Where do you think DVC resale prices are headed?

[bookwormde]

Active listing levels and changes since 7 days ago

DVC resale 313 up 11

Fidelity 148 up 2

TSS 138 down 9

 

[davidl81]

I think the distinction is that not everyone has taken a financial hit yet. We are just starting to hear about companies who are laying off people. I think a lot of companies have tried to adjust to this "new normal" and it will take a while to see who was successful and who wasn't. For large corporations it is bad PR right now to layoff mass amounts of people unless they really need to. In my sector, we think we will see more layoffs starting next year. I hope not but it seems that everyone is waiting for the virus to go away and when it doesn't adjustments will be made.

The biggest difference is the insane amount of money the govt is pumping into various parts of our system to help most people not "feel" this. Everything form increased unemployment benefits, payroll protection plan that is designed to keep people on payroll, treasury buying debt from companies to keep them afloat etc. All of these things are making COVID not appear as bad as it really is. And as long as we recover from this by 2021 from some type of vaccine/herd immunity/treatments etc the massive amount of debt we added to the country should be okay to handle. The basic idea is the great recession was the economic system having a "true" downturn that is a natural ebb and flow of the economy (thus we didn't pass trillions and trillions of packages). COVID is taking what was on the surface a strong economy and derailed it, but government intervention is much more warranted in this case.

 

[Brian Noble]

this current situation seems to have some drastic differences from the Great Recession. During the GR, everyone was hit... hard. This round, although everyone has been hit similarly with quarantines, etc, not everyone has taken a financial hit.

I'm not sure the first part is necessarily true. The pain was pretty broad, but it wasn't universal. For instance, my partner and I both work in fields that are a little bit counter-cyclical.

As for the second part, it will take time for effects to ripple through the economy. Very specific sectors were the hardest hit right away: hospitality, personal services, etc. But, those folks then tighten their belts because they have less to spend and it starts spreading. For example, they might put off replacing that car to squeeze one more year out of it instead. That reduces auto sales, and the car companies start laying people off. And they spend less. And so on. (I use that example specifically because I saw that auto sales were down about 15% in July '20 vs. July '19. That's a *big* difference.) Some of that is exacerbated because people tend to spend less during uncertain/challenging times. The US consumer sentiment index fell off a cliff in March and April; there was a bit of recovery in June but we've lost almost all of those gains again.

As @davidl81 points out, one thing that might be different is policy response: the initial response to the recession was a lot of government spending, but that quickly turned into austerity measures which in hindsigth may have been applied far too soon. The response to COVID has likewise been an initial bolus in spending, but time will tell if we repeat the follow-on early austerity measures. It is not clear what the Federal appetite is for continuing support; the House and possibly the Executive Branch is on board, the Senate less so. My bet is that the Senate mostly compromises due to pressure from above, but the next week or two should bring clarity.

I'm not as convinced the recession was a "natural" cycle so much as a structural failure of banking policy, nor do I think the current situation is completely separate from structural issues in the current economy. But, both of those topics are getting pretty far afield for a DVC discussion.

 

[CastAStone]

I apologize if someone posted this and I missed it but DVCRM posted their July average prices and they are up significantly at many resorts. As has been noted in this thread and the lowball thread repeatedly, AKV in particular has seen a huge increase in price in 2 months for no real reason at all.
https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-july-2020/

 

[Prince John Robin Hood]

I apologize if someone posted this and I missed it but DVCRM posted their July average prices and they are up significantly at many resorts. As has been noted in this thread and the lowball thread repeatedly, AKV in particular has seen a huge increase in price in 2 months for no real reason at all.
https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-july-2020/

View attachment 516220

Their numbers for July seem off based on the ROFR thread, especially for AKV. I realize they sell to people outside of disboards too but they just seem too high. Regardless, there are lots of listings out there right now starting below these July sales prices. Will be interesting to see what sort of prices they post for August.

