What do you think will happen to resale prices in the next few years?

[MrsDis]

We're waiting to pass ROFR on on first DC purchase of 150 points. Right now, we only have a need for the 150 points. As our family gets older, I think we will need about 300 points. That will probably be in 3 - 5 years. I'm wondering if we should start looking at another 150 points contract now, because the prices are so low, or if we should wait until we need it. Who am I kidding? I just want the extra points and love to plan.

What do you think will happen to resale prices in the next few years? Do you think they'll continue to decline or that the economy will improve and they will increase?

Sorry if this has been asked before. I just need some answers to keep me occupied while I wait for ROFR.

 

[Chuck S]

It depends upon the resort, as the 2042 resorts get closer and closer to their end dates, they will surely continue to slowly drop in price. They newer resorts prices will likely fluctuate a little up & down depending upon the direct purchase price.

But of course, that all depends upon the overall economy.

 

[DVC Dude]

The real answer is the nobody knows for 100% sure as we are all taking educated guesses based upon past performance.

In the past (1991-2001) buying DVC was money in the bank and almost every single contract bought then went up in value. Since 2003-4, the prices have dropped, slightly at first and then accelerating since October 2009-present.

The real wild card is the recent rule change and how it will affect prices. I personally don;t think the rule change is that big of a deal, but for some people it is a deal breaker.

Thus, prices will probably stabilize in the next few months and may go up or down. It is hard to imagine them going much lower as the retail prices (direct from Disney) have been on a hockey stick price growth since 1991.

 

[Sandisw]

Just remember, buying now would require you to pay MF's on those extra 150 points you may not yet need. Even at an average of $5/ppt, thats an extra $750 per year.

So, I think that resale prices would have to increase more than the cost of yearly MF's to make buying now a better deal than waiting.

Personally, I don't think you will see that big of a jump, if a jump at all. If it was me, I would just wait and make sure that your 150 points are not enough to sustain you!

 

[wdrl]

Another factor in future resale prices will be whether DVD exercises ROFR. In the last year, DVD has exercised ROFR on most BCV resale deeds sold in the low $80s, and has ignored resales on most of the other resorts. Thus, while BCV's resale prices have stayed above the low $80 range, BWV's resale prices have dropped about $20 in the last three years to the low to mid $60s.

 

[JimMIA]

Without a renewal of ROFR activity (and I don't expect that), I think the price levels for WDW resorts will follow the same trend they've had for the last couple of years.

I don't see any big improvement in the overall economy (and possibly deterioration), so I don't know what would push prices higher. Disney raising their direct prices has not pulled resale prices up in the recent past.

I also think the larger, newer resorts (BLT and AKV) will drop faster than the more mature resorts, just because they have farther to go.

I wouldn't hazard a guess of price levels five years from now, except to say somewhat lower than today.

 

[JimC]

Without a renewal of ROFR activity (and I don't expect that), I think the price levels for WDW resorts will follow the same trend they've had for the last couple of years.

I don't see any big improvement in the overall economy (and possibly deterioration), so I don't know what would push prices higher. Disney raising their direct prices has not pulled resale prices up in the recent past.

I also think the larger, newer resorts (BLT and AKV) will drop faster than the more mature resorts, just because they have farther to go.

I wouldn't hazard a guess of price levels five years from now, except to say somewhat lower than today.

Agree with Jim on this one. Unemployment is too high and primary real estate continues to struggle. Until these conditions change or Disney steps in with ROFR there is little reason to believe prices will increase.

 

[disneynutz]

I'm guessing that resale prices will continue to fall now that Disney has created different rules for resales.

I also think that Disney will wait for the prices to fall, pick up some contracts through ROFR, and offer the points at a higher price with full benefits.

Bill

 

[fflmaster]

Totally disagree with these posts.

As Disney increases the direct sale prices to say 150, 160 and so on the resale prices will increase.

How can anyone think that as the years increase prices will lower. Does anything actually lower over time?

Yes pricing is lower on resales but that is because of two factors.

One, the economy is still in the tank.

Disney, has not rofr lately.

once (if ever) the economy is back you will see home prices increase as well as timeshares.

Disney will help as they sell their points at higher values.

