Where do you think DVC resale prices are headed?

[MrWonderful]

BLT at 161 is definitely an outlier.... probably had a direct buyer and grabbed what was available to them at that moment. Also could of been a very small contract like 25 or 50 points.

 

[Lorana]

DVC resale market ROFR and price updates for October:
https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-october-2020/https://www.dvcresalemarket.com/blog/dvc-right-of-first-refusal-report-rofr-october-20-report/
ROFR of a BLT contract at $161.

This is why having the reverse statistics is also nice, though: what are the lowest prices that passed?

on this board there was a BLT for $135 and another for $138 that passed in October.

 

[AvidDisReader]

I’m not really sure what you are saying. Obviously there are a lot of properties delinquent in dues and/or payments, even if this were a normal economy. You think they don’t want to foreclose and sell them?

Of course foreclosing is cheaper than ROFR, Disney does it all the time. This is one of the reasons ROFR is so high right now. It’s the only source of sold out points right now.

I know when your dues are delinquent, Disney freezes your points, but I’m not sure that’s true for financing. You bet they want to foreclose now.

Again, no this is a losing propostion. You do not understand all that is lost--HOA fees, interest owed. When you lend money, if the person is not making payments you are not only not getting back any principal but not getting back the interest that is due in the note. If the owner was in a positive position, they would sell themselves on the secondary market. So if it goes to foreclosure, you take into account the accumulated interest owed, principal, and HOA owed, the net will be a loss to the seller. So when you think foreclosure, do not think it terms of just the HOA fees lost.

 

[RebelScum]

This is why having the reverse statistics is also nice, though: what are the lowest prices that passed?

on this board there was a BLT for $135 and another for $138 that passed in October.

I passed ROFR in September on a BLT contract (160 pts) at $130 per point. Agree that they likely had direct buyer ready to go . . . Glad that was not the point when my contract was reviewed.

 

[CastAStone]

DVC resale market ROFR and price updates for October:
https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-october-2020/https://www.dvcresalemarket.com/blog/dvc-right-of-first-refusal-report-rofr-october-20-report/
ROFR of a BLT contract at $161.

Meh. I think a lot of ROFR decisions get made because they have remnant points for a certain unit and by ROFRing more of that unit they can sell all the points.

If they have 20 points across 100 units they have 2000 points and nothing to sell. Its worth it to Disney to pay a little more to get points in units they have already.

 

[zavandor]

Again, no this is a losing propostion. You do not understand all that is lost--HOA fees, interest owed. When you lend money, if the person is not making payments you are not only not getting back any principal but not getting back the interest that is due in the note. If the owner was in a positive position, they would sell themselves on the secondary market. So if it goes to foreclosure, you take into account the accumulated interest owed, principal, and HOA owed, the net will be a loss to the seller. So when you think foreclosure, do not think it terms of just the HOA fees lost.

All true in the real world, but here we are in Mickey's world.
Disney finances the purchase of they own very expensive product. Virtual money goes from one Disney's account (the finacing business unit) to another Disney's account (DVC). The purchaser gives 10% for downpayment in real money that goes into a Disney account, pays for a few months more real money into Disney's account and then foreclosures.
The virtual money disappear, but the real money paid by the unfortunate owner in the meantime are still in Disney's hands and the points are back, ready to be exchanged for more real money.
It's a mindblowingly good scheme. Zero risks and a lot of profits.

Sure, while the points are in the hands of an owner, Disney cannot use (for renting) or sell them, but it is estimated that construction cost is a very small fraction on the final cost of points. Someone say between $30 and $50pp. 10% downpayment covers a good part of it.

 

[Lorana]

Meh. I think a lot of ROFR decisions get made because they have remnant points for a certain unit and by ROFRing more of that unit they can sell all the points.

If they have 20 points across 100 units they have 2000 points and nothing to sell. Its worth it to Disney to pay a little more to get points in units they have already.

I bet if we could track the unit of the contracts taken in ROFR and the unit of points Disney owns, the decisions behind ROFR would not seem so "random."

 

[AvidDisReader]

All true in the real world, but here we are in Mickey's world.
Disney finances the purchase of they own very expensive product. Virtual money goes from one Disney's account (the finacing business unit) to another Disney's account (DVC). The purchaser gives 10% for downpayment in real money that goes into a Disney account, pays for a few months more real money into Disney's account and then foreclosures.
The virtual money disappear, but the real money paid by the unfortunate owner in the meantime are still in Disney's hands and the points are back, ready to be exchanged for more real money.
It's a mindblowingly good scheme. Zero risks and a lot of profits.

Sure, while the points are in the hands of an owner, Disney cannot use (for renting) or sell them, but it is estimated that construction cost is a very small fraction on the final cost of points. Someone say between $30 and $50pp. 10% downpayment covers a good part of it.

Like most large corps, each division is responsible for making a profit. So the financing arm is going to take a very large hit every time there is a foreclosure. Alas, my experience with over 35 years in mortgages and over 50 years in financing is not being understood. The lay person just sees that Disney is getting its points back and is reselling at a larger point price but does not understand the lost income. Oh well, it you want to believe that somehow Disney makes out profitably on foreclosure, live in your dream world. In reality it is not true.

