Where do you think DVC resale prices are headed?

[Perelandra]

I hate to say this, and at the same time can't believe I feel like it needs to be said, but putting your entire economy on coma indefinitely (for at the very, very minimum 3 months) is going to have lasting effects that far EXCEED 2008, especially in the discretionary travel sector. So, to get back to topic, I would expect some very good bargains on DVC around the end of this year. I hope and pray that I'm wrong.

 

[Galun]

How is it not a “structural issue” with the economy that literally only two weeks of halving of economic activity has caused markets to crash 30%, major corporates to beg for cash, draw down on their corporate revolvers, lift guidance and cloak layoffs as “furloughs”.

I assure you, that represents a ‘structural’ economic issue.

The underlying economy is fine. It’s a working capital / cash flow issue. Corporations don’t let cash sit around doing nothing to plan for a contingency in case of a pandemic that shuts down the entire economy for a month or two. Nor should they.

There is a difference between temporary cash flow / liquidity issue caused by a black swan event, which is what we have now, vs. structural underlying issue like an over levered consumer in 2008.

Anyways, differing views makes markets. I am buying now because I think prices will stabilize. If the resale market actually crash, I will plan to buy more.

 

[Perelandra]

I am not so sure that 2 or 4 or 6 trillion dollar bailouts from an entity that cannot even produce a dollar, is going to just make for temporary cash flow issues. How do we not end up with hyperinflation? Anyway, I hope you are right.

 

[lovethesun12]

IMO

Unemployment claims vastly over represent true unemployment, as many employers are furloughing their employees so they can get unemployment immediately from the government.

Stimulus bill essentially gives small businesses 2 months worth grant of payroll and rent support. There small businesses account for around 40% of US workforce. For large businesses, they get separate grants and loans to keep paying people. If 2 months of support is not enough, new stimulus bill will be passed, because it’s an election year and nobody wants to be seen in the way of obstructing people getting paid. This is basically a case of the entire economy being too big to fail.

This is not a structural issue in the economy. It’s a new disease that people currently don’t have no immunity to. In the short term, rapid testing has already been invented, and in the process of scaling up manufacturing. Once we have that, we can lift quarantine, open up the economy, and use rapid testing to pinpoint hotspots for response. Longer term, there is a well developed vaccine development process so it’s just a matter of time.

I agree that Disney vacation is discretionary. Many people’s lives will be disrupted, some in catastrophic ways. Prices will certainly drop. But this is not 2008 where It’s a systemic issue of people who can’t afford to buy houses stretching into them and get wiped out - in that situation people have to fire sell assets to try to keep their home. In this case, I think we are looking at a couple months of disruption in cash flow, and the US government is at the very least providing a 2 month cushion In cash flow. People’s monthly dues are already paid until 2021. If you need cash immediately, it will take two months to get the cash from a DVC sale even if it sells immediately. Therefore I think prices will drop but I don’t think there will be a fire sale.

I'm not sure I agree that people won't have to fire sell assets. I really hope I'm wrong. But we are talking about 6.6 million people, with many millions more possibly concerned about the *possibility* of being laid off, and I would imagine many of them will be receiving less than their regular salary. There is a lot of uncertainty with this and there is no way you can convince me people who are laid off are not worried at all about when they will return to work. I'm sure many are taking a look at what extras they can cut and where they can save to stay afloat. And if you are talking about a several thousand dollar payment approaching many may not be as concerned with taking a loss on point value as they are with coughing up that payment.

 

[TheGecko]

The underlying economy is fine. It’s a working capital / cash flow issue. Corporations don’t let cash sit around doing nothing to plan for a contingency in case of a pandemic that shuts down the entire economy for a month or two. Nor should they.

There is a difference between temporary cash flow / liquidity issue caused by a black swan event, which is what we have now, vs. structural underlying issue like an over levered consumer in 2008.

Anyways, differing views makes markets. I am buying now because I think prices will stabilize. If the resale market actually crash, I will plan to buy more.

This crash is much different than the last few. Companies got drunk on cheap credit to fund stock buybacks instead of expanding operations/wages/productivity. Now they are sitting on piles of debt with now revenue coming in. That money spent to boost the share price has been eroded into nothing. The companies cannot pay their dividends either. Kind of sad, but it shows how much of a crapshoot the Wall Street roulette wheel can be at times. I can't see Disney turning around anytime soon with the parks closed and Moviegoing will be down for sure for quite some time.

DVC prices will go down, but unfortunately, the Maintenance costs will probably go up quite a bit if the shared resorts have less foot traffic in the non DVC portions.

 

[Perelandra]

I'm not sure I agree that people won't have to fire sell assets. I really hope I'm wrong. But we are talking about 6.6 million people, with many millions more possibly concerned about the *possibility* of being laid off, and I would imagine many of them will be receiving less than their regular salary. There is a lot of uncertainty with this and there is no way you can convince me people who are laid off are not worried at all about when they will return to work. I'm sure many are taking a look at what extras they can cut and where they can save to stay afloat. And if you are talking about a several thousand dollar payment approaching many may not be as concerned with taking a loss on point value as they are with coughing up that payment.

Ok. This is embarrassing, but for others reading this at this important time, I will say, I have made over $200,000 and over $250,000 for most of the last 10 years. I backed out of our DVC resale contract offer that I made at a very good price, and have cut off my cable service, my lawn service, and my maid service in the last 30 days. I have nothing left but my mortgage, and a beach house I'm stuck with in Florida. We are no longer ordering out and we are rationing food. If you really are going along with life as normal at this point, I hope you are right.

