The Poly2 Pricing Thread

[zavandor]

So all resale prior to 2019 is treated on par with DVC direct points? I also would be curious to know what fraction of current owners are direct, resale pre-2019, resale post 2019 at unrestricted resorts, and resale at RIV (I assume we are still at/near zero resale VDH at this point). It doesn’t seem like it’s that much easier to get bookings at RIV than the other resorts at <7mo, so I would think the percentage of us with post-2019 resale can’t be that huge.

It has been estimated that on average 1% of DVC total inventory is resold every year. This vary by resort: a new resort trades much lower than that rate (RIV is probably not at a much higher rate than 0.01%) and then it accelerates a bit. Probably SSR is the one that trades highest.
I haven't looked into the data myself and I'm just quoting posts made here in the past, I cannot guarantee this is correct. But let's say 4% in 4 years. We have to account that some of those points have been purchased as addons by people who already have unrestricted points (direct or pre-2019 resale) so they can use their unrestricted points to book RIV and VDH and their restricted points for other resorts. This makes those points almost unrestricted when we consider their effect on booking patterns for restricted resorts.

So maybe 2%-3% points are currently owned by owners that cannot book the restricted resorts? I think it's far too low to see any effect on booking patterns yet. Other things (like the propensity of new owners to stay more at their home resort initially) have a much bigger impact.

 

[Sandisw]

Some people bought BW for under $75 and once they use it for 40 years, I doubt they will be upset if they sell it for a reduced amount.

I bought it as low as $55 so I agree that there very well be owners willing to jump ship low.

 

[Sandisw]

Agreed that there will always be those who want/need to sell for whatever reason at any given time. But, to your point of not being enough buyers to keep prices up, I believe there won’t be enough owners stupid enough to sell low based on contract end date. Owners will still be able to rent those points at the very highest end of the rental market, up until the very last day. So, why would they consider “fire sale” pricing just because the end date looms 5-10 years out?

For example, someone owns 200 points, decided they don’t need it anymore..contract expires in 10 years. At todays rental prices, that’s easily $5,000 in return (probably more). Minus dues, $3400 net. Times 10 years, = $34,500 in net profit. So selling it for around $100-$120pp is crazy.

Of course, some won’t care to go that route & just sell..there are always those selling for various reasons with no regard to value or market. However, those that do keep the contracts will far outweigh those that don’t, leaving a supply shortage, which will increase the value of the contract for sale in the marketplace.

In short, I don’t believe that BCV & BWV’s (these 2 resorts specifically) values will decline sharply as the contract end date looms. It’ll decrease of course, but not as drastically as some are expecting. We have a good 9 more years to speculate though.. so that’s cool!

If someone paid, like I did $55 a point back in the 2011 to 2012 timeframe and wants out, why would they care about selling for more or dealing with renting?

They’d be getting all their money back at that point.

I just don’t see many paying that much for a contract with such a short life when you can buy a SAP contract and be happy with pool or garden view or go at off times to stay there.

But, as you say, it will be fun to watch in 9 years!

 

[tom1944]

I bought it as low as $55 so I agree that there very well be owners willing to jump ship low.

I thought I remember I could have bought in at $62 when I was there in either 1992 or 1996 but I was not certain, so I guessed a little higher.

 

[GoingSince1990]

Agreed that there will always be those who want/need to sell for whatever reason at any given time. But, to your point of not being enough buyers to keep prices up, I believe there won’t be enough owners stupid enough to sell low based on contract end date. Owners will still be able to rent those points at the very highest end of the rental market, up until the very last day. So, why would they consider “fire sale” pricing just because the end date looms 5-10 years out?

For example, someone owns 200 points, decided they don’t need it anymore..contract expires in 10 years. At todays rental prices, that’s easily $5,000 in return (probably more). Minus dues, $3400 net. Times 10 years, = $34,500 in net profit. So selling it for around $100-$120pp is crazy.

Of course, some won’t care to go that route & just sell..there are always those selling for various reasons with no regard to value or market. However, those that do keep the contracts will far outweigh those that don’t, leaving a supply shortage, which will increase the value of the contract for sale in the marketplace.

In short, I don’t believe that BCV & BWV’s (these 2 resorts specifically) values will decline sharply as the contract end date looms. It’ll decrease of course, but not as drastically as some are expecting. We have a good 9 more years to speculate though.. so that’s cool!

Yes, the value analysis becomes much simpler the closer we get to expiry, because the time value of money becomes less of a consideration, and there is less uncertainty about the path of rental rates and annual dues. For example, if BCV was expiring one year from now instead of 19 years from now, the fair resale value of the points would be one year's worth of rent less one year of dues, so in the range of $11-$12 per point. (One possible wild card here is the "capital reserve" portion of the dues; hopefully with only one year to go there would not be much need to charge for a "capital reserve", which would push the dues down and the value of the points up). If there were two years to go instead of one, the value of the points would be $22-$24, and so on. And if there are 10 years to go, it is entirely possible that the value of the points would be in the $100 per point range.

