Where do you think DVC resale prices are headed?

[pineapplepalms]

I listened to the latest DVC Show pod today, which talked about potential future incentives from direct sales, which made me want to remark on my experience trying to buy into DVC. The current incentives only come into effect if you buy over 200 points, so in the case of Copper Creek (our preferred destination) that would be $44000, and you get to skim a couple of thousand off that due to the incentive. It is my thought that if you have $44000 spare in your account, you're rich enough not to need so save any money, so Disney is driving people who just want to join to the resale market. I really want to buy direct, my wife is even more keen, but unless Disney starts offering incentives that suit those of us without massive wallets, then resale is where I want to put my hard-earned cash.

I believe new members can purchase 150 points and with the incentives it would come out to $30,750. If you really like a new resort it can really make sense to buy it direct during the initial selling phase before later price hikes. When we bought CCV direct, it came out to around $158/point with incentives. If the direct benefits don't provide much value for you though, resale CCV definitely makes sense if you love the resort, and it's hard to beat CCV during the holidays.

Also this is a tangent, but I don't think having x amount of money lying around means you're rich enough to not need to save money. I would say that people who have money don't keep it or grow it by spending without thinking about saving. Also, $44K depending on where you live has a very different meaning depending on cost of living.

 

[bookwormde]

7/17 update

number of newly posted resale contracts at about 160-180% of average*


* Aggregating site is not updating so lower level is directly observed, upper level includes what is would typically only observed through the aggregating site.

 

[3 DD love princesses]

Mid-March? You must've been one of the few who got ROFR'd this year. Which property?

Edit: I see your offer's on Poly. I'd say a better chance of passing than if it had been VGF or VGC.

Yeah blt was taken. Waiting on poly

 

[NickBCV]

I think people who make great deals on contracts in this new environment are going to be super happy in the next two years When the value of their contracts goes way up.

 

[jade1]

That is some expensive property tax on that place.

And high HOA as well. If these are sitting empty (most appear to be vacation rentals) of which I have no idea-might be a reason for some to sell.

Just no idea what to think will happen with real estate down there, including DVC.

Wait it out I guess.

 

[ldo]

vacation homes tend to have higher foreclosure rates in an economic downturn, as they are not necessary. my coworker and his brother (both RE savvy) purchased foreclosure homes in Naples, FL for after the 2008 crash for huge discounts and had their choice of many.
Orlando's RE market in higher end neighborhoods was a bit inflated, IMHO. The pricing rivaled metro areas with higher costs of living.

 

[iflyjetzzz]

And high HOA as well. If these are sitting empty (most appear to be vacation rentals) of which I have no idea-might be a reason for some to sell.

Just no idea what to think will happen with real estate down there, including DVC.

Wait it out I guess.

Well, it may provide some lower priced housing for cast members?
(trying to find a silver lining)

 

[bookwormde]

7/18 update

number of newly posted resale contracts at about 160-170% of average*


* Aggregating site is not updating so lower level is directly observed, upper level includes what is would typically only observed through the aggregating site.

 

[sethschroeder]

next two years When the value of their contracts goes way up.

I don't think we bottom out until then likely or possibly it stays low until then.

Disney is not dumb and them having resorts planning to be closed until 2022 and parks on restricted access until Sept 2021 means there is going to be limited demand for a while. That is just until things open back up not get back to as busy.

There might be a couple outliers right now but I suspect this thread in December will show lower prices typically than we see right now.

 

[Frederic Civish]

Disney is not dumb and them having resorts planning to be closed until 2022 and parks on restricted access until Sept 2021 means there is going to be limited demand for a while. That is just until things open back up not get back to as busy.

I think that IF we get effective vaccines approved in the next 6 to 12 months, then Disney is going to IMMEDIATELY say, "Okay, we are going back to full capacity. You can do what you want, but we STRONGLY RECOMMEND that you get the COVID vaccine before you come."

 

[sethschroeder]

I think that IF we get effective vaccines approved in the next 6 to 12 months, then Disney is going to IMMEDIATELY say, "Okay, we are going back to full capacity. You can do what you want, but we STRONGLY RECOMMEND that you get the COVID vaccine before you come."

Being at full capacity means nothing when people are not visiting. They have full availability most days from what I have read.

Also for the prices with more limited demand this means short term (1-2 years) they will continue to drop because people are cancelling vacations for all sorts of reasons. Unfortunately people have lost jobs, been on furlough, or have reduced income (sales positions relying on sales as an example).

People can't just get back money but they will have accrued expenses for this time. 32% of home owners in July did not pay their mortgage for one reason or another as an example (in May 90% of those ended up being late which is an indicator of strained financial situations likely).

Thats not even accounting to all the reasons why people not buy: they see cash vs DVC issues that happened, they can rent cheaper (at least short term), they can get cheaper cash room (skews the math), they read about limited rooms available (tons of extra points out there both from shutdown and cancellations).

 

[bookwormde]

7/19 update

number of newly posted resale contracts at about 100-110% of average*

For the week of 7/13 to 7/19 newly posted resale contracts at about 200% of average*

* Aggregating site is not updating so lower level is directly observed, upper level includes what is would typically only observed through the aggregating site.

