Where is bottom?

[Robbie Cottam]

At some point, IMHO, the price gets so low that Disney buys the points and turns them back into cash inventory…. Or something to that effect to comply with the POS.

They simply can’t let the product or their name get devalued to the bargain basement point.

 

[tom1944]

At some point, IMHO, the price gets so low that Disney buys the rooms and turns them back into cash inventory…. Or something to that effect to comply with the POS.

They simply can’t let the product or their name get devalued to the bargain basement point.

I can see that although I would not base any purchase I make on that possibility

 

[Robbie Cottam]

I can see that although I would not base any purchase I make on that possibility

I only buy direct. I won’t be !

 

[Johtull12]

What about 10 year timeshare loans at 12-17%?

That would be borderline predatory, I don't think to many people are doing that. Those are like credit card rates, is that with Disney offers for financing? Hopefully most ppl are paying cash or financing in 12 to 24 months, especially in todays rate environment and buying in tranches when they have the money saved.

 

[Robbie Cottam]

That would be borderline predatory, I don't think to many people are doing that. Those are like credit card rates, is that with Disney offers for financing? Hopefully most ppl are paying cash or financing in 12 to 24 months, especially in todays rate environment and buying in tranches when they have the money saved.

Disney direct is 9 percent

 

[DonMacGregor]

Disney direct is 9 percent

Which is only 1.25% above prime...

 

[AnnaKristoff2013]

If you can get a seven year loan at 0% Apr it actually is good financial sense with the falling value of the dollar etc.

I have never seen an 84 month 0 percent APR car loan with any car's finance company, even when the fed rate was 0. Maybe 60 months.

 

[Sandisw]

I have never seen an 84 month 0 percent APR car loan with any car's finance company, even when the fed rate was 0. Maybe 60 months.

We had the ability to do 72 months once, but still went with leasing as we like to trade in every three years.

Just remember, cash vs finance is an individual decision and not everyone will make the same financial decisions as someone else because only that person knows what their situation is.

IMO, the bigger piece is making sure someone under pros/cons of their choice and have at least thought about what ifs…if they have and feel financing is the way to go, then it was the right decisions for them because what might be important for one in terms of financial goals may be different for someone else.

 

[Cfabar1]

At some point, IMHO, the price gets so low that Disney buys the points and turns them back into cash inventory…. Or something to that effect to comply with the POS.

They simply can’t let the product or their name get devalued to the bargain basement point.

I think we are a LONG way off from that…. Sellers aren’t ready to go down that road yet…. Also, DVC is going to have to let prices start collapsing on 2042 resorts… especially the beach ones… they’re not going to want to buy huge VB or HHI inventory and have to pay those maintenance fees to themself… VB is already trading in the $50-60 pp range… That will continue to erode…

That’s a big part of the problem… we are now at 18 years left…

 

[Cfabar1]

Just remember, cash vs finance is an individual decision and not everyone will make the same financial decisions as someone else because only that person knows what their situation is.

IMO, the bigger piece is making sure someone under pros/cons of their choice and have at least thought about what ifs…if they have and feel financing is the way to go, then it was the right decisions for them because what might be important for one in terms of financial goals may be different for someone else.

Yes. I personally don’t really have a desire to finance DVC and will likely pay only cash for any present and future purchases. However, I think people can make their decisions, and might feel that financing is best for them. Clearly Disney sees it to their benefit, and apparently so do many customers…

 

[Robbie Cottam]

I think we are a LONG way off from that…. Sellers aren’t ready to go down that road yet…. Also, DVC is going to have to let prices start collapsing on 2042 resorts… especially the beach ones… they’re not going to want to buy huge VB or HHI inventory and have to pay those maintenance fees to themself… VB is already trading in the $50-60 pp range… That will continue to erode…

That’s a big part of the problem… we are now at 18 years left…

I pretend those beach resorts aren’t Disney to begin with….. so yea yea those can trade at any price.

But the newer resorts, Disney need to protect the value there.

 

[Cfabar1]

But the newer resorts, Disney need to protect the value there.

Well… sort of…. Aulani is at best holding its value…. Yes, I know it is beach resort…

Riviera prices in resale are significantly lower than direct due to the restrictions… which appears to be a DVC roadmap… the Disneyland tower will be telling…. If so, resale prices will be collapsing long term….

Poly and VGF will be interesting to monitor - new association or the same? Same association will prop up resale prices… new association will cause lower resale prices due to restrictions…. It is interesting that CC (the last resort prior restrictions) is the ONE resort that they are ROFR at the moment… It makes me think that restrictions are going to stick around for a while…. But who knows….

