Should we wait for recession?

[RaymOOOnd]

If there's a recession, I'm putting my cash into stocks. Seems to me that pixie dust is probably more recession proof than the emotionless S&P 500, and so I'm guessing that the deeper discount will sit with the latter.

At the relentless rate of DVC price increases your market timing would need to be quite impressive (lucky) for your idea to really work

 

[Marv_barr]

Thanks for your first hand experience with the January dip! Good thing that's not our only reason to hold off for a few months. I really appreciated the feedback though. Do you think this year was different because of Riviera?

Looking at small contracts, I'm finding OKW to be the best "value" Direct instead of Resale. As in, if I HAD to purchase Direct, I would do it at OKW. $156 for extended contracts direct, and only 50 point minimum. Small contracts are at a premium on the Resale market and these small OKW extended contracts are hard to come by! I did see a 50 pointed extended resale for $125 today!! That's not typical though, I'm seeing the 2042 contracts and with higher price per point for these smaller contracts (14% savings considering price per point per year) plus higher closing costs than direct...equals about 10% less if purchased resale instead of direct. I do like saving money, but I'm also feeling the original posters FOMO for the blue card. Obviously an additional 25 direct points would need to be purchased for the "legit" card. All this would be completely different for a family looking for 200 points. Larger contracts on the Resale market are a great deal. Our family doesn't need that though. You asked a quick question and I gave you a long winded answer. Thanks for reading. Thoughts?

We are from Windsor, Ontario area and just bought 75 direct at OKW for the same reasons. We have been researching for the last 2 years and have debated everything from a Vero contract to just keep on renting.We only wanted a small contract because that is all we could pay for. If you buy direct do forget to include the points that current UY points.

 

[Dtw002]

Timing a recession assumes you take the cash out now and put in your mattress. And then miss the next x years of the market improving. If you think you can time a recession, take that mattress $$ and invest in the stock market after it drops - much better then investing in a timeshare.

It takes a lucky and brave person to invest in a timeshare when your 401k is half of what it was; neighbors are getting foreclosed; you are wondering if next. Much easier to pay a slight premium now while all is good - and you can pay cash.

 

[Jkarrows]

Yes you could wait for a recession, we have a similar issue n the UK with the Pound to Dollar rate being so bad, 2-3 years ago it was around 1.5 dollars to the pound, now its down to 1.2, does not sound much difference but when your buying a large DVC contract it can run into thousands of pounds more.

So a 30000 Dollar contract for example 3 years ago would have cost a UK buyer 20000 pounds, now it will cost currently 25000 pounds and increase of 5000 UK pounds just because of our poor exchange rates at present.

Now you could wait for the rate to go up like you could wait for a recession but the price today may not be the price next time and with DVC points prices going up you may find what you save if you waited has gone as the price per point has gone up.

As example when people brought into for example Beach Club, the price per point when first opened in 2002 was 84 dollars you try getting a resell for this price it just does not happen.

So my point is if you wait for a recession you may find that DVC price point in the time you wait has gone up meaning you may end up paying less or you may end up paying more.

You just have to buy what you are comfortable with.

Good luck.

 

[suemom2kay]

So true. We go 8-10 times a year and have only been to one Moonlight Magic event. And while it was fun, you could simply pay $150 per person and get something similar in the form of the extra magic parties or whatever they are calling them now.

DAH is 95-125 and you get an “empty” park. Moonlight Magic looks pretty crowded and tough to nab even if offered during your stay.

 

[quandrea]

I don’t believe in putting anything off in life. If you can responsibly afford dvc now, and you want it now, buy it. Why delay?

 

[Marionnette]

Real life reason not to delay - in mid-2017, I purchased a fully-loaded VGF contract for $149/pt. That was a Dec UY with all 2015 points (and no 2015 dues) banked into 2016, and all 2016 points. Today, that same contract would be listed at about $50/point more than what I paid two years ago. And we have not gone into a recession yet, at least not officially.

