to ask for higher prices when supply is constrained, and since they’re the largest reseller, it echos through the marketplace. I’ve seen it happen a few times in the last year.

 

[Starport Seven-Five]

DVCRM is very aggressive in pushing their sellers to ask for higher prices when supply is constrained, and since they’re the largest reseller, it echos through the marketplace. I’ve seen it happen a few times in the last year.

coughAKLcough

 

[New Mouse]

Whoa...take a deep breath. I never said it was a legal term. It absolutely is my opinion. Replace "spirit" with "purpose" if that makes you feel better. The general purpose of a timeshare is that it is a way to save money on vacations. When you are talking to a DVC guide to buy a contract, do they every tell you that the points could/should be rented out every year to make money? Do they every tell you that "this is a great investment opportunity...you can rent out your points every year and make money on your contract"? No, they don't. Because that isn't the purpose of DVC or any timeshare (i.e. it goes against the "spirit" of what the timeshare is meant to be). Like you said, the owner has the right to use it as he/she sees fit as an owner. But when things happen that negatively impact renting points (like covid in 2020), those that bought DVC strictly to rent the points can't be complaining because that's not the purpose of DVC. Or if DVC incorporated a rule stating that owners can't rent points two years in a row (for example), those same owners who bought DVC with the sole intention of making money off the rentals have no room to complain. And if they did complain I would roll my eyes. Because that isn't the purpose, or "spirit", of why to buy into DVC.

Actually yes the guides can and do say these things. Their job is to sell the contract, they could care less about the spirit of dvc and whether you sell ever year so long as they get their comission.

 

[DVCSunDevil]

Actually yes the guides can and do say these things. Their job is to sell the contract, they could care less about the spirit of dvc and whether you sell ever year so long as they get their comission.

Interesting. We spoke to a DVC guide (really nice guy) when we were getting serious about DVC. My one pre-purchase worry was if I would want to take a WDW vacation every year. The guide knew this and didn’t even bring up renting, I had to ask about it. The guide conceded that renting is an option for those years in which I can’t make the trip, but the guide focused more on banking points to the next year rather than renting. The guide mentioned the risk associated with renting and said it should pretty much be done only in cases where I won’t be able to bank the points. Not exactly a promotion of renting points, per your example.

I actually felt bad when I decided to buy resale because my guide was such a nice guy.

 

[AdamsMum]

Resale values are relevant only if you intend to sell in the future. I don't intend to sell so resale values don't affect me.

I didn't buy with the intention of selling either, but it is comforting to know my contracts are still worth more than I paid for them. I've had more than my initial cost in value since I first bought in 2007 and I've never bought an AP so my value wasn't in the perks.

 

[DVC Doctor]

I actually felt bad when I decided to buy resale because my guide was such a nice guy.

That is a common phenomenon, but you would have felt much worse if you spent way more money buying direct knowing how much you could halved saved buying resale

 

[CastAStone]

Interesting. We spoke to a DVC guide (really nice guy) when we were getting serious about DVC. My one pre-purchase worry was if I would want to take a WDW vacation every year. The guide knew this and didn’t even bring up renting, I had to ask about it. The guide conceded that renting is an option for those years in which I can’t make the trip, but the guide focused more on banking points to the next year rather than renting. The guide mentioned the risk associated with renting and said it should pretty much be done only in cases where I won’t be able to bank the points. Not exactly a promotion of renting points, per your example.

I actually felt bad when I decided to buy resale because my guide was such a nice guy.

This is my understanding of exactly how they are supposed to handle a renting discussion.

 

[ValW]

They buy everything priced below 50% of direct except for the 3 resorts they are still in active sales on

If this is true, then I just squeaked by - LOL! I passed ROFR for a BCV contract at $120 p/point on 1/14 - the same day the price increased to $245!!

 

[CastAStone]

If this is true, then I just squeaked by - LOL! I passed ROFR for a BCV contract at $120 p/point on 1/14 - the same day the price increased to $245!!

Nice! That’s surprising so congratulations!

 

[havoc315]

Hi all,

Given the resale restrictions, but taking into account the increasing purchase costs, what’s the view of the resale values at Riviera in 10, 15, 20 or 25 years time?

The resale restrictions will be less relevant over time, as the majority of resorts will become restricted.
The “maximum” effect of the resale redirections will be in the NOW and near future. And right now, re-sale at Riviera is about the same as other resorts: 30-40% less than direct.
In 20-25 years, the resale restrictions will likely be irrelevant to the Re-sale pricing.

 

[Mrs p]

The resale restrictions will be less relevant over time, as the majority of resorts will become restricted.
The “maximum” effect of the resale redirections will be in the NOW and near future. And right now, re-sale at Riviera is about the same as other resorts: 30-40% less than direct.
In 20-25 years, the resale restrictions will likely be irrelevant to the Re-sale pricing.

I suspect the ‘reduction’ for resale restrictions could be reflected in the initial direct price?

 

[pangyal]

If this is true, then I just squeaked by - LOL! I passed ROFR for a BCV contract at $120 p/point on 1/14 - the same day the price increased to $245!!

Yep, us too- we passed for BCV at $114/pt right before the increase as well. It’s like they just stamped “passed“ on all of the BCV contracts on their desks, as I don’t think we had any taken back per the ROFR thread for months. It’s so odd that they would hike the price and then not want bargain points to buy back for inventory.

 

[havoc315]

I suspect the ‘reduction’ for resale restrictions could be reflected in the initial direct price?

Yes, that too. Without the restrictions, even the direct price might be a little higher.

There was excessive concern when the restrictions were announced, that they would make re-sale worthless. But being restricted to one of WDW’s nicest properties is hardly worthless. Lots of people buy and primarily stick to their home resort anyway.
Of course restrictions diminish the value, but as you indicated, this may already be reflected somewhat in the direct pricing. And even if resale at Riviera is affected 5-10% more than other properties, it’s a rather minor factor.

 

[Mrs p]

Yes, that too. Without the restrictions, even the direct price might be a little higher.

There was excessive concern when the restrictions were announced, that they would make re-sale worthless. But being restricted to one of WDW’s nicest properties is hardly worthless. Lots of people buy and primarily stick to their home resort anyway.
Of course restrictions diminish the value, but as you indicated, this may already be reflected somewhat in the direct pricing. And even if resale at Riviera is affected 5-10% more than other properties, it’s a rather minor factor.

Just odd that they would intentionally devalue the product up front - even if it’s a long term plan I agree if it’s a small add on but not sure about large contracts with resale restrictions - they might be hard to sell down the line.

 

[havoc315]

Just odd that they would intentionally devalue the product up front - even if it’s a long term plan I agree if it’s a small add on but not sure about large contracts with resale restrictions - they might be hard to sell down the line.

No, drives up the product value long term, from their perspective. Drives up the value of direct purchase over resale. They don’t care if they devalue resale. Point is to discourage resale in the long term.