 

[ldo]

is that average closed sales prices or listing prices? It's hard to imagine that AKV closed contracts average $118 when other brokers have listings for under $110. I think the average of closed contracts is more likely in the $105 range, IMHO, if I had to guess.

 

[Prince John Robin Hood]

is that average closed sales prices or listing prices? It's hard to imagine that AKV is closing contracts averaging $118 when other brokers have listings for under $110. I think the average of closed contracts is more likely in the $105 range, IMHO, if I had to guess.

It's supposed to be final sale price. If they sold mostly smaller contracts it's possible. If someone is motivated enough they'll start looking into AKV resale contracts being registered and see what the sale prices are.

 

[CastAStone]

is that average closed sales prices or listing prices? It's hard to imagine that AKV closed contracts average $118 when other brokers have listings for under $110. I think the average of closed contracts is more likely in the $105 range, IMHO, if I had to guess.

Sales price and given what AKV contracts were listed for on that site a month ago I believe it; I also believe that long term it will look like a 1 month outlier. You can already see inventory building and sitting on some of the larger sites; that will eventually lead to price reversal.

 

[ldo]

I'm not in the market to buy AKV, but it seems weird as a quick look finds this info from other brokers:
(# contracts, total points, average price listed, weighted average, lowest, highest)

Animal Kingdom Villas

65

11509

$110.17

$109.05

$99.00

$135.00

another broker has listings from $104-$112
TTS is $105-115
Why would anyone buy from a broker with an average of $118 when a quick internet search finds much lower contracts?

 

[Brian Noble]

I also believe that long term it will look like a 1 month outlier.

I am wondering how much of that was fueled by the perception in June that things were getting better in a COVID sense. If we think back about how things unfolded, cases in May into mid-June were pretty good as we saw the flattening effects of the lockdowns in March and April. Sales agreed to in July were likely contemplated at least a few weeks prior. This matches the Consumer Sentiment data I posted a little bit upthread: there was a burst of optimism in June that ebbed again in July.

At least around my water cooler, the summer seems to have been a slow realization that we are going to be dealing with /waves all of this for a very. long. time. Prior to that there were at least pockets of "we just have to get through this and we can get back to normal." You still see some of this, but definitely less over time.

 

[savvy101787]

As someone who was looking at AKV contracts and had an offer accepted in July, that $118pp does feel a bit high. I had a pretty wide range of what I was looking for (contracts in the 100-200 point window) and where I was looking (at least 5-7 different sites) and wasn't seeing that too often. Some of the 100 point contracts went as high as $120pp for an asking price but I can't imagine they all closed that high. I ended up having an offer accepted for 160 points at $105pp.

 

[CastAStone]

I'm not in the market to buy AKV, but it seems weird as a quick look finds this info from other brokers:
(# contracts, total points, average price listed, weighted average, lowest, highest)

Animal Kingdom Villas

65

11509

$110.17

$109.05

$99.00

$135.00

another broker has listings from $104-$112
TTS is $105-115
Why would anyone buy from a broker with an average of $118 when a quick internet search finds much lower contracts?

A few months ago all the sites were low on inventory and sellers had a lot of pricing power:

I just saw the latest $125/point for $100 point contract at AKV. No large number of banked points or anything. I just feel like this reseller really is trying to inflate the prices and what these are actually worth.

Another 100 point AKV contract for $125/pt....

because the supply got low, there were quite a few AKV that came on the market at $10 to 20 above the the market.

Usually AKV makes up about 10% of listed contracts. Right now across the 5 largest sellers it's about 6%. That may not sound like a lot but it's a 40% reduction in supply, and as a result, prices are rising. There's no reason to think that this is anything but a random fluxuation in the number of AKV listings. As a result the default expectation should be that a normal number of contracts will be listed over the coming days, weeks and months, and eventually prices will fall back to their normal levels.

 

[sethschroeder]

another broker has listings from $104-$112
TTS is $105-115
Why would anyone buy from a broker with an average of $118 when a quick internet search finds much lower contracts?