 

[Robbie Cottam]

Well… sort of…. Aulani is at best holding its value…. Yes, I know it is beach resort…

Riviera prices in resale are significantly lower than direct due to the restrictions… which appears to be a DVC roadmap… the Disneyland tower will be telling…. If so, resale prices will be collapsing long term….

Poly and VGF will be interesting to monitor - new association or the same? Same association will prop up resale prices… new association will cause lower resale prices due to restrictions…. It is interesting that CC (the last resort prior restrictions) is the ONE resort that they are ROFR at the moment… It makes me think that restrictions are going to stick around for a while…. But who knows….

Will prices collapse?

right now Riviera is the only resort with that restriction…. It’s an outlier…. There are many other options to choose from.

when options are limited people with either buy it resale with it restrictions or buy direct….

you may find that once the Disneyland tower and the poly tower are built, will all new resales are also deed restricted ….

who knows

 

[Stank]

Will prices collapse?

right now Riviera is the only resort with that restriction…. It’s an outlier…. There are many other options to choose from.

when options are limited people with either buy it resale with it restrictions or buy direct….

you may find that once the Disneyland tower and the poly tower are built, will all new resales are also deed restricted ….

who knows

Yes, prices will collapse. I’ve made the argument ROFR supporting prices is all theoretical/sounds good on paper. Disney ROFR’d resorts well above where they are currently. Also, ROFR only takes place if there are buyers. People think it’s outrageous you could have a no-bid situation on DVC. Less than 3 years ago I saw oil drop $60/barrel in a single day. People said oil couldn’t go negative because structurally it doesn’t make sense. It went to -$37. You had to pay someone $37,000 to take your 1000 barrel contract. So I hesitate to say it’s inconceivable DVC resale freezes up on the buy-side given the “unprecedented” things I’ve seen in the past 3 years.

So ROFR is only a thing if 1) there are buyers and 2) if Disney is even ROFRing. Otherwise list prices can drop and ROFR can just sit and watch until someone buys a contract. As I mentioned, Disney has a $10 billion bill due for Hulu end of this year. Disney ain’t about to squander and lock up cash in ROFR day trade speculating.

Finally, for those who think I’m too cheerful, we just got the second largest drop in real disposable incomes in history. The biggest? 1932, the height of the Depression. We also had the largest 401K hardship withdrawals in history in 2022 as a percentage of employed workers taking money out of retirement. Higher % than in 2020 and 2009.

The economy is akin to Wile E Coyote walking off the side of the cliff not realizing there’s no solid foundation below until he looks down. We’re in the most complacent suspended sense of reality I’ve seen—and it makes sense it’s occurring at the same time our top experts aren’t ruling out extraterrestrials with the recent UFO games. These are the type of things you see when things become unmoored in society and the economy.

 

[AstroBlasters]

Yes, prices will collapse. I’ve made the argument ROFR supporting prices is all theoretical/sounds good on paper. Disney ROFR’d resorts well above where they are currently. Also, ROFR only takes place if there are buyers. People think it’s outrageous you could have a no-bid situation on DVC. Less than 3 years ago I saw oil drop $60/barrel in a single day. People said oil couldn’t go negative because structurally it doesn’t make sense. It went to -$37. You had to pay someone $37,000 to take your 1000 barrel contract. So I hesitate to say it’s inconceivable DVC resale freezes up on the buy-side given the “unprecedented” things I’ve seen in the past 3 years.

So ROFR is only a thing if 1) there are buyers and 2) if Disney is even ROFRing. Otherwise list prices can drop and ROFR can just sit and watch until someone buys a contract. As I mentioned, Disney has a $10 billion bill due for Hulu end of this year. Disney ain’t about to squander and lock up cash in ROFR day trade speculating.

Finally, for those who think I’m too gloomy, we just got the second largest drop in real disposable incomes in history. The biggest? 1932, the height of the Depression. We also had the largest 401K hardship withdrawals in history in 2022 as a percentage of employed workers taking money out of retirement. Higher % than in 2020 and 2009.

The economy is akin to Wile E Coyote walking off the side of the cliff not realizing there’s no solid foundation below until he looks down. We’re in the most complacent suspended sense of reality I’ve seen—and it makes sense it’s occurring at the same time our top experts aren’t ruling out extraterrestrials with the recent UFO games. These are the type of things you see when things become unmoored in society and the economy.

I think you could start your paragraphs with the words “in my opinion”, since you (or any other human for that matter) don’t actually know what is going to happen.

 

[Stank]

I think you could start your paragraphs with the words “in my opinion”, since you (or any other human for that matter) don’t actually know what is going to happen.

