Should we wait for recession?

[Brian Noble]

I don't think the list price of a resort has ever gone down, but the incentives offered have been more/less generous over time. So, in essence, yes.

That said, I'm not a fan of trying to time these things. I remember buying a large stake in a stock index fund in September of 07 after the August drop, which was just the first of many to come. I thought I was pretty smart at the time though.

Instead, I take the approach of deciding what something is worth to me. If the price is less than that, I'll buy. If not, I'll wait. I won't bother trying to find "the opportune moment."

 

[CarolynFH]

So much amazing information and opionions

QUESTION FOR ALL: would a recession LOWER/IMPACT direct pricing?

It's almost always going to be point in time though. I wish I knew about the 25 points direct when I came into the DVC game. But alas, I only had the 75 point option. I struggled with paying a $3500 premium for my direct points, but eventually did so. Now, I'm happy I got my blue card for **only** the 75 point requirement instead of the 100. If it one day goes to 150, I'm going to be saying the same thing to them as you're saying to me. Or at any point benefits could be added/removed to change that formulation as well. It's just such a crapshoot to say definitively that it's worth it or not worth it.



Or a similiar question, has Disney ever directly reduced direct pricing?

DVD reduced the direct price of Vero Beach a couple of years ago. But most of the time they manipulate incentives. Some people who bought BLT early on got free Disney cruises!

ETA VBR direct reduced from $115 to $100 pp in January 2018. https://dvcnews.com/index.php/dvc-p...ssive-price-increases-coming-for-many-resorts

 

[mom2rose&john]

I am not waiting for a recession. However, I am waiting to purchase and saving the cash and the ability to have a few years maint. fees saved so when a recession hits I will not (hopefully) be finacially overburdened.

 

[Superman1011]

A good thought and idea. I remember looking at basement prices during the financial crisis. The other posters here are accurate. We don’t know when a recession will hit. Make no mistake, it WILL hit. Could be next year. Could be 5 more years. And even then there is no guarantee it will be massively systemic.

You also have to consider ROI for your money. A recession that drops DVC prices will also drop stock prices. You’ll get way more return having cash ready to buy stocks vs DVC

 

[jkips]

If you know you want to buy in than the best course of action is to do. As others have said, recessions are notoriously difficult to predict. What there is value in doing is taking your time in finding the right contract to buy in the secondary market. There are numerous inefficiencies in terms of where similar contracts will trade and how existing points are valued. It appears that there’s some seasonality to it too where demand is highest around the beginning of the year and lowest towards the end which should affect pricing as well.

 

[Can_Dannn]

We’ve decided we want to buy direct purely for the perks - yes I fully understand they are not worth it, but I’m not buying DVC to make money- I am buying it to affect my quality of life. Being direct will have more long term benefits- much more over saving a few thousand with resale

 

[tnicks]

We’ve decided we want to buy direct purely for the perks - yes I fully understand they are not worth it, but I’m not buying DVC to make money- I am buying it to affect my quality of life. Being direct will have more long term benefits- much more over saving a few thousand with resale

Most of resale goes for around 60% less than direct, so calling it a "few thousand" seems a bit of an understatement. What direct benefits do you believe are going to make up for such a significant savings?

 

[mousemagic00]

With the new restrictions, resale vs direct takes on a new long term implication, vs simple blue card stuff.

My current take:

1. If you don’t care about perks and you are around 55+, resale is still a cheap bet. You’ll have the full original 14 to trade into so the flexible booking will standup to the test of your most active time vacationing.

2. If you are under 55, in roughly 22 years, where you can book will slowly dwindle. This is where “buy where you want to stay” will become important in the resale game. Because just like we can predict that any RIV resale will be struggling to book RIV unless you tackle at 11months.... so will staying at the dwindling options left of the original 14.

Caveat to this: If you plan on buying resale now, and selling resale when your kids are grown, or you anticipate burning out on Disney trips, then you’ll only see a theoretical loss in resale value down the line, because resale will be seeing the double hit by 2042, of less resorts available to book, and depreciation as to year’s remaining on the contract. So resale may still be your optimal bet.

3. For all age groups: New resorts resale restriction will force those resale owners into the 1 resort, effectively killing easy rental options for new resort resale people as a safety net (my bet here is lots of walking a reservation for consecutive days), and forcing do or die at 11 months to get in there.