Same reason some people hit their head against the wall?

Also that broker is most like Disney from when I have talked with them (saying information that is false but outline they are not sure lol). I also think it has to do that lower contracts they will buy themselves and likely not report.

https://www.dvcresalemarket.com/selling/instant-sale/
As an example they will buy a 75 point contract with 2020 and 2021 points for $105/point themselves right now. Those instant bought contracts then go in to rental markets or get resold again for a higher price without the commission requirement.

 

[chunks]

Same reason some people hit their head against the wall?

Also that broker is most like Disney from when I have talked with them (saying information that is false but outline they are not sure lol). I also think it has to do that lower contracts they will buy themselves and likely not report.

https://www.dvcresalemarket.com/selling/instant-sale/
As an example they will buy a 75 point contract with 2020 and 2021 points for $105/point themselves right now. Those instant bought contracts then go in to rental markets or get resold again for a higher price without the commission requirement.

Prior to now...how did they do that without triggering ROFR? I.e. if they bought an AKV for $90/point and then planned to resell it for $110/point, Disneyw ould take it from em.

 

[becauseimnew]

As someone who was looking at AKV contracts and had an offer accepted in July, that $118pp does feel a bit high. I had a pretty wide range of what I was looking for (contracts in the 100-200 point window) and where I was looking (at least 5-7 different sites) and wasn't seeing that too often. Some of the 100 point contracts went as high as $120pp for an asking price but I can't imagine they all closed that high. I ended up having an offer accepted for 160 points at $105pp.

I’ve been actively looking for a small AKL contract for the last month. I haven’t seen anything less than $120 for a 100 point contract. And even those don’t last more than 24 hours. The 50 pt contracts get listed for $135 and are gone in an hour. If someone finds a 100 point contract listed for less than $115 please share with me.

 

[linzjane88]

The biggest difference is the insane amount of money the govt is pumping into various parts of our system to help most people not "feel" this. Everything form increased unemployment benefits, payroll protection plan that is designed to keep people on payroll, treasury buying debt from companies to keep them afloat etc. All of these things are making COVID not appear as bad as it really is. And as long as we recover from this by 2021 from some type of vaccine/herd immunity/treatments etc the massive amount of debt we added to the country should be okay to handle. The basic idea is the great recession was the economic system having a "true" downturn that is a natural ebb and flow of the economy (thus we didn't pass trillions and trillions of packages). COVID is taking what was on the surface a strong economy and derailed it, but government intervention is much more warranted in this case.

I wonder if things will look much worse after September--isn't September the timeline where businesses that took PPP loans had to hold employees without layoffs or something? My understanding was that they couldn't layoff until after that date but I could be a zillion percent wrong.

 

[JETSDAD]

Prior to now...how did they do that without triggering ROFR? I.e. if they bought an AKV for $90/point and then planned to resell it for $110/point, Disneyw ould take it from em.

It doesn't matter to them if it gets taken because they still get paid commission.

 

[ldo]

I’ve been actively looking for a small AKL contract for the last month. I haven’t seen anything less than $120 for a 100 point contract

smaller contracts, not just AKV, are in a different pricing category. I think PP's recent purchase of 160 AKV at $105 is probably close to market pricing currently for 150+ AKV points...will be interesting to see ROFR when they update for July. And, I bet we'll see SSRs going for low 90s, as well.

 

[CastAStone]

Prior to now...how did they do that without triggering ROFR? I.e. if they bought an AKV for $90/point and then planned to resell it for $110/point, Disneyw ould take it from em.

I think that was a feature not a bug. They got their commission from a desperate buyer without having to actually list the contract and find a buyer, and Disney taking it eliminates any carrying cost or long term risk. If prices do start seriously falling and Disney continues to not ROFR contracts, I imagine they will stop doing that.

 

[Dean]

It doesn't matter to them if it gets taken because they still get paid commission.

Actually they get paid commission on that one and the replacement contract both.