 

[Sandisw]

Ok. This is embarrassing, but for others reading this at this important time, I will say, I have made over $200,000 and over $250,000 for most of the last 10 years. I backed out of our DVC resale contract offer that I made at a very good price, and have cut off my cable service, my lawn service, and my maid service in the last 30 days. I have nothing left but my mortgage, and a beach house I'm stuck with in Florida. We are no longer ordering out and we are rationing food. If you really are going along with life as normal at this point, I hope you are right.

PrAyers and

 

[icc2515]

IMO the real deals on DVC contracts will not happen until the maint fee bills come out. People can sit on their contracts for now and see where the economy heads When they are faced with a $1500 bill and no job it will be crunch time.

 

[Cowgirl_Jessie]

Ok. This is embarrassing, but for others reading this at this important time, I will say, I have made over $200,000 and over $250,000 for most of the last 10 years. I backed out of our DVC resale contract offer that I made at a very good price, and have cut off my cable service, my lawn service, and my maid service in the last 30 days. I have nothing left but my mortgage, and a beach house I'm stuck with in Florida. We are no longer ordering out and we are rationing food. If you really are going along with life as normal at this point, I hope you are right.

I hope you are no longer embarrassed; sharing our truth is courageous and real. I pray and hope the economy and health situation starts to rebound quickly. It sounds like your have made good mitigations quickly.

 

[sethschroeder]

Now what happens with the greatest economic downturn in a 100 years is anyone's guess.

Except 2007/2009 was worse where the DOW dropped 54% and wiped out 12 years of growth.

We have only wiped out 4 years of growth right now and at the bottom it was a 35% reduction now sitting at 28%.

Also understand the markets tanked for very different reasons and this market is bound to rebound upon signs of lock downs ending even if there is longer restrictions.

Things could get worse we will see.

 

[Cowgirl_Jessie]

Quick question, what do we think the odds would be on a one time maintenance fee assessment per point to offset lack of revenue? Or a hike in next years’s maintenance fees?

 

[sethschroeder]

Quick question, what do we think the odds would be on a one time maintenance fee assessment per point to offset lack of revenue? Or a hike in next years’s maintenance fees?

MFs are to pay the costs to run the resort not to make a profit.

 

[lovethesun12]

Ok. This is embarrassing, but for others reading this at this important time, I will say, I have made over $200,000 and over $250,000 for most of the last 10 years. I backed out of our DVC resale contract offer that I made at a very good price, and have cut off my cable service, my lawn service, and my maid service in the last 30 days. I have nothing left but my mortgage, and a beach house I'm stuck with in Florida. We are no longer ordering out and we are rationing food. If you really are going along with life as normal at this point, I hope you are right.

I would not be embarrassed at all. You're not alone in this! For the record, this will be short term pain we all need to get through - science has a solution to this there is no doubt there. Jobs will return. I'm just not convinced luxury items like DVC will rebound as quickly.

 

[Cowgirl_Jessie]

MFs are to pay the costs to run the resort not to make a profit.

Yes. Apologies for my lack of clarity in communication. With the resorts closed for an extended time, isn’t there more expense to run the resort that doesn’t get picked up in some part by regular visitors?

 

[sethschroeder]

Yes. Apologies for my lack of clarity in communication. With the resorts closed for an extended time, isn’t there more expense to run the resort that doesn’t get picked up in some part by regular visitors?

No because everyone splits the costs all the time. Disney has to pay based on the points they hold.

Disney might make more or less money but that does not matter.

Only thing might happen is a slight reduction because of no daily costs of labor and upkeep during this time.

 

[Cowgirl_Jessie]

No because everyone splits the costs all the time. Disney has to pay based on the points they hold.

Disney might make more or less money but that does not matter.

Only thing might happen is a slight reduction because of no daily costs of labor and upkeep during this time.

Thanks!

 

[Deploraboo]

The underlying economy is fine. It’s a working capital / cash flow issue. Corporations don’t let cash sit around doing nothing to plan for a contingency in case of a pandemic that shuts down the entire economy for a month or two. Nor should they.

There is a difference between temporary cash flow / liquidity issue caused by a black swan event, which is what we have now, vs. structural underlying issue like an over levered consumer in 2008.

Anyways, differing views makes markets. I am buying now because I think prices will stabilize. If the resale market actually crash, I will plan to buy more.

The “underlying economy” is not ”fine”. Not by any calculable measure.

 

[Deploraboo]

Quick question, what do we think the odds would be on a one time maintenance fee assessment per point to offset lack of revenue? Or a hike in next years’s maintenance fees?

100% metaphysical certitude.

 

[RivShore]

I am not so sure that 2 or 4 or 6 trillion dollar bailouts from an entity that cannot even produce a dollar, is going to just make for temporary cash flow issues. How do we not end up with hyperinflation? Anyway, I hope you are right.

We all were probably saying that after the 2008 bailouts and it never came...in fact the fed has been more worried about deflation since then. It's a much different world and that assumption may not be automatic any more with the global labor market and technology advancements always pushing back against inflation.

 

[Matty B13]

You don't get inflation if employers don't raise wages higher than the rise of GDP, I know I've only gotten a raise of 2% any year over the last 10+ years.