For those people that love the “new” resort and want to use the points there and there only? You’ll get these points cheaper, because people always need to sell, so this is where I see the future chatter about 60% savings to end up.

Also:
Until this resale restriction, if you can’t make use of your points, rental is a good bet not to lose money. With full ability to trade into various resorts, you can find some person eager for them. That fallback is going to dwindle in certain resale cases - like if you will NEVER go to HI but own because it was cheaper as resale, as the 14 dwindle, those points will be slowly locked into HI by supply/demand. My guess is people who want to stay at WDW, will suddenly use their SSR, if that’s the option they have.

Plus everyone needs to remember - you will, at 7 months, have competition from any direct owned points for the original 14, both rental/personal use, as they don’t have restrictions.

So this is why the old conversation of buying resale saves all the money and the ONLY thing you lose is the blue card, isn’t going to hold up.

I think people need to look at where they are today. Your resale contract at 60% savings will likely truly reflect the loss of that savings in the future because the value will be just the home resort advantage. That’s more than fine for #1 and some in #2 and #3, depending on objective in owning DVC.

 

[tnicks]

With the new restrictions, resale vs direct takes on a new long term implication, vs simple blue card stuff.

My current take:

1. If you don’t care about perks and you are around 55+, resale is still a cheap bet. You’ll have the full original 14 to trade into so the flexible booking will standup to the test of your most active time vacationing.

2. If you are under 55, in roughly 22 years, where you can book will slowly dwindle. This is where “buy where you want to stay” will become important in the resale game. Because just like we can predict that any RIV resale will be struggling to book RIV unless you tackle at 11months.... so will staying at the dwindling options left of the original 14.

Caveat to this: If you plan on buying resale now, and selling resale when your kids are grown, or you anticipate burning out on Disney trips, then you’ll only see a theoretical loss in resale value down the line, because resale will be seeing the double hit by 2042, of less resorts available to book, and depreciation as to year’s remaining on the contract. So resale may still be your optimal bet.

3. For all age groups: New resorts resale restriction will force those resale owners into the 1 resort, effectively killing easy rental options for new resort resale people as a safety net (my bet here is lots of walking a reservation for consecutive days), and forcing do or die at 11 months to get in there.

For those people that love the “new” resort and want to use the points there and there only? You’ll get these points cheaper, because people always need to sell, so this is where I see the future chatter about 60% savings to end up.

Also:
Until this resale restriction, if you can’t make use of your points, rental is a good bet not to lose money. With full ability to trade into various resorts, you can find some person eager for them. That fallback is going to dwindle in certain resale cases - like if you will NEVER go to HI but own because it was cheaper as resale, as the 14 dwindle, those points will be slowly locked into HI by supply/demand. My guess is people who want to stay at WDW, will suddenly use their SSR, if that’s the option they have.

Plus everyone needs to remember - you will, at 7 months, have competition from any direct owned points for the original 14, both rental/personal use, as they don’t have restrictions.

So this is why the old conversation of buying resale saves all the money and the ONLY thing you lose is the blue card, isn’t going to hold up.

I think people need to look at where they are today. Your resale contract at 60% savings will likely truly reflect the loss of that savings in the future because the value will be just the home resort advantage. That’s more than fine for #1 and some in #2 and #3, depending on objective in owning DVC.

I think there are a number of assumptions being made here that I would disagree with. The largest one is that today, buying direct, much like purchasing a car, loses a very high percentage out the gate. Many of these resorts are at a 30-40% loss immediately. Now consider the value of the direct contract with the new dvc2 restrictions. Resale of new properties like RIV will most likely be less appealing in comparison to any original 14 resorts, even after the number of resorts dwindles, as being able to book at anything other than one resort provides more flexibility.

You're also not considering that the average dvc owner holds their contact for 8 years, making this conversation much less relevant for the near future.

As for renting, people will always want discounted deluxe offerings at Disney. So aside from non-wdw resorts, I see no concern or impact with being able to rent points ever.

The blue card perks just will never make up for the immediate depreciation of the contract, unless some significant discount is offered or booking advantage is introduced.