If this didn't happen how could disney sell their own points at higher prices later.

Yes, maybe the Disney collection and other options are worth something but how much.

When Disney sells their points at 160, is the average public going to pay that if they can get say the BLT at 80? No

That means that either Disney will not ever raise their pricing or you will see the resale points move to a percentage below the current Disney price.

It is just simple economics. Right now there is too much supply and not the demand.

That will even out.

Different story on the expiration contracts, but price will not be a factor for years to come. People don't look 30 years into the future in general.

If that was the case then most Americans would be saving for their retirement.

We don't

 

[MFMont]

I agree with points on both sides of the debate, however I think a prudent to wait. I can't imagine that if prices do start to increase, that you would not have plenty of time to react.

 

[JimMIA]

How can anyone think that as the years increase prices will lower. Does anything actually lower over time?

Sure, lots of things go down in price. For more specific examples in the timeshare industry, just look at eBay timeshare offerings. You can literally buy fine timeshares for $1 on eBay.

Yes pricing is lower on resales but that is because of two factors.

One, the economy is still in the tank.

Disney, has not rofr lately.

OR...DVC resale prices have always been artificially high because Disney has been actively ROFRing from the beginning until late 2009.

I think prices have really not reached true supply/demand equilibrium because of the threat of ROFR. But when buyers have really tested the bottom, their deals have gone through at much lower prices than the listings you see on the broker websites.

Disney will help as they sell their points at higher values.

If this didn't happen how could disney sell their own points at higher prices later.

Disney sells at higher prices because they can -- simple supply and demand, with a touch of smoke and mirrors. Most purchasers, especially first-time purchasers, don't even know the resale market exists. And they will always be able to sell their points at inflated prices, just like every other timeshare developer in the world does.

With resale prices though, I think the real floor for prices is the intrinsic value of a DVC timeshare. DVC is a unique product -- at least the WDW resorts are, the others not so much -- it offers benefits NO other timeshare can.

The question for the long term is, how much of a premium is really appropriate for a WDW DVC timeshare, compared to a Hilton, Marriott, Wyndham, Sheraton, Hyatt, etc just offsite? DVC is worth more for WDW vacations, no question about it. But how much more?

[ETA: Once you decide to venture offsite from WDW, DVC becomes quite limited as a vacation vehicle. DVC is trying to correct that to some degree, but they have a LOT of catching up to do.]

In the end, unless DVC resumes actively ROFRing (not happening, I bet), that intrinsic value is what will set DVC resale prices. And I'm betting, it ain't gonna be in the $80's!

 

[BWV Dreamin]

I feel Disney has created some new situations that will drive the price of resale down, despite supply and demand.

One is the obvious factor of no ROFRing. ROFR did indeed create some type of threshold which is not existent to date.

Secondly, changing the characteristics of resale points, (ie: can't use on cruises, no ABD, etc.) on points purchased post 3/21 will absolutely affect future resale prices. Just the notion that Disney can (and in my opinion, will) continue to place restrictions on future resales points will be enough to start eroding away at the price.

Third, the proposed Tiered program. After the conditions are known, look for the prices to again fall lower.

The real answer is the nobody knows for 100% sure as we are all taking educated guesses based upon past performance.

In the past (1991-2001) buying DVC was money in the bank and almost every single contract bought then went up in value. Since 2003-4, the prices have dropped, slightly at first and then accelerating since October 2009-present.

The real wild card is the recent rule change and how it will affect prices. I personally don;t think the rule change is that big of a deal, but for some people it is a deal breaker.

Thus, prices will probably stabilize in the next few months and may go up or down. It is hard to imagine them going much lower as the retail prices (direct from Disney) have been on a hockey stick price growth since 1991.

 

[JimMIA]

Secondly, changing the characteristics of resale points, (ie: can't use on cruises, no ABD, etc.) on points purchased post 3/21 will absolutely affect future resale prices. Just the notion that Disney can (and in my opinion, will) continue to place restrictions on future resales points will be enough to start eroding away at the price.

This is a point that I think prospective direct purchasers should really think about.

To me, the changes so far don't matter, but I'm sure the "full benefits" argument will be persuasive to many of those new buyers who know about the resale market.

