Where do you think DVC resale prices are headed?

[sethschroeder]

I wouldn't expect a lot of ROFR activity anytime soon.

https://www.wsj.com/articles/disney-loses-nearly-5-billion-as-pandemic-slams-theme-parks-11596573570

Ya I talked to someone at one of the main 3 brokers today and they said "if DIsney lets that price get through ROFR" I laughed a little bit inside. Its like you know they have maybe taken 1 or 2 contracts since April right? Just doing their job though trying to drive up offer prices so that hopefully the seller agrees.

 

[chunks]

To an extent but resale has to be missing key things for people to forgo resale for direct at larger deltas.

Here is the future issues:

• COVID19 is going to dramatically put "timeshares are bad" to the forefront
• A larger percentage of buyers are from the "internet age" and soon the "cellphone age" meaning they look up everything online
• As prices go down on resale it will be posted more that DVC is like "any other timeshare" with no resale market (most people right now even when selling come out fairly good) which will turn the general perspective when searching about DVC
• As prices go down its hard to institute higher direct prices, its easy to put in a $20/point price increase on all resorts when resale is increasing
• 2042 contracts will start their steady decline in 2032 as they count down the decade to expiration, giving people the ability to buy a resale contract as a rental alternative vs today where its a large investment for 25+ years and thus people are more willing to splurge on direct pricing
• Every resale contract that doesn't get taken lowers the next contract that much more, when a ROFR is exercised it does the flipside and raises the future prices as buyer A already has a contract and is not competing with buyer B on the next contract.

They have to balance lots of things and its not a simple task to unwrap it all.

Just to note there will always be people who are clueless but that will become more difficult as less people are from prior to the information age. It will also be harder to have "semi-clueless" buyers who only do a "is DVC a scam" search to find today that many people are happy with it.

Agree that the internet millenial is going to crush the direct vs resale debate as it will become very clear that there is limited difference. Disney is trying to get ahead of it with their restrictions. However, as long as people want riviera, there will be a decent resale market, particularly with the ability to rent out points.

 

[CastAStone]

Ya I talked to someone at one of the main 3 brokers today and they said "if DIsney lets that price get through ROFR" I laughed a little bit inside. Its like you know they have maybe taken 1 or 2 contracts since April right? Just doing their job though trying to drive up offer prices so that hopefully the seller agrees.

When I looked last week I didn’t see any evidence they had taken any. I’m 99% sure that the ones I couldn’t figure out were auction wins.

 

[Dean]

How long did they hold off for (to the best you remember)?

It was a couple of years and prices dropped to maybe half of what they were just previously with those sales going through. I remember people completing sales for SSR at and just under $40, VB for under $30, BWV for $50 and VWL for $42.50 and these were not dinosaur sized contracts. This was not unique to DVC, other timeshares companies saw the same thing happening. Companies held on to cash and they knew that anything they did buy back would likely be a while before they could turn it over. That's not to say they didn't take anything but it was very little.

 

[bookwormde]

8/4 update

number of newly posted resale contracts at about 120% of average

 

[dvc lover 1970]

Buy resale. We own at CCV love the resort. Wait another year...I thinknwe are heading into recession/depression and prices will be steadily drop.

 

[becauseimnew]

I think they finally hit a ceiling price on AKV - a 50 pt contract has lasted almost 24 hours on DVC Resale site. And an 80 point contract has been on there for over a week.

 

[firedust]

I think they finally hit a ceiling price on AKV - a 50 pt contract has lasted almost 24 hours on DVC Resale site. And an 80 point contract has been on there for over a week.

good! I'm waiting on AKL to settle down so we can snag a 100 point contract!

 

[becauseimnew]

good! I'm waiting on AKL to settle down so we can snag a 100 point contract!

Stay away from my April 100 point contract

 

[firedust]

Stay away from my April 100 point contract

I'm more an October, or December, 100 point kind of girl

 

[Brian Noble]

Just to note there will always be people who are clueless but that will become more difficult as less people are from prior to the information age.

Agree that the internet millenial is going to crush the direct vs resale debate as it will become very clear that there is limited difference.

I'm not so sure about this. For starters, millennials (Gen Y) are currently 26-40. These folks are actively buying timeshares right now. A Consumer Reports article from 2016 quotes:

Though the median age of timeshare owners is 51, the concept resonates loudly with younger people. Among owners who have bought in recent years, the median age is 39.

Those folks are almost certainly web-search-literate; the use of the word "google" as a verb appeared in popular culture as early as 2002. Likewise, there are already plenty of timeshares that have little or no resale value, have similarly cosmetic differences between resale and retail, yet still sell ownerships at full-freight. Wyndham is a good example, but there are others. So, the information is there, and the differences are stark and usually very clear: a secondary-market purchase is just a better deal. So, why do people still buy from developers? My guess: people who buy timeshares do not want to know that they spent more than they could have. If someone doesn't want to know something, it doesn't matter what the facts are. That sounds hard to believe, but bear with me.