 

[Bruin_mouse]

You're also not considering that the average dvc owner holds their contact for 8 years, making this conversation much less relevant for the near future.

Not to get in the middle of this discussion, but this a myth floating around here that has been debunked by the outstanding research of @dvcsince93:

https://www.disboards.com/threads/purchased-riviera.3741731/page-5#post-60658952

 

[mousemagic00]

I think there are a number of assumptions being made here that I would disagree with. The largest one is that today, buying direct, much like purchasing a car, loses a very high percentage out the gate. Many of these resorts are at a 30-40% loss immediately. Now consider the value of the direct contract with the new dvc2 restrictions. Resale of new properties like RIV will most likely be less appealing in comparison to any original 14 resorts, even after the number of resorts dwindles, as being able to book at anything other than one resort provides more flexibility.

You're also not considering that the average dvc owner holds their contact for 8 years, making this conversation much less relevant for the near future.

As for renting, people will always want discounted deluxe offerings at Disney. So aside from non-wdw resorts, I see no concern or impact with being able to rent points ever.

The blue card perks just will never make up for the immediate depreciation of the contract, unless some significant discount is offered or booking advantage is introduced.

Blue card perks has nothing to do with the analysis above. I think they’re irrelevant and distracting from how people should think about direct vs resale, and I think DVC marketing has us focusing on the short term vs the longer term because of this.

Blue card PERKS only matters if you need something it’s currently offering for the next 3 years. If you don’t want those things, it’s fluff. Fun fluff, but fluff.

Blue card = Flexibility is what I’ve been chewing over.

What is the value of the continued flexibility of your $$$ spent extra direct, if you are planning to HOLD that contract.

You have to roll up to the downstream impact of personal behaviors/needs when purchasing. To me THIS is the bigger impact of the changes when considering resale/direct, on IF it matter to each buyer.

For example - I did consider the 8 yr hold for a contract in #2 (& #1 by default). People who are buying for the “now”, intending to sell if the end up done withDisney. For those people resale is the safe bet.

And renting - especially after 2042...but the impact will (slowly) hit as RIV resale starts - the ability to do this easily, by having the flexibility of multiple resorts to meet reservation needs goes away. People like to talk about this as a failsafe for holding these contracts if you can’t use it. This won’t hold for resale when I consider the bottlenecks/pressure Disney is building into the system.

It won’t be that people won’t WANT to rent, it will be much harder for the owner TO DELIVER that full week reservation.

If I look at it as a whole by 2042 and what age the buyer of today will be at that time ((personal to each person’s current age)) - Best use for resale will become point transfers, essentially locking you & I out of the people looking for cash rooms, and keeping DVC with DVC, and cash buyer with Disney.

This is exactly part of why Disney I bet is doing this - you won’t be able to easily undercut the rack rates, all while your MF pays for the upkeep, resale buyer or direct buyer. And the current giant rental companies will see a lot more work to undercut Disney. And those rental companies will pass that FTE work to rent our points onto us etc etc etc.

Everyone should buy for how it best works for them. For better or worse, DVC is altering the business model with 2.0 and that does change it in some interesting ways for the younger buyers that has nothing to do with perks.

 

[tnicks]

Not to get in the middle of this discussion, but this a myth floating around here that has been debunked by the outstanding research of @dvcsince93:

https://www.disboards.com/threads/purchased-riviera.3741731/page-5#post-60658952

Fair enough, I certainly was referencing information shared around these boards. I think it's a bit misleading to omit foreclosures though, since, I imagine, a great deal of contracts are lost that way. Regardless of how long someone else holds onto the deed, the more important question is how long do you realistically believe you will hold onto it. For us, that's around the 10 year mark.

 

[RaymOOOnd]

I think I'm finally going to have to admit to myself that this whole thing is just not a good value anymore. I might even be feeling insulted, the more and more I think about it.

It costs ~$30,000 for enough points to stay in a STUDIO with a nice view at Riviera for one week per year, average-cost season, you don't get great perks or anything particularly valuable for being a member, on the contrary they don't even service your room and the rooms are allowed to decline in condition compared with the cash rooms. The DVC accommodations are even segregated most of the time -- which feels like being in the second class at places like Kidani, BRV, vGF etc. On top of that, costs are, what, ~$1280 per year just in dues on the abovementioned theoretical purchase (with nowhere to go but up, up, up)??