However...that same benefit they will enjoy becomes a weapon turned against them when they try to sell. Some slick DVC timeshare salesman is going to be telling their prospect not to buy resale from them because of the difference!

A purchaser who buys resale and then subsequently resells is selling exactly the same contract they bought. A person who buys direct and then resells is selling something less. The new restrictions build in a guaranteed resale loss for the new buyer.

 

[Belle & Ariel]

I agree with above posters about changes to resales contracts not affecting their value. I would guess most points are used at Disney and the changes affect very few people.
If I was to buy more points, it would not impact me--otherwise I would have bought before the March deadline.

 

[JimC]

Two other factors to consider. But they are both longer term trends that are likely to affect DVC contract value.

The first is contract age. Older contracts with fewer remaining years will be worth less than an equivalent contract with more remaining years. I have no idea when this factor will come into play. Maybe it is here already and we can not readily observe it among the other variables. Maybe it will not appear for another decade.

The second is resort age. Older resorts become more costly to maintain --experience higher operational and repair costs, thus will have higher dues and higher year-over-year increases. Refurbishment costs may also be higher and the reserves possibly inadequate as actual expenditures replace assumptions. This all depends on how well the engineering studies were at predicting useful life and replacement costs. And finally, consumer resort tastes and expectations change. Will OKW hold the same fondness to buyers when it turns 40 as it did when it was brand new?

I believe both of these factors are likely to negative affect value. How much and when I have not a clue.

 

[DebbieB]

Totally disagree with these posts.

As Disney increases the direct sale prices to say 150, 160 and so on the resale prices will increase.

How can anyone think that as the years increase prices will lower. Does anything actually lower over time?

Depends on the resort. As the expiration gets closer for the 2042 resorts, why would it go up? There have been some resales passing in the $50's lately for OKW, BWV, SSR. There have been some HH in the $40's & VB in the $30's. They have been dropping like a rock and they aren't stripped contracts.

http://www.disboards.com/showpost.php?p=40758587&postcount=647

OKW - Nahanni------------ 150 OKW (Feb) $45, 150 banked '10 pts, all '11 & '12 pts, buyer pays closing and mf (sub 3/5, passed 3/22)

SSR - disfamily2011--------- 250 SSR (Dec) $54, 250 banked '09 pts, all '10 & '11 pts, buyer pays closing, buyer and seller split mf (sub 3/15 or 16, passed 3/29)

VB - Joey7295---------- 150 VB (Oct) $35, all '09, '10 & '11 pts, buyer pays closing and mf (passed 4/6)

VWL - DizGirl20------- 100 VWL (Oct) $55, all '10, '11 & '12 pts, buyer pays closing and mf (passed 4/5)

BWV - IndigoLove--------- 200 BWV (Feb) $53, all '10 & '11 pts, buyer pays closing, seller pays mf (sub 3/17, passed 4/5)

 

[JimMIA]

Going back to OP's original question -- "How low can you go?" -- here are the lowest prices on actual reported sales that cleared ROFR from the ROFR thread:

WDW, in active sales:
AKV $65 per point
BLT $86 per point
SSR $48 per point

WDW, "sold out":
BCV $77 per point
BWV $50 per point
OKW $45 per point
VWL $55 per point

"Offsite resorts":
HHI $46 per point
VB $35 per point
VGC $80 per point

All of these prices, incidentally were prior to 3/20.

Not sure what, if anything, this means...but food for thought.

 

[JimMIA]

Great minds think alike! But some of them get distracted by science projects.

BTW...did you know that if you hold a plastic water bottle to a hot stove burner, it melts and stinks?

 

[KingRichard]

Of course DVC is going to start buying them back.

They can get something for $50 less then they are selling for at Retail.

What new resort do they have on WDW to sell after BLT is done? None?

DVC always has the option of calling a resale new again with zero restrictions and they could always offer the full 50 years on those contracts.

If they don't do this, then DVC is done for new buyers and what are they going to sell for the next 30 years? They can only build so many resorts at WDW.

 

[ilikedvc]

I think it is fair to say that easc year you get closer to the end date of your contract the value will drop. The drop recently is due to the economy but we will see further declines ahead.