Literally seeing the worst data on major indicators: yield curve severely inverted (worst in over 40 years). Warehouse rates for goods skyrocketing—inventory is so piled up and retailers can’t get rid of it that we don’t even have the space to store it. The opposite of the ports issue 12 months ago.

Real disposable income collapsing. Credit card balances up 20%. 401k hardship withdrawal % of workers at record.

Sure, I derive an opinion off this…but I’m not sure what world people think DVC resale prices hold up with these data points.

 

[Cfabar1]

DVC won’t go to zero… Disney is a “once in a lifetime” visit…. However, I think the “investors” who are holding DVC prices up, will Walk away and prices will go down… The reset is happening, and some of the resorts will only continue to go down, but some will hold some value.

 

[AstroBlasters]

Literally seeing the worst data on major indicators: yield curve severely inverted (worst in over 40 years). Warehouse rates for goods skyrocketing—inventory is so piled up and retailers can’t get rid of it that we don’t even have the space to store it. The opposite of the ports issue 12 months ago.

Real disposable income collapsing. Credit card balances up 20%. 401k hardship withdrawal % of workers at record.

Sure, I derive an opinion off this…but I’m not sure what world people think DVC resale prices hold up with these data points.

“ The economy is akin to Wile E Coyote walking off the side of the cliff not realizing there’s no solid foundation below until he looks down.”

1) Of course a severe economic environment would impact prices of everything, but your statement above is 100% opinion and editorialization, regardless of DVC pricing.

2) The vast majority of DVC cost are dues, not the upfront buy in.

3) Short term fluctuation of prices doesn’t impact buy and use members.

4) I would argue that buying DVC makes going on vacation more likely during an economic downturn because airline tickets are cheap and your accommodations are mostly paid for. Also, less renters means more availability at hard to book resorts.

 

[Stank]

DVC won’t go to zero… Disney is a “once in a lifetime” visit…. However, I think the “investors” who are holding DVC prices up, will Walk away and prices will go down… The reset is happening, and some of the resorts will only continue to go down, but some will hold some value.

Exactly. I don’t know what the estimates are, but certainly there are many contracts held by people trying to make a dues:rental spread who have more of an attachment with numbers than DVC. Now that we have interest rates above zero, the gap between money market yields and rental income is quickly narrowing—without the risk (or upside) of holding a $50k contract that could be worth $30k just as easily as it could be worth $80k.

 

[Stank]

“ The economy is akin to Wile E Coyote walking off the side of the cliff not realizing there’s no solid foundation below until he looks down.”

1) Of course a severe economic environment would impact prices of everything, but your statement above is 100% opinion and editorialization, regardless of DVC pricing.

2) The vast majority of DVC cost are dues, not the upfront buy in.

3) Short term fluctuation of prices doesn’t impact buy and use members.

4) I would argue that buying DVC makes going on vacation more likely during an economic downturn because airline tickets are cheap and your accommodations are mostly paid for. Also, less renters means more availability at hard to book resorts.

1) It’s a message board; almost everything everyone types is opinion. What facts are presented are usually followed by opinionated commentary, which is exactly what I did above.

2) Ah, but what matters is the EFFECTIVE cost. What’s the average DVC ownership—10-12 years? What’s the average cost of a resale contract—$150pp? What are the average dues, $8-9? So the effective cost of DVC ownership for the average buyer is majority going to be the contract price. And all of this is rather meaningless in a recession. I’m not sure telling someone, “Hey, I know things are bad now, but remember, the cost of this contract may be steep now, but if you hold it for a generation, the dues catch up. So really this $50,000 today isn’t that big of a deal when looking at 2050 and you’ve spent an additional $90,000 in cumulative dues…”

3) The entire point is speculating on what direction the price of DVC contracts goes. If I can wait a year for a 20% or more discount, I just might. If a contract drops $20-30pp, it’s rather headscratching when people loathe high dues resorts when we’re talking about a few bucks, yet paradoxically comfortable with paying an effective $30-40 due because you had to buy a contract today vs. wait a year.

4) Travel declines during economic downturns, and that’s precisely why you see discounts on rental cars/airfare/lodging/etc. The positive about DVC is the theory of “locking in today’s rate” with the fear Disney will charge $3000/night at a standard Deluxe studio in 20 years (not going to happen). The same works in reverse: buying DVC today locks you in at current levels when hotel discounts arrive in the downturn, which will also feed on lowering DVC prices.

All I’m saying is DVC is going to be on sale for many reasons as the year goes on. Some people don’t care if they overpay by thousands/tens of thousands because they have to buy and go/use this year. If I think I can save 20% or more by waiting 6 months for a big purchase like this, I think I would. Just because cumulative dues overtake my contract buy in in 20 years doesn’t really mean I’m anxious to overpay today when I can wait a couple quarters.