I'm putting a little monthly reminder on my calendar to stop being drawn in by the pure emotion of this thing; since my clarity suffers when I receive things like pictures of the Riviera rooms in the mail, smiling families, garbage along the lines of "you could save $1800 if you act now!". My current points were obtained when it was still relatively affordable; I don't strictly need more. If I ever want to stay in a 2bdr at vGF for 6 nights and need to book at >7 months out, I'll spend $4000-5000 via David's and not suffer yet another long-term financial commitment.

Resale is a ripoff as well as the prices are artificially made to approach direct costs moreso than they would otherwise. We all know this but try so hard to pretend it's a decent deal. From a relative perspective, it still is ... but "relative" is an enormous word here.

I think anyone pretending that this makes financial rather than just emotional sense is doing just that: pretending.
With enough roundabout maneuvering you can make 1+1=3, if you really want to.

 

[tnicks]

I think I'm finally going to have to admit to myself that this whole thing is just not a good value anymore. I might even be feeling insulted, the more and more I think about it.

It costs ~$30,000 for enough points to stay in a STUDIO with a nice view at Riviera for one week per year, average-cost season, you don't get great perks or anything particularly valuable for being a member, on the contrary they don't even service your room and the rooms are allowed to decline in condition compared with the cash rooms. The DVC accommodations are even segregated most of the time -- which feels like being in the second class at places like Kidani, BRV, vGF etc. On top of that, costs are, what, ~$1280 per year just in dues on the abovementioned theoretical purchase (with nowhere to go but up, up, up)??

I'm putting a little monthly reminder on my calendar to stop being drawn in by the pure emotion of this thing; since my clarity suffers when I receive things like pictures of the Riviera rooms in the mail, smiling families, garbage along the lines of "you could save $1800 if you act now!". My current points were obtained when it was still relatively affordable; I don't strictly need more. If I ever want to stay in a 2bdr at vGF for 6 nights and need to book at >7 months out, I'll spend $4000-5000 via David's and not suffer yet another long-term financial commitment.

Resale is a ripoff as well as the prices are artificially made to approach direct costs moreso than they would otherwise. We all know this but try so hard to pretend it's a decent deal. From a relative perspective, it still is ... but "relative" is an enormous word here.

I think anyone pretending that this makes financial rather than just emotional sense is doing just that: pretending.
With enough roundabout maneuvering you can make 1+1=3, if you really want to.

While I hear what you're saying, I wouldn't be trying to do this if I didn't think I would make out financially. There is a loss in flexibility and services (like housekeeping), so there certainly needs to be a benefit. Running the numbers, for 160 points, I should be able to get a 1BR when I plan on going to AKV and certainly a studio essentially anywhere I can get a booking. Assuming a 4% inflation rate, going every two years and not renting any points in between, I'm projecting a per trip cost of around $1700 over 10 years after selling the contract myself. If I am able to rent my points on off years, which I comfortably believe I can but am not relying on, the cost per trip is in the negative. There are a number of assumptions in those numbers and even using doomsday scenarios, the numbers look to be around the cost of renting points from someone else and still below rack rates.

Some resorts fair worse and I never found a scenario where direct came close, but there is always an element of risk when you project 10-20 years out. So, we educate ourselves and make a judgement call. Disney is extremely expensive and if I don't believe there is a cost savings in buying into DVC, I wouldn't bother. I assume there are plenty of others who believe the same.

 

[CarolynFH]

Not to get in the middle of this discussion, but this a myth floating around here that has been debunked by the outstanding research of @dvcsince93:

https://www.disboards.com/threads/purchased-riviera.3741731/page-5#post-60658952

I'm not sure what statistics you are refering to but the numbers of recorded deeds for the WDW DVC resorts don't seem to support the 5-10 year holding time.

To date, DVD has recorded about 370K contracts for just the WDW DVC resorts. On the other hand, there have been at most about 45K resales with the number likely being closer to 40K resales. (this does not include gratuitous transfers or foreclosures of contracts)

So, even if every resale was for a "never before sold" contract, which isn't the case as some people sell a contract that they bought resale, a maximum of only about 12% of contracts have been sold at all.