 

[Cabius]

There are a couple of factors that make DVC foreclosures different than most other retail foreclosures.

Typically, foreclosing is a money-losing proposition because the owner is underwater. If they could sell the asset at a profit, they would!

DVC is an odd position where there are two markets, and they command a huge price premium over the underwater contract owner.

A member could owe $170/point on a PVB contract where the going rate is $140-$150, in which case they would sell at a loss.

But Disney, upon foreclosing, can turn around and sell that contract at $245/point, and often has a waiting list of direct buyers!

The delta between the open market and Disney’s direct market is theoretically enough to make these transactions profitable in some (not all!) cases. It’s not like a residential foreclosure where seizing an underwater asset means that the bank is stuck with an underwater asset.

With these two markets, the asset is literally worth more to Disney than it is to the foreclosed member. The underwater asset magically becomes an above-water asset simply because Disney is the one selling it.

Obviously foreclosure costs eat into this significantly, and each transaction is unique. I’m sure that many of these represent a loss for Disney.

But unlike traditional foreclosures, these really *can* be profitable transactions for Disney because selling directly is such a high-demand value add.

 

[CastAStone]

I disappeared for like a month so I missed some things...Did Disney start foreclosing again?

 

[zavandor]

Like most large corps, each division is responsible for making a profit. So the financing arm is going to take a very large hit every time there is a foreclosure. Alas, my experience with over 35 years in mortgages and over 50 years in financing is not being understood. The lay person just sees that Disney is getting its points back and is reselling at a larger point price but does not understand the lost income. Oh well, it you want to believe that somehow Disney makes out profitably on foreclosure, live in your dream world. In reality it is not true.

Or maybe it's you trying to apply your experience in a different market to one completely controlled and regulated by Disney. @Cabius has written an excellent post explaining why DVC is completely unique.

 

[AvidDisReader]

Or maybe it's you trying to apply your experience in a different market to one completely controlled and regulated by Disney. @Cabius has written an excellent post explaining why DVC is completely unique.

I agree with the last part of his statement in that there may be some instances that it is not a losing proposition. The one thing I tried to stay away from was the lost opportunity costs of money tied up while going thru the foreclosure process that could be earning money in a performing asset. Yes, I have even financed Time Share in my long career (no I have not underwritten Disney specific time share, which we all agree is a unique product).

 

[MBTigger]

I disappeared for like a month so I missed some things...Did Disney start foreclosing again?

I disappeared for a while after I finally made my first reservation with my new (used) first DVC contract on October - not reading the ROFR or price threads until something caught my eye today about SSR being taken in ROFR. I found a taken contract for $10 more than my purchase price, and mine, while good, was not the lowest Covid pricing...

 

[CastAStone]

DVC resale market ROFR and price updates for October:
https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-october-2020/https://www.dvcresalemarket.com/blog/dvc-right-of-first-refusal-report-rofr-october-20-report/
ROFR of a BLT contract at $161.

The glut of AKV contracts on their site is very real - there are now 67. When prices went nuts for AKV this summer there were as few as 4.

Demand, meet Supply. Do your worst.

 

[RoseGold]

The glut of AKV contracts on their site is very real - there are now 67. When prices went nuts for AKV this summer there were as few as 4.

Demand, meet Supply. Do your worst.

Flipside is VGF. They only have a handful available. Fidelity has ZERO VGF, which I have never seen before.

At the start of lockdown, VGF wasn't moving at all, and there were tons of contracts.

 

[lovethesun12]

The glut of AKV contracts on their site is very real - there are now 67. When prices went nuts for AKV this summer there were as few as 4.

Demand, meet Supply. Do your worst.

The numbers of AKV contracts are still increasing on other sites but definitely not as drastically. Prices way above market value is probably responsible for the sharp increase in their listings.

 

[Eldon32]

The glut of AKV contracts on their site is very real - there are now 67. When prices went nuts for AKV this summer there were as few as 4.

Demand, meet Supply. Do your worst.

I find it interesting they have so many when DVCStore only has 4; DVCStore had a lot more a few months ago. Their prices seem to be more in-line though.

 

[CastAStone]

I find it interesting they have so many when DVCStore only has 4; DVCStore had a lot more a few months ago. Their prices seem to be more in-line though.

I have lots of thoughts on why this is but I’ll keep them to myself. Suffice it to say that all else equal I’d probably rather buy or sell with DVCStore.com.

 

[Starport Seven-Five]

Flipside is VGF. They only have a handful available. Fidelity has ZERO VGF, which I have never seen before.

At the start of lockdown, VGF wasn't moving at all, and there were tons of contracts.

It's funny because I have never liked GF but with the walkway opening my feelings have changed a bit. I went back to look at contracts and suddenly they had jumped $20/point and there are none available.

Oh well, I didn't really like VGF that much anyways.

 

[gisele2]

So more contracts with really low price on the site https://www.buyatimeshare.com/. So I think that we may see a price drop in the next months.