You can try to time a recession and may get a good deal. Or you can buy that perfect contract now and enjoy your purchase immediately.

 

[jackieleanne]

Definitely don't wait especially if you go to DW often and like staying in Deluxe. I wanted to buy in back in 2008 back when I took my husband to be on his very first trip to the world. It was $2 to the £ back then so I could have got an amazing deal plus the price per point even direct was a lot lower back then than it is now. I have on so many trips we have taken over the year thought about buying in, especially after we stayed at AKL for one night in 2012 before the rest of our trip at AOA...Needless to say we always want to stay deluxe now and I've finally purchased AKL via resale back in April.

Don't wait if it's something you really want, you never know if it will happen and also what will happen if one does hit.

 

[jarestel]

There are reasons to buy resale or direct and it's important to understand what you want from a DVC membership before signing on the dotted line. If your primary purpose is saving money, then obviously resale will be the way to go. And as long as you realize you are only buying the opportunity to make a reservation at a DVC resort(s) for the next xx number of years, all is fine. However, buying resale and then complaining about feeling like a second class citizen for being excluded from other benefits would be admitting you made a bad decision.

For potential direct members who probably will take price into consideration but are mainly interested in being able to enjoy every aspect of a DVC membership, direct makes sense. Of course, all benefits "could" go away at any time, but until DVD stops building new DVC resorts, I expect that they will continue to add perks and benefits for direct members in order to establish as much daylight between resale and direct as possible.

I don't advocate either position since not everyone has the same expectations of a DVC membership. It's extremely important to understand what you want from your membership before committing the time and expense to owning DVC.

 

[DougEMG]

If I was waiting for a recession to come along, what I would do is compare the cost of buying right now and then renting out the points each year against what the prices would have to fall in order to determine which is a better option.

For example: Buy BLT now for $145.

Year 1 - rent for $18/point and MF of $6.4, net income of $11.60 - BLT needs to drop down to under $133.40 to make waiting a better deal.

Year 2 - rent for $18/point and MF of $6.91 (8% increase for 2020), so net income of $11.09, total income of $22.69 - BLT needs to drop down under $122.3 to make waiting a better deal.

Year 3 - rent for $18/point and MF of $7.29 (5.5% increase for 2021), so net income of $10.71, total income of $33.40 - BLT needs to drop under $111.6 to make waiting a better deal.

So use whatever numbers you think for renting, MF increases, length of time till a recession and recession price drops and you can come up with a very rough estimate of which option to pick. And if things turn out different you can at least tell yourself that you made the best decision possible at the time.

 

[mustinjourney]

Good info.

Quick question, what resort are you looking at that is only a 10% discount from direct prices?

Also regarding the January dip, while that has been a trend for most of the past five years, last year prices actually ticked up in January. It was very unexpected. I actually sold a contract in November in anticipation of the dip and was rewarded for my brilliance by prices going up another 10%.

I wouldn't beat yourself up too much -- so many random things happened in January that would have been impossible to predict.

1. Resale restrictions implemented -- a lot of buyers jumped off the fence in order to get in before the resale restrictions went into effect. In essence it shifted the demand curve and ate up all the supply.

2. Disney increased direct pricing (direct pricing can act as an anchor for pricing purposes). It also might move someone that would have purchased direct to purchase resale -- which increases resale demand, and therefore pushes prices higher.

3. Disney changed rules regarding UYs -- this allowed Disney to start filling waitlists more easily -- so their ROFR activity went way up. Increased ROFR activity resulted in resale purchasers raising their offers.

 

[mousemagic00]

I wouldn't beat yourself up too much -- so many random things happened in January that would have been impossible to predict.

1. Resale restrictions implemented -- a lot of buyers jumped off the fence in order to get in before the resale restrictions went into effect. In essence it shifted the demand curve and ate up all the supply.

2. Disney increased direct pricing (direct pricing can act as an anchor for pricing purposes). It also might move someone that would have purchased direct to purchase resale -- which increases resale demand, and therefore pushes prices higher.

