Where do you think DVC resale prices are headed?

[sky2823]

personally, I think this pandemic will die down by summer and the aftermath we will be dealing with is the 3 months of the economy shuttting down.

If Disney views this as a short term hiccup, they will fortify the rofr for that time, take the hit. We might see a 10% drop.

If they determine attendance won’t recover for a year or two,then we are talking 30 to 40% because Disney will be in survival mode and needing cash and not doing much on the rofr

 

[glamdring269]

Yeah sky I think you hit the nail on the head. The virus might die down but the economic impact is likely to last much longer. And if the virus rebounds in the fall... yikes.

 

[sethschroeder]

Yeah sky I think you hit the nail on the head. The virus might die down but the economic impact is likely to last much longer. And if the virus rebounds in the fall... yikes.

The virus will rebound 45-60 days post removal of shelter in place. How much it rebounds is based on how much they reopen.

I am just glad while I live in a tourist area it's summer houses and a few resorts it's not a large destination like Orlando, NYC, or San Fran.

 

[ELMC]

I think we are 3-6 months from seeing the deals show up. I don’t expect a fire sale or anything like that but I do expect 20-25% drop in prices across the board by the end of the year.

I would agree. The DVC resale market reacts much slower than say, the stock market, where prices seem to drop overnight. The prices DVC resales are selling for today are etched into the minds of buyers as the "normal" price. Now, maybe given the economic situation buyers will ask for a small discount in their offers, but these downward ticks will be small and incremental. The real shift will start to happen when people are forced to sell and the market becomes flooded with contracts. Combine that with a smaller group of potential buyers and basic laws of supply and demand will take effect. Accelerating this process will be those who really really need to sell, and will aggressively price their contract in order to get a fast sale. This price will be the new benchmark that everyone is trying to beat, which will force prices down even further. Given that the economic impact of our situation is likely to last well into 2021, I do think that there will be enough time to let this scenario play out.

 

[Deploraboo]

For anyone thinking Disney will be exercising ROFRs here, please tell me from what cash flow source, debt drawdowns? They’re probably using that to service existing debt.

 

[TraderSamWDW]

For anyone thinking Disney will be exercising ROFRs here, please tell me from what cash flow source, debt drawdowns? They’re probably using that to service existing debt.

The may use it some if needed to stop DRR going for 50 a point but otherwise, you are spot on, they didn't just issue all those bonds to fund ROFR. They have a lot of debt service. And with no major revenue stream, they are robbing Peter to pay Paul for the moment.
The will also exercise ROFR if they need to in order to make a pending sale, for a quick (albeit small) instant profit.
But I sure can't see them using cash to build a point inventory of any sorts

 

[Sandisw]

The may use it some if needed to stop DRR going for 50 a point but otherwise, you are spot on, they didn't just issue all those bonds to fund ROFR. They have a lot of debt service. And with no major revenue stream, they are robbing Peter to pay Paul for the moment.
The will also exercise ROFR if they need to in order to make a pending sale, for a quick (albeit small) instant profit.
But I sure can't see them using cash to build a point inventory of any sorts

They may also be hoping that resale offers will slow down and have breathing room so they won’t have to. I can tell you as a seller it has...just based on my experience selling in October vs now.

But yeah, I think it will be hard fot them to prevent great deals from happening

 

[Matty B13]

They may also be hoping that resale offers will slow down and have breathing room so they won’t have to. I can tell you as a seller it has...just based on my experience selling in October vs now.

But yeah, I think it will be hard fot them to prevent great deals from happening

I track Feb UY VGF points, and there are a lot of small contracts out there right now that have been up for awhile.

This was unheard of just a few months ago.

 

[poofyo101]

I track Feb UY VGF points, and there are a lot of small contracts out there right now that have been up for awhile.

This was unheard of just a few months ago.

I have been tracking almost everything.

The good deal contracts have not been pending/selling as fast as they would have.

Prices haven't really dipped yet but it seems the demand is gone...for now.

 

[Deploraboo]

We’re effectively two weeks into this. Anyone issuing “non negotiable” Sale offers right now are being penny wise and pound foolish, imho. This is not a terribly liquid market right now.

to add: generally unsecured bonds and revolving credit facilities can only be used for refinancing and general working capital needs. Query as to whether exercising ROFRs qualify. Doubtful although I do suspect (without specific knowledge) that they have a reserve fund for ROFRs but wouldn’t suspect them replenishing it or, frankly, materially tapping it, during this period, All speculation, but were I a treasury cash manager at DIS, this is what I’d do.

 

[Sandisw]

I track Feb UY VGF points, and there are a lot of small contracts out there right now that have been up for awhile.

This was unheard of just a few months ago.

Yup. My contract would have gone within a day at its price a few months ago, Now it’s been a week since my first buyer backed out,

 

[Yankee626]

All 2042 contracts are overpriced on the resale market already. How can BCV resale contracts be selling for only $20 a point less than Poli contracts when they have 23 fewer years left. I see the demand dropping and the amount of Sellers rising quickly over the next 3 months. Especially if DW remains closed. By October I see the 2042 contracts to be selling between 60 and 80 a point. VB and HH may drop to 20-30 a point due to their ridiculous high Dues . People just wont be able to afford this luxury for a while.

 

[Starport Seven-Five]

Seeing a few AKV listings at $100/point now. Not a big move but it looks to be starting to trend downward.