In fact, the oldest resort, OKW, has about 51K contracts and have had no more than about 10K resales-likely closer to 8K. So at most about 20% of the OKW contracts have been sold in 25 years.

It seems that a vast majority of contracts bought direct have not been sold at all much less in 5-10 years.

Thanks for the data. Do contracts taken by Disney at ROFR are included as resale in the numbers you've listed?

Anyway, since not so many contracts are resold, why Disney bothers at all with the restrictions?

Nope, Disney buybacks were not included in resale numbers- buybacks total about 16K since 1992. There have also been about 10K foreclosures and about 20K gratuitous transfers..

While the number of resales has increased over the years, it is still a relatively small number, I have no idea why DVD is doing what they are doing.

Note that @dvcsince93 does not include “Disney buybacks” - which I assume are contracts taken in ROFR, meaning the original owner put the contract up for sale, found a willing buyer, agreed to terms, and DVD then stepped in and bought the contract. So I believe that “Disney buybacks” should be included in the numbers of resales. If they are, the number of OKW resales more than doubles: 10K resales + 16K “Disney buybacks.” I asked @dvcsince93 for clarification but didn’t receive an answer, and I wish someone else would try to reproduce that study.

 

[Bing Showei]

Note that @dvcsince93 does not include “Disney buybacks” - which I assume are contracts taken in ROFR, meaning the original owner put the contract up for sale, found a willing buyer, agreed to terms, and DVD then stepped in and bought the contract. So I believe that “Disney buybacks” should be included in the numbers of resales. If they are, the number of OKW resales more than doubles: 10K resales + 16K “Disney buybacks.” I asked @dvcsince93 for clarification but didn’t receive an answer, and I wish someone else would try to reproduce that study.

He quoted a statistical pattern once that supported his point about resale trends over time, and when I questioned why he selectively left off a random 3-year gap from his data sample, I didn’t get a response either.

His statistics seem irreproducible because none of us have access to a system that can parse the volume of OCC data required to produce the numbers he has presented so succinctly.

Look at the degree of statistical detail of @dvcsince93’s postings; the specificity by which he was able to collect and process raw OCC data to draw specific divisional detail (primarily what percent of sales were direct vs resale over given period) in his posts are quite remarkable.

I don’t doubt his figures to be honest. In fact, I suspect his source to be very reliable. But like the DVD statistical justification for the retracted 2020 reallocation, I suspect we have no easy way to verify the data that @dvcsince93 has done an such an outstanding job of “researching.”

 

[Wakey]

Being an international buyer, we also have the poor exchange rate to contend with. I’ve bought four contracts with the exchange rate about 40% less than it was 6 years ago. Wow I wish I had bought back then. But I am glad I did not obsess too much as I’ve used those contracts for multiple vacations, and some of those points have risen in value 30% since I got them,

 

[CarolynFH]

He quoted a statistical pattern once that supported his point about resale trends over time, and when I questioned why he selectively left off a random 3-year gap from his data sample, I didn’t get a response either.

His statistics seem irreproducible because none of us have access to a system that can parse the volume of OCC data required to produce the numbers he has presented so succinctly.

Look at the degree of statistical detail of @dvcsince93’s postings; the specificity by which he was able to collect and process raw OCC data to draw specific divisional detail (primarily what percent of sales were direct vs resale over given period) in his posts are quite remarkable.

I don’t doubt his figures to be honest. In fact, I suspect his source to be very reliable. But like the DVD statistical justification for the retracted 2020 reallocation, I suspect we have no easy way to verify the data that @dvcsince93 has done an such an outstanding job of “researching.”

Thanks, I agree. I know Wil Lovato (@wdrl) follows direct sales very closely, but I doubt that he has time (and maybe not access to enough raw data) to analyze ownership transfers, whether resales (including contracts taken via ROFR), gratuitous transfers, or foreclosures. But I also think that it means we need to take @dvcsince93's conclusions with some size of a grain of salt. The truth is probably somewhere between owners keeping their DVC contracts an average of 10 years (the previously quoted figure) and keeping them much longer (@dvcsince93's conclusion).

