Stock market at 16,700.... Resales affected?

[suebeelin]

So the stock market is now 16,700. Any chance this will impact resales?

 

[bwbuddy5]

So the stock market is now 16,700. Any chance this will impact resales?

be more specific:

"Any chance" - the answer to that is always yes

"Impact" - in what way?

 

[KAT4DISNEY]

Not IMO. Job loss and similar large life events will be far more likely to affect than market jitters or corrections. It might slow down or halt a few sales, but nothing real obvious for resale. Direct might be more affected in that case.

 

[McCrae]

It's too early to tell.... If this turns out to be just a correction then no.... But if it's more than that and the problems in China spread to the U.S. then their is a good chance DVC prices will be impacted.

 

[DougEMG]

People losing their jobs and houses will effect resale prices, not the stock market.

 

[Drewski77]

People losing their jobs and houses will effect resale prices, not the stock market.

Agreed, and corrections like this are a reminder that those of us who truly use "ideal cash" that is not invested in the stock market to purchase a DVC contract, are not giving up a guaranteed 10%-12% return as some on the boards suggest.

 

[suebeelin]

Thx for the answers... I want an SSR contract but not at these ridiculous prices. Was hoping for 2012/2013 prices again.

I guess it's too soon to tell if this market drop is a correction or something else....

 

[WilsonFlyer]

Thx for the answers... I want an SSR contract but not at these ridiculous prices. Was hoping for 2012/2013 prices again.

I guess it's too soon to tell if this market drop is a correction or something else....

The irony of all of this is that if turns out to be more than just a "correction," it likely will affect resale prices, but don't forget the odds are it will affect YOU also. If there's an impact big enough to affect DVC pricing, it's obviously impacting a LOT of people.

 

[bwbuddy5]

And, I can see a handful of DVC owners panicking for cash (just like a handful of Americans in general), so there may actually be a few more resales trickle to market.

 

[DenLo]

If a potential purchaser was planning to use the extra monies in their stock market account to buy into DVC, then yes it would affect purchases. But I would think not that many would be affected by a correction. Like others have stated if the economy is dramatically affected by the stock market then that would definitely affect DVC and the demand on resales would decline.

 

[Drewski77]

You can also look at a stock market correction another way: The market has gone up about 17% a year for 5 years straight prior to 2015. With these kind of returns in a liquid investment I am sure many kept riding the wave, why sell when the returns are so great and relatively easy.

Now, if a prolonged correction comes, some might decide to take a portion of their gains and buy into DVC or real estate. When you look at different cycles of real estate values (not the same as a timeshare or DVC) and stock market returns, many times they are not correlated. Just look at 2009-1014 for the most recent example. I suspect the rise in real estate values particularly staring in 2015 has somewhat to do with the stock market slowing down, and money flowing to other investments such as real estate.

*Disclaimer: I am not saying a person should buy into DVC with funds that should be set aside for retirement planning, I am speaking about "extra funds" or "idle cash" that could be left in the market or put into something else like DVC or traditional real estate.

 

[djohn06]

Agreed, and corrections like this are a reminder that those of us who truly use "ideal cash" that is not invested in the stock market to purchase a DVC contract, are not giving up a guaranteed 10%-12% return as some on the boards suggest.

Yeah, I love how people assume you will get 10 to 12 over the next few years automatically, and since you chose to invest in DVC vs the stock market you lost tens of thousands of dollars during your lifetime. #yawn.

 

[Minniesgal]

Who knows if we could predict these things we would all be
Millionaires

It could even push prices up if people think I've got cash sitting to invest but the market is too unpredictable right now so I'm gonna treat myself to that DVC I've wanted for years.

 

[deide71]

This is not 2008, thank God.

 

[coastalhh]

Yeah, I love how people assume you will get 10 to 12 over the next few years automatically, and since you chose to invest in DVC vs the stock market you lost tens of thousands of dollars during your lifetime. #yawn.

Dvc is not an investment. At the end of the term it's worth 0. Some people may make a profit over the life of contract but it is by no means an investment. The stock market long avg is a good return with corrections, dips, crashes and all.

 

[Drewski77]

Dvc is not an investment. At the end of the term it's worth 0. Some people may make a profit over the life of contract but it is by no means an investment. The stock market long avg is a good return with corrections, dips, crashes and all.

Actually, if someone buys into DVC to save money over a long period of time as opposed to paying rack rates every year then that person could invest the annual savings into a long term stock portfolio. The person who buys into DVC and invests his savings, versus the person who pays rack rates for 35-45 years will come out way ahead...which I would call a great investment!

In addition, just because someone buys a stock does not automatically mean that the person is "investing." Plenty of people gamble with stocks, but I suspect most gamblers in the stock market justify it by saying that they are "investing."

*Disclaimer: I am not saying to not have money set aside and invested the stock market for retirement, but what I am saying is there is more to the discussion than simply saying that buying a DVC contract automatically means you are not making a long term investment.

 

[sndral]

Normal bumps in the market won't impact DVC prices, IMO. My sense is that the majority of DVC owners aren't selling bits of their portfolio to buy points, I know I didn't. I do think once interest rates start to return to historic norms we will see significant changes in real estate values - including DVC which is frequently financed, unless there's also meaningful increases in wages.
I don't see DVC as an investment - it's more like a car, I paid a lot to buy the thing, I have to pay for gas to keep the car running just like I pay MFs to use my points, I have to pay for tune ups and repairs just like I pay for tickets and airfare to use my points. When I'm done with my car maybe I'll get some residual cash back, when I'm done with my DVC maybe I'll get some residual cash back (unless I hold to the end.) My investments in the market I don't have to pay anything for once I'm invested, the dividends I can spend or reinvest, if I choose wisely I should see 6-8% per year growth long term and when I liquidate I'll see my initial investment plus my gains.

 

[djohn06]

Dvc is not an investment. At the end of the term it's worth 0. Some people may make a profit over the life of contract but it is by no means an investment. The stock market long avg is a good return with corrections, dips, crashes and all.

Just because it "may" end at zero doesn't mean it isn't an investment. All stock options end at zero, but people invest in those every day. Some unit investment trust work the same way.

People who invest in DVC do not plan on holding to the end.

My kid might like baseball cards because they are fun. Another person may pour 5k into Mike Trout rookie cards expecting it to go up. Just because my kid and I use it for fun, doesn't mean the other guy holding 5k worth of MT rookie cards is not investing in baseball cards.

 

[erin1715]

Just because it "may" end at zero doesn't mean it isn't an investment. All stock options end at zero, but people invest in those every day. Some unit investment trust work the same way.

People who invest in DVC do not plan on holding to the end.

My kid might like baseball cards because they are fun. Another person may pour 5k into Mike Trout rookie cards expecting it to go up. Just because my kid and I use it for fun, doesn't mean the other guy holding 5k worth of MT rookie cards is not investing in baseball cards.

I'm confused by this statement. Do you mean everyone who buys DVC plans to sell before their contract is up? If I buy, the plan is to use it until I'm too old to travel any longer.

 

[djohn06]

I'm confused by this statement. Do you mean everyone who buys DVC plans to sell before their contract is up? If I buy, the plan is to use it until I'm too old to travel any longer.

Just means people who look at DVC as a cash generating investment will not be left holding the bag.

You are buying to save money on vacations. You aren't looking at DVC as an investment where you are planning to get a yield on point rentals and capital appreciation.