All 2042 contracts are overpriced on the resale market already. How can BCV resale contracts be selling for only $20 a point less than Poli contracts when they have 23 fewer years left. I see the demand dropping and the amount of Sellers rising quickly over the next 3 months. Especially if DW remains closed. By October I see the 2042 contracts to be selling between 60 and 80 a point. VB and HH may drop to 20-30 a point due to their ridiculous high Dues . People just wont be able to afford this luxury for a while.

2042 still sounds like it's very far away. I agree with the logic (and would not be looking at 2042 contracts personally), it just hasn't impacted prices significantly yet and I will be surprised if Covid19 is when it starts.

Poly only has studios or bungalows so it's generally a less desirable contract. I would compare against Bay Lake Tower or Copper Creek instead as it's more apples to apples.

 

[Yankee626]

Why would Poly be less desirable because it only has Studios or Bungalows ? You can use your points at any resort. One and two bedroom suites are usually easy to book at any resort at the 7 month window. If anything I would think Poly would be more desirable because it has more Studios which is what most Members are looking for. Plus poly has a very low Dues cost.

 

[GinnyBear's_mom]

Why would Poly be less desirable because it only has Studios or Bungalows ? You can use your points at any resort. One and two bedroom suites are usually easy to book at any resort at the 7 month window. If anything I would think Poly would be more desirable because it has more Studios which is what most Members are looking for. Plus poly has a very low Dues cost.

Poly is less desireable due to the fact you have bungalows (a ridiculously high point value) and studios. If your family situation changes, more kids, kids get older, etc and you own at Poly you are forced into waiting until the 7 month mark to find the 1 and 2 bedroom leftovers at other resorts, that can be stressful. Some of the many benefits of DVC are full kitchens, in-room washer and dryers, multiple full bathrooms- things you can't get in a studio. During the months I travel (a high season and a supposed low one) it is a challenge to find rooms of any size available at the 7 month mark for my full stay. Many see that they paid "deluxe" dvc pricing for a Poly contract and don't want to get stuck staying at a dvc resort with fewer amenties, especially when considering transportation.

Prior to the closing it seemed like many owners was renting out unused points that may have previously expired or exchanged into RCI. Now that the 'nonrefundable' downside of DVC rentals has been exposed I think they rental market may cool and cause DVC availability to open back up again, possibly to where it was 5 years or so again before the rental market exploded. Back then I could always book my home resort at the 11 month mark (now not always guaranteed) and there were options other than okw or ss at the 7 month mark.

 

[MonkeyKnifeFight]

Poly is less desireable due to the fact you have bungalows (a ridiculously high point value) and studios. If your family situation changes, more kids, kids get older, etc and you own at Poly you are forced into waiting until the 7 month mark to find the 1 and 2 bedroom leftovers at other resorts, that can be stressful. Some of the many benefits of DVC are full kitchens, in-room washer and dryers, multiple full bathrooms- things you can't get in a studio.

I think this is the main reason poly prices are lower than Bay Lake and grand Floridian on the resale market. After people’s family grow they realize they would prefer 1 or 2 bedrooms. We just stayed at the poly and it was amazing. We much preferred the environment, location and view over BLT and VGF. However after staying 9 days in a studio with 2 kids we realized we would want to stay in 1 bedrooms if we bought. As a result we bought a BLT resale contract.

Poly lake views that are on the 3rd floor have an incredible view of the castle and 7th sea lagoons. The villas at grand Floridian lake views don’t have any great views like that. You get the lagoon but you don’t see the park. Bay lake tower theme park views are nice but you also get the parking lot. The lake views you don’t see the theme park usually. But in the end not having 1 bedrooms was a deal breaker.

 

[SL6827]

Seen a 50 point Beach Club for 140/point.

 

[TraderSamWDW]

Why would Poly be less desirable because it only has Studios or Bungalows ? You can use your points at any resort. One and two bedroom suites are usually easy to book at any resort at the 7 month window. If anything I would think Poly would be more desirable because it has more Studios which is what most Members are looking for. Plus poly has a very low Dues cost.

Poly is also easy to switch into at 7 months quite easily many times of the year. (i have done it 3 times in the past 2 years) When you buy a contract,one thing you are buying the 11 month home field advantage. Poly does not need it as much as some other places.
Plus the studios and bungalows only thing doesnt help much, more people like bigger accommodations than you realize i think..

Also, supply and demand. Poly probably has fewer big contracts than other resorts because it is only studios, so that means more smaller contracts (in the 150 point area) so bigger supply
Not a knock on the resort (its one of. if not my fav)

 

[Starport Seven-Five]

Why would Poly be less desirable because it only has Studios or Bungalows ? You can use your points at any resort. One and two bedroom suites are usually easy to book at any resort at the 7 month window. If anything I would think Poly would be more desirable because it has more Studios which is what most Members are looking for. Plus poly has a very low Dues cost.

My original point was just that Beach Club and Boardwalk have more room options than Poly so it's not a good comparison. The lack of options is why Poly will always be lower priced than BLT (which offers a similar expiration date and membership dues) so the members obviously do place some value on it.

Yes, you can book at 7 months but so can SSR/OKW and their prices are even lower.

 

[MICKIMINI]

All 2042 contracts are overpriced on the resale market already. How can BCV resale contracts be selling for only $20 a point less than Poli contracts when they have 23 fewer years left. I see the demand dropping and the amount of Sellers rising quickly over the next 3 months. Especially if DW remains closed. By October I see the 2042 contracts to be selling between 60 and 80 a point. VB and HH may drop to 20-30 a point due to their ridiculous high Dues . People just wont be able to afford this luxury for a while.

Maybe we'll be able to buy enough contracts to get us three months at WDW in the winter for retirement at those prices!