 

[chunks]

The weekend #s are typically lower because there are less postings on weekends and you are comparing to a 7-day average which would include weekdays, correct?

 

[davidl81]

Yesterday I just agreed on a SSR Dec use year contract at $99 a point I pay closing and 2020 MF (175 points with 122 banked from 2019 and full points in 2020 and forward). It was first listed at 107, then 101. I offered 95 but the lowest the seller would go was 99. Sure I could have passed an waited on another contract that was loaded for cheaper, but the difference from $99 to $95 on a 175 point contract was like $700. So when you are making a $19000 purchase (all in) it is hard to just let your self get caught up on a fairly small overall dollar difference.
I guess it is possible for prices to drop dramatically over the next year, but who really knows.

 

[Grumpy by Birth]

Yesterday I just agreed on a SSR Dec use year contract at $99 a point I pay closing and 2020 MF (175 points with 122 banked from 2019 and full points in 2020 and forward). It was first listed at 107, then 101. I offered 95 but the lowest the seller would go was 99. Sure I could have passed an waited on another contract that was loaded for cheaper, but the difference from $99 to $95 on a 175 point contract was like $700. So when you are making a $19000 purchase (all in) it is hard to just let your self get caught up on a fairly small overall dollar difference.
I guess it is possible for prices to drop dramatically over the next year, but who really knows.

This was our thinking in buying AKL last year. We found the perfect contract at a reasonable price. I could have offered $1-2 less per point, but the difference would have been less than $500 savings (spread over 38 years, it made each point cost 5 cents more, or about $10 extra for each annual stay) and would risk someone else getting the contract instead.

I remain happy with our purchase and what we paid. That said, we're considering adding 100-150, so I'm watching the market with interest to see where prices are headed. If prices dip lower after we buy, I'm not going to obsess over having paid "too much."

Now, if we buy at something like $90 and then prices drop all the way to $60, I'll feel a little bad for having paid $4-5K too much. But I'm not going to wring my hands about it. In fact, that might be the perfect excuse to add another 100 points or so!

 

[sethschroeder]

Yesterday I just agreed on a SSR Dec use year contract at $99 a point I pay closing and 2020 MF (175 points with 122 banked from 2019 and full points in 2020 and forward). It was first listed at 107, then 101. I offered 95 but the lowest the seller would go was 99. Sure I could have passed an waited on another contract that was loaded for cheaper, but the difference from $99 to $95 on a 175 point contract was like $700. So when you are making a $19000 purchase (all in) it is hard to just let your self get caught up on a fairly small overall dollar difference.
I guess it is possible for prices to drop dramatically over the next year, but who really knows.

The loaded contract really adjust thats price down to the $88-$90/point area which is a pretty good deal for right now. Prices will drop but if you are using the points and booking a trip soon then it might not be worth it to wait.

 

[davidl81]

The loaded contract really adjust thats price down to the $88-$90/point area which is a pretty good deal for right now. Prices will drop but if you are using the points and booking a trip soon then it might not be worth it to wait.

Yeah the way I look at it is I can easily rent the 122 points at $15 a point so $1830 (and I did not pay MF on these points). So that takes the sales price from $17,300 to about $15,500 or $88 a point. And a contract at $88 with full 2020 and forward points would not last more than a day on a listing site.

I also highly value banked/loaded points. So much so where I will not even consider a stripped contract when looking at resale unless it was ridiculously under priced.

 

[ldo]

This was our thinking in buying AKL last year. We found the perfect contract at a reasonable price. I could have offered $1-2 less per point, but the difference would have been less than $500 savings (spread over 38 years, it made each point cost 5 cents more, or about $10 extra for each annual stay) and would risk someone else getting the contract instead.

this is what I thought/did when I bought resale contract. It was the perfect UY/# points and I didn't want to risk losing it over less than $500.

 

[EYL]

Yesterday I just agreed on a SSR Dec use year contract at $99 a point I pay closing and 2020 MF (175 points with 122 banked from 2019 and full points in 2020 and forward). It was first listed at 107, then 101. I offered 95 but the lowest the seller would go was 99. Sure I could have passed an waited on another contract that was loaded for cheaper, but the difference from $99 to $95 on a 175 point contract was like $700. So when you are making a $19000 purchase (all in) it is hard to just let your self get caught up on a fairly small overall dollar difference.
I guess it is possible for prices to drop dramatically over the next year, but who really knows.

While I don't disagree with your math, the way you're thinking proves that there's more demand than supply. But if it turns to a supply-rich market, it may be the seller who needs to think "I should sell for $4/pt less because it's only $700 less". Just food for thought for all. Not intended to be an argument...

 

[Grumpy by Birth]

While I don't disagree with your math, the way you're thinking proves that there's more demand than supply. But if it turns to a supply-rich market, it may be the seller who needs to think "I should sell for $4/pt less because it's only $700 less". Just food for thought for all. Not intended to be an argument...

Good point. When we bought, COVID wasn't on anyone's radar and all indications were that prices would only continue to rise. So "only" paying $500 more was reasonable. Depending on where the market is headed, the seller accepting "only" $500 (or however much) less may very well occur once it becomes a buyer's market.