 

[Sandisw]

I thought I remember I could have bought in at $62 when I was there in either 1992 or 1996 but I was not certain, so I guessed a little higher.

It was higher and then took a tumble. It was in the $70s and $80s when I joined DVC in 2009.

But, by 2012, it was selling in the $50s and $60s…BCV was more in the $70s

Your point still makes sense in that there very well could be many owners who would rather just get out than deal with renting when they can get back their purchase price, and even potentially more, selling low!

 

[CarolynFH]

We told DD that if we expire before BWV does, our contracts might not be worth much on the resale market, but she could rent them out if she didn't want to use them. It will be up to her.

 

[HyperspaceMountainPilot]

I don’t understand why the amount you initially paid for the contract makes you more or less likely to sell for an amount that is lower than the guaranteed (conservative end) of holding and renting, unless you need that cash. And if you are much below the after tax rental value, the smarter buyers may bid up to that amount anyway.

I generally agree with @GoingSince1990’s calculations except that with my Dec BCV booking, I’m paying about 40 points a night for a room that would rent over $1000, so closer to $25/pt/yr minus dues.

 

[Sandisw]

I don’t understand why the amount you initially paid for the contract makes you more or less likely to sell for an amount that is lower than the guaranteed (conservative end) of holding and renting, unless you need that cash. And if you are much below the after tax rental value, the smarter buyers may bid up to that amount anyway.

I generally agree with @GoingSince1990’s calculations except that with my Dec BCV booking, I’m paying about 40 points a night for a room that would rent over $1000, so closer to $25/pt/yr minus dues.

Because not everyone wants to deal with rentals…I don’t…or went in to this worrying about a specific value back when they sell?

So, if someone paid $70/pt and 25 years later, after tons of trips, can get that money back, it’s a huge win. Why hold out for more if the goal is to get out?

 

[thelionqueen]

I don’t understand why the amount you initially paid for the contract makes you more or less likely to sell for an amount that is lower than the guaranteed (conservative end) of holding and renting, unless you need that cash. And if you are much below the after tax rental value, the smarter buyers may bid up to that amount anyway.

I generally agree with @GoingSince1990’s calculations except that with my Dec BCV booking, I’m paying about 40 points a night for a room that would rent over $1000, so closer to $25/pt/yr minus dues.

I agree with you. Although there are some who think that way, I don’t think most do.

 

[thelionqueen]

Some people bought BW for under $75 and once they use it for 40 years, I doubt they will be upset if they sell it for a reduced amount.

I guess I just don’t understand this way of thinking. I’m thinking like those who bought a house in the 70’s for $20,000 and now it’s worth more..but they had a lot of good years, and I’ll make some $$ but don’t really care because I got a good deal, just want to sell it. Although I’m certain there are those with more obey than time, and value convenience over value, I think that number of folks is very small

 

[Sandisw]

I guess I just don’t understand this way of thinking. I’m thinking like those who bought a house in the 70’s for $20,000 and now it’s worth more..but they had a lot of good years, and I’ll make some $$ but don’t really care because I got a good deal, just want to sell it. Although I’m certain there are those with more obey than time, and value convenience over value, I think that number of folks is very small

Selling a house is completely different than having to hold on to a timeshare, paying MFs, and not using…or dealing with renting it out.

As you said, we have to wait, but in 10 years, there will be more DVC resorts available as options so buyers simply may choose something else and take their chances at 7 months…or whatever the trading window is at that point.

I just don’t see there being the number of buyers you do who will want to invest that much and why sellers will lower their prices to be done.

 

[thelionqueen]

I just don’t see there being the number of buyers you do who will want to invest that much and why sellers will lower their prices to be done.

I see the opposite that many others do. Sure more resorts will be built but none in that area..zero. Closest thing they could get is RIV which I literally wouldn’t take for free.

Selling a house is completely different than having to hold on to a timeshare, paying MFs, and not using…or dealing with renting it out.

As you said, we have to wait, but in 10 years, there will be more DVC resorts available as options so buyers simply may choose something else and take their chances at 7 months…

It’s interesting that BCV is currently selling for as much as, or even more than RIV today in many instances. You’d think a resort with 28 more years would sell for much more..yet it isn’t. BCV is also online with CCV resales.

Think about that for a second… a newer resort with almost 30 MORE years on it is selling for LESS than a resort that has less than 20 years left on it in total. That tells one everything they need to know.

So for those who think buyers would prefer a shiny new resort with lots more years on its ownership, recent sales seem to suggest otherwise. But I do agree, nobody knows.

 

[Sandisw]

I see the opposite that many others do. Sure more resorts will be built but none in that area..zero. Closest thing they could get is RIV which I literally wouldn’t take for free.

It’s interesting that BCV is currently selling for as much as, or even more than RIV today in many instances. You’d think a resort with 28 more years would sell for much more..yet it isn’t.

So for those who think buyers would prefer a shiny new resort with lots more years on its ownership, recent sales seem to suggest otherwise. But I do agree, nobody knows.

To be fair, though , BCV may be selling a bit more than RIV, but all the other 2042 resorts are not…so, in that case BCV is unique.