3. Disney changed rules regarding UYs -- this allowed Disney to start filling waitlists more easily -- so their ROFR activity went way up. Increased ROFR activity resulted in resale purchasers raising their offers.

What was the change to use year?

 

[Bing Showei]

What was the change to use year?

UY used to be married to the unit from which a contract came.

For example, it used to be that Unit 01A at VGF is an April UY. If Disney wanted to sell to a buyer a March UY add-on, they would not be able to take a ROFR’d Unit 01A contract and make it a March UY. They would have to wait to acquire, by way of ROFR or foreclosure, a Unit 1I, Unit 07B, or Unit 08A derived contract. So it meant people would sit for months/years waiting for the right contract at the right price, to be either bought back by Disney, or foreclosed upon.

With the new change mustinjourney alluded to, Disney can now take that 01A contract (or any contract that comes across its desk) and change it to a March (or any other) UY to sell it to a waiting buyer.

This now makes price and demand the only two variables Disney has to consider when buying back a contract, and as a result, ROFR rates went up.

 

[ELMC]

I wouldn't beat yourself up too much -- so many random things happened in January that would have been impossible to predict.

1. Resale restrictions implemented -- a lot of buyers jumped off the fence in order to get in before the resale restrictions went into effect. In essence it shifted the demand curve and ate up all the supply.

2. Disney increased direct pricing (direct pricing can act as an anchor for pricing purposes). It also might move someone that would have purchased direct to purchase resale -- which increases resale demand, and therefore pushes prices higher.

3. Disney changed rules regarding UYs -- this allowed Disney to start filling waitlists more easily -- so their ROFR activity went way up. Increased ROFR activity resulted in resale purchasers raising their offers.

Thanks, and I agree with all these reasons and probably more. I made the best decision with the information I had at the time. That's the best you can do.

 

[bookwormde]

There will likely be some bargains if the econommy turns down despite ROFR.. Last turn down I picked up 210 OKW at $45. I was sure disney would take it but they did not

 

[Helvetica]

It's a question I wrestle with a lot too. If the blue card is something that you care about, then you have to buy direct or at least get a 75 point add-on. If you have a larger family, the Gold Membership could save you a lot of money in the long run.

One thing I've been thinking about is getting a smaller contract direct and then getting more points resale. That way, I can still get the perks of direct while saving money on a resale contract. The big fear for me is the resale restrictions at Rivera and the potential for a recession in the near future.

I kind of wish that I would have bought at Cooper Creek when it first opened because I absolutely love the resort and they had some nice promotions at the time, but I just wasn't ready at that time. It's a lot of money to put down.

 

[MBTigger]

It's a question I wrestle with a lot too. If the blue card is something that you care about, then you have to buy direct or at least get a 75 point add-on.

As a potential first time buyer the ability to reserve at newer resorts as they become available is more important than the perks / blue card. This is the only thing that makes me think about buying direct....

 

[ELMC]

As a potential first time buyer the ability to reserve at newer resorts as they become available is more important than the perks / blue card. This is the only thing that makes me think about buying direct....

This is exactly what Disney was going for when they put the restrictions in place.

That said, this is the third round of restrictions and the first two likely did not have the impact they had hoped for. Will this be the one?

 

[Bing Showei]

This is exactly what Disney was going for when they put the restrictions in place.

That said, this is the third round of restrictions and the first two likely did not have the impact they had hoped for. Will this be the one?

I can’t help but wonder why Disney didn’t up the incentives more, rather than take the benefits away; make it so that buying direct is a better deal without impacting ownership value.

I’m sure the short answer is “bottom line,” but I just can’t help but feel like devaluing the product vs. incentivizing a direct purchase is shortsighted and sacrifices a lot of goodwill.

 

[chalee94]

As a potential first time buyer the ability to reserve at newer resorts as they become available is more important than the perks / blue card. This is the only thing that makes me think about buying direct....

Where are these newer resorts going to be located, do you think?

Seems like most of the best locations are already taken.