 

[ELMC]

[SNIP]

2. If you are under 55, in roughly 22 years, where you can book will slowly dwindle. This is where “buy where you want to stay” will become important in the resale game. Because just like we can predict that any RIV resale will be struggling to book RIV unless you tackle at 11months.... so will staying at the dwindling options left of the original 14.

[SNIP]

This may just be me, but besides retirement, I can't remember the last thing I planned for 22 years in advance. Certainly not my vacations. It is interesting to note that up until their recent price hikes, DVC marketing materials used to tout that you could break even after 7 vacations (or some form of that, I don't have the brochures in front of me). And that was using full rack rates as a point of comparison, which we have always thought was a bit disingenuous. That's gone away now because even at rack rates they can't make that claim. Which leads me to this post...

I think I'm finally going to have to admit to myself that this whole thing is just not a good value anymore. I might even be feeling insulted, the more and more I think about it.

It costs ~$30,000 for enough points to stay in a STUDIO with a nice view at Riviera for one week per year, average-cost season, you don't get great perks or anything particularly valuable for being a member, on the contrary they don't even service your room and the rooms are allowed to decline in condition compared with the cash rooms. The DVC accommodations are even segregated most of the time -- which feels like being in the second class at places like Kidani, BRV, vGF etc. On top of that, costs are, what, ~$1280 per year just in dues on the abovementioned theoretical purchase (with nowhere to go but up, up, up)??

I'm putting a little monthly reminder on my calendar to stop being drawn in by the pure emotion of this thing; since my clarity suffers when I receive things like pictures of the Riviera rooms in the mail, smiling families, garbage along the lines of "you could save $1800 if you act now!". My current points were obtained when it was still relatively affordable; I don't strictly need more. If I ever want to stay in a 2bdr at vGF for 6 nights and need to book at >7 months out, I'll spend $4000-5000 via David's and not suffer yet another long-term financial commitment.

Resale is a ripoff as well as the prices are artificially made to approach direct costs moreso than they would otherwise. We all know this but try so hard to pretend it's a decent deal. From a relative perspective, it still is ... but "relative" is an enormous word here.

I think anyone pretending that this makes financial rather than just emotional sense is doing just that: pretending.
With enough roundabout maneuvering you can make 1+1=3, if you really want to.

I don't know who @RaymOOOnd is, but I think I love him.

Thanks, I agree. I know Wil Lovato (@wdrl) follows direct sales very closely, but I doubt that he has time (and maybe not access to enough raw data) to analyze ownership transfers, whether resales (including contracts taken via ROFR), gratuitous transfers, or foreclosures. But I also think that it means we need to take @dvcsince93's conclusions with some size of a grain of salt. The truth is probably somewhere between owners keeping their DVC contracts an average of 10 years (the previously quoted figure) and keeping them much longer (@dvcsince93's conclusion).

I think I may be one of the sources of the ten year number as I do remember posting about it on here. I believe I remember Jerry from The Timeshare Store saying on one of the DVC podcasts that the average DVC member holds onto their contract for ten years. He may have been referencing just those who were selling, and not necessarily the entire population. But my reference at the time was, and continues to be somewhat anecdotal and there has been no analysis performed by me in support of this. So while you have your giant salt shaker out, please shake a little my way as well.

 

[TonyaG83]

This may just be me, but besides retirement, I can't remember the last thing I planned for 22 years in advance. Certainly not my vacations. It is interesting to note that up until their recent price hikes, DVC marketing materials used to tout that you could break even after 7 vacations (or some form of that, I don't have the brochures in front of me). And that was using full rack rates as a point of comparison, which we have always thought was a bit disingenuous. That's gone away now because even at rack rates they can't make that claim. Which leads me to this post...

The funny thing is, DVC is sort of my retirement plan. I’m Canadian, and not just that, but Torontonian, which is a bit different when it comes to cost of living. Owning anything more than 400 square feet for less than a million dollars in the city proper is a pipe dream for single millennials. My goal instead is to retire early (retirement itself has also become a pipe dream for most). You can’t own much in 400sqft. I want enough points to just lock up my shoebox for harshest winter months and resort hop every few weeks. I don’t want the true responsibility of a vacation home, I just want to be warm in a place where the amenities are plentiful and I don’t have to cook or clean or mow or shovel or whatever.