Think about how the business works. Timeshares are a product that is sold, not bought. Very few people go on vacation with a plan to buy a timeshare---DISboards company excepted, of course. . Instead, a family is on vacation having the time of their lives. They take a tour, where they are told that they can bottle this magical feeling they have forever, "vacationing for decades to come at the cost of a handful of trips like today's." This sounds like a grand idea---and, really, it is! But it is also just a little bit aspirational: it means taking more vacations, more often, in a little more luxury than they are used to. And this possibility is presented to them in a way that has payments that seem affordable for the next few years. So they buy.

Now, you have a new buyer who feels really good about the decision they just made. Maybe they have kids who are in grade school, and they are imagining taking them on vacation every year in a way that they never have before. Maybe their kids are older and they are thinking about grandchildren down the pike. Maybe they are about to become empty nesters and imaging all the travel they've put off while they've been raising a family. Suddenly there is an easy way to do whatever it is that they are thinking about.

That person is probably not going to spend the next several days trying to come up with reasons why this good decision they just made was a bad idea. And, once that period passes, the timeshare is irrevocably theirs. Of course, some will, because it is a lot of money. Some of those will see the cosmetic differences between resale and retail and convince themselves that they were right all along. Some will rescind. But, few enough will rescind that the overall business model still works for the developer, and the world keeps spinning.

 

[limace]

Stay away from my April 100 point contract

Me too! August for me though so we are good.

 

[becauseimnew]

I'm more an October, or December, 100 point kind of girl

Me too! August for me though so we are good.

What price are you hoping to get? I’ll keep an eye out for your contract. I’m hoping to pay closer to $105/pt. Dream would be a loaded April contract.

 

[sethschroeder]

I'm not so sure about this. For starters, millennials (Gen Y) are currently 26-40. These folks are actively buying timeshares right now. A Consumer Reports article from 2016 quotes:


Those folks are almost certainly web-search-literate; the use of the word "google" as a verb appeared in popular culture as early as 2002. Likewise, there are already plenty of timeshares that have little or no resale value, have similarly cosmetic differences between resale and retail, yet still sell ownerships at full-freight. Wyndham is a good example, but there are others. So, the information is there, and the differences are stark and usually very clear: a secondary-market purchase is just a better deal. So, why do people still buy from developers? My guess: people who buy timeshares do not want to know that they spent more than they could have. If someone doesn't want to know something, it doesn't matter what the facts are. That sounds hard to believe, but bear with me.

Think about how the business works. Timeshares are a product that is sold, not bought. Very few people go on vacation with a plan to buy a timeshare---DISboards company excepted, of course. . Instead, a family is on vacation having the time of their lives. They take a tour, where they are told that they can bottle this magical feeling they have forever, "vacationing for decades to come at the cost of a handful of trips like today's." This sounds like a grand idea---and, really, it is! But it is also just a little bit aspirational: it means taking more vacations, more often, in a little more luxury than they are used to. And this possibility is presented to them in a way that has payments that seem affordable for the next few years. So they buy.

Now, you have a new buyer who feels really good about the decision they just made. Maybe they have kids who are in grade school, and they are imagining taking them on vacation every year in a way that they never have before. Maybe their kids are older and they are thinking about grandchildren down the pike. Maybe they are about to become empty nesters and imaging all the travel they've put off while they've been raising a family. Suddenly there is an easy way to do whatever it is that they are thinking about.

That person is probably not going to spend the next several days trying to come up with reasons why this good decision they just made was a bad idea. And, once that period passes, the timeshare is irrevocably theirs. Of course, some will, because it is a lot of money. Some of those will see the cosmetic differences between resale and retail and convince themselves that they were right all along. Some will rescind. But, few enough will rescind that the overall business model still works for the developer, and the world keeps spinning.

So let me walk you my thoughts on it.

• Median age of 39 in 2016 would be 43/44 now
• 39/40 is the absolute oldest to be part of "Gen Y" (35/36 in 2016)
• 50% of purchasers were older than 39 (as of 2019 52% of people are under 39 and older people are vastly more likely to have already purchased a TimeShare historically since its a long term investment typically and not a retirement resort/home)
• Someone who is 39 was half way through college before 50% the US was even using the internet (1999-2000)
• The iPhone (internet everywhere) did not launch until 2007
• In 2007 someone who is 39 now would have been 27 and had half decade in the work force
• 2010 likely would be the first year of "always have internet access"
• The first group to always have internet everywhere would like be a HS freshman in 2010, born in 1995, 25 right now

Over the next 2 decades older generations will be replaced with the younger generations who don't really know life without always having access to all information at their finger tips and always looking at reviews (Yelp - 2004, Google Maps Reviews - ????, Trip Advisor - 2000, Reddit - 2005).