And maybe, BCV will remain at a higher value longer than the others, or we see more owners just hold on to them vs the BWV, BRV and OKW owners.

 

[HyperspaceMountainPilot]

To be fair, though , BCV may be selling a bit more than RIV, but all the other 2042 resorts are not…so, in that case BCV is unique.

And maybe, BCV will remain at a higher value longer than the others, or we see more owners just hold on to them vs the BWV, BRV and OKW owners.

I am a BCV owner (as soon as my purchase closes on a delayed close contract)—but genuinely baffled why BCV is doing a better than BWV— it makes total sense that both of them will hold value better than all other hotels because they are walking (and quick boating) distance from two parks. Is it SAB? Maybe people don’t know the creepy clown slide is gone from BWV?

 

[Jwaire]

I am a BCV owner (as soon as my purchase closes on a delayed close contract)—but genuinely baffled why BCV is doing a better than BWV— it makes total sense that both of them will hold value better than all other hotels because they are walking (and quick boating) distance from two parks. Is it SAB? Maybe people don’t know the creepy clown slide is gone from BWV?

It's simple math. BCV is a much smaller resort. It doesn't have Grand Villas. So, there's less contracts, less points available out there, it's closer to EPCOT and yes it has SAB.

BWV is still a DVC darling though, and gives you the ability to book those value standard view rooms.

They all offer something, but some 2042's stand above the rest.

1. BCV (Small, SAB)
2. BWV (Standard View Rooms)
3. OKW (Lowest point rooms, Best Point Chart out there)
4. HHI (Hard to book, Much Smaller than VB)
5. VB (Hard to get into during peak months especially cottages)

 

[thelionqueen]

It's simple math. BCV is a much smaller resort. It doesn't have Grand Villas. So, there's less contracts, less points available out there, it's closer to EPCOT and yes it has SAB.

BWV is still a DVC darling though, and gives you the ability to book those value standard view rooms.

They all offer something, but some 2042's stand above the rest.

1. BCV (Small, SAB)
2. BWV (Standard View Rooms)
3. OKW (Lowest point rooms, Best Point Chart out there)
4. HHI (Hard to book, Much Smaller than VB)
5. VB (Hard to get into during peak months especially cottages)

Agree with all of this. Many resorts have attributes that certain folks like and therefore own there. BCV & BWV are the standouts of the 2042 resorts (BCV esp) due to location mainly and other amenities highlighted in this thread.

I think the constant challenge of booking at 7m and resale prices are quite telling. The appetite for BCV hasn’t waivered since day 1! BWV’s excellent point values and location consistently attract buyers..and although costing less than BCV (I do think SAB is a big draw) will maintain its desirability as well.

I thought OKW would get harder to book with lots of new owners forced to buy less points due to the cost pp, that hasn’t happened, but think it could.

The two Epcot resorts are unique of the OG’s which is why I don’t think you’ll see owners quick to sell..but we shall see! I’d imagine DVD will have plans solidified long before contract expiration, that is what I’m truly excited for!

 

[RoseGold]

I guess I just don’t understand this way of thinking. I’m thinking like those who bought a house in the 70’s for $20,000 and now it’s worth more..but they had a lot of good years, and I’ll make some $$ but don’t really care because I got a good deal, just want to sell it.

Someone posted the foreclosures not so long ago and a lot of them were estates. Estates that either didn't know or couldn't be bothered to deal with five figure assets.

This is a property transaction in Florida, that is a big obstacle for many to get around, even living people with clear title without probate. Sure, the people on this board could get a contract sold in a few weeks, but many just don't. As the ownership of DVC ages, of course this is going to happen. This is a loose end to tie up at some point for most of us.

 

[BrianLo]

I’m the odd one from being semi disinterested in Poly 2, to kind of a for sure buy. That very much is motivated by the Duo Studios.

The balance is interesting and again this is a fully designed DVC. With a proper room count, pool and even some forms of eateries that actually puts it ahead of VDH.

I don’t really know what I want. Same HOA does somewhat bother me about the increased competition over the Duo Studios. Though the resale price will definitely be a pittance for smaller contracts than direct.

If it’s the same I’ll buy resale, different HOA for sure direct (but less points probably). Which leads me to DVC must be weighing this. The balancing act of how many Poly 1 owners will be onboarded to add on some points to stretch up their accommodations versus new owners that would rather just buy resale to get into Poly 2. Unlike BPK the sales pitch isn’t the resort per say, it’s the actual tower.

 

[intamin]

If it’s the same I’ll buy resale, different HOA for sure direct (but less points probably). Which leads me to DVC must be weighing this. The balancing act of how many Poly 1 owners will be onboarded to add on some points to stretch up their accommodations versus new owners that would rather just buy resale to get into Poly 2. Unlike BPK the sales pitch isn’t the resort per say, it’s the actual tower.

If I were DVC I'd be saying, if it's the same association, what's stopping people from buying resale? Unless we price the tower aggressively, we're going to have to do another sale like we did with Grand Floridian this summer to bring our direct price a lot closer to resale pricing to be competitive.