You may disagree though 20 years ago that there would be a disproportionate number of young individuals who would be buying TimeShares than older individuals. I couldn't find data but I just think it makes sense that 20-40 historically would make up a large majority of Timeshare sales while older groups 50-70 would make up retirement community/condo/home purchases.

 

[Brian Noble]

Fair enough, but how many people do you know in their 50s who don't immediately look on their phones when they want to know something right now, today? Maybe I walk in unusual circles, but I doubt it's all that unusual vs. the average DVC candidate.

Either way, I think you are under-estimating the ability of humans to convince themselves that they are right despite all evidence to the contrary. (And there are plenty of natural experiments running right now that lend support to the idea that humans are very very good at this.)

 

[sethschroeder]

Fair enough, but how many people do you know in their 50s who don't immediately look on their phones when they want to know something right now, today?

Might just be who I work with but I do work in tech but most don't pull it out if they are even in their late 40s. Search is also a skill so going through school I think helps people learn the skill better.

Either way, I think you are under-estimating the ability of humans to convince themselves that they are right despite all evidence to the contrary. (And there are plenty of natural experiments running right now that lend support to the idea that humans are very very good at this.)

Oh I 100% know there will be people who are still easy marks and will purchase. I just think every new resort gets you closer to the saturation point of "easy marks". I also think Disney is proactively addressing this because knowledgeable buyers who choose to buy right now are probably 50/50 direct/resale while in the future its going to skew towards direct with the resale restrictions and more resorts falling off the booking catalog for resale points.

 

[Brian Noble]

I just think every new resort gets you closer to the saturation point of "easy marks".

The good news for Disney: the world constantly produces new families with young school-aged kids, some of whom find their way to WDW. So there is a steady supply of new people that they can match to the supply of new resorts. Those people would love to find an "affordable" way to go back frequently. To (slightly mis-)quote Blake (Alec Baldwin) in Glengarry Glen Ross: "They'll be sitting out there, waiting to give someone their money!" I suspect DVC will find ways to take it.

What's more, I think we collectively also underestimate the emotional power of the Blue Card and all that goes with it, of being "full" members with each and every point having the most flexible possible use, even if it costs more. After all, once we get high enough on Maslow's hierarchy, that's what money is for, spending on things that bring us emotional satisfaction. Disney's entire business model is selling happiness at a premium; they are better at it than anyone.

 

[Dean]

Regardless timeshares are one of the things that people tend to impulse and buy emotionally and many don't check out prior to buying. More will check out the options after buying and some of those will be within their cancelation window. Whether the current generation will be more likely to check things out, I really don't think so for other reasons just like they often buy other things they can't afford. Most that realize it was a bad choice still won't cancel. I'm not aware of anything that tends to turn otherwise smart and cautious people into mindless robots better than a timeshare sales presentation. I just heard a call on the radio this week about someone who knew it was a bad choice but his wife wanted it so they bought anyway. Timeshare sales people are some of the best salespeople in the world and they can play you like a fiddle even when you know more than they do about the subject. It's really not about who or what % say no but rather how many say yes. I've seen people who were educated here at DIS make horrible purchase decisions because "they trusted disney" or they "didn't want to buy used" or because the process was "simpler" and so on.

 

[Prince John Robin Hood]

What price are you hoping to get? I’ll keep an eye out for your contract. I’m hoping to pay closer to $105/pt. Dream would be a loaded April contract.

I'm interested in AKL as well but want Feb or Mar use year and ideally 150-200 points.

I'll leave the April, August, October and December contracts for you guys

 

[MMSM]

I must of read 1000 of pages on the Disboards about buying DVC. A lot of posts have shown me the light in going for resale and not direct. I can't even find Disney's direct listings- I have to talk directly with someone with all my information. I usually go to Disney in March or April (spring break- I am a teacher). I have only stayed (through rented points) at Beach Club (AND LOVED IT). We were supposed to go to Poly and BLT this March but obviously we are rescheduled for this 2021 break. I have a 13 and 15 year old so I always want studios that fit 5 people. Moving forward, I can see wanting one bedrooms (although AK, BLT, VGF, OKW, and Riveria are only ones that fit 5?). My husband and I are 41 and I am not sure if this is a good move. He keeps thinking there is "more than Disney" out there. However, I can see my husband and I loving it and also hoping to have grand kids there. What Use Year should I hope for? A sales person chatted and told me September, Oct, or November is best. Is it better to have smaller contracts like 100 or go for 200? If I really love Beach Club should I try for that despite the higher payments and dues? Or should I buy Saratoga and then hope for the best at 7 months that I can grab BLT, Poly, or Beach Club. I am sorry for all these questions. It is very overwhelming. However, is this the best time for a buyer?