WOW DVC Prices !!!

[DonMacGregor]

This recession we’re in right now (no, not the one people think May or may not be coming, but the one that we are in right now) is going to mutate into a depression.

The more often you say that, the better it makes me feel. If this is the recession, I'm good.

 

[Nabas]

If Disney just ROFR'ed two BLT contracts at $120, you'd be silly to offer $120 for a contract. So there's the new floor.

Two does not make a pattern. It could be the floor is $130 or $140.

Conversely, if every future BLT contract starts being sent to ROFR in the $120s, then Disney is not going to ROFR them all.

The issue right now though is BLT had been selling in the $160s on average the month before. So 2 contracts coming in at $120 really stand out.

 

[Stank]

Someone has posted thst DVD has recently ROFRd two BLT contracts around the $120 mark..from reviewing the OCC site.

So, they may be the thorn that prevents that from happening. We shall see

You’re kidding, right? Disney ROFR’d BLT at $184 9 months ago. Apparently that didn’t stop it from plunging $64 in less than a year.

And many people don’t even think we’re in a recession yet. Wait until it’s blatantly obvious and then we can hear them say, “Oh, well, yeah we all saw that coming.”

Just as I have a funny feeling if I suggested BLT at $120 back in May 2022, I’d get push back “PFFFT, they just ROFR’d at $184!”

 

[Nabas]

You’re kidding, right? Disney ROFR’d BLT at $184 9 months ago. Apparently that didn’t stop it from plunging $64 in less than a year.

And many people don’t even think we’re in a recession yet. Wait until it’s blatantly obvious and then we can hear them say, “Oh, well, yeah we all saw that coming.”

Just as I have a funny feeling if I suggested BLT at $120 back in May 2022, I’d get push back “PFFFT, they just ROFR’d at $184!”

Looking at data from some of the DVC resellers, it's obvious that there has been a real run-up in prices. Some sort of correction is in order.

From DVC Resale Market:



From Fidelity:

 

[Stank]

Two does not make a pattern. It could be the floor is $130 or $140.

Conversely, if every future BLT contract starts being sent to ROFR in the $120s, then Disney is not going to ROFR them all.

The issue right now though is BLT had been selling in the $160s on average the month before. So 2 contracts coming in at $120 really stand out.

My argument has been of a sporadic ROFR. No rhyme nor reason, just bluffing. Direct sales are flagging. ROFR is on a tight leash. Every major corporation is hoarding cash/slashing discretionary budgets.

I also suggested ROFR is only relevant if there’s a bid. No offer, no ROFR. Just as houses sit and sit and sit with zero bids and list prices fall from $400k, to $380k, to $350k, etc., the same can occur for DVC. People can’t fathom that, yet we all just lived through -$40/barrel oil less than 3 years ago. Literally you had to pay someone $40,000 to take your delivered contract.

So after what I’ve seen, what we’ve all seen, over the past few years, I find it laughable that people honestly believe a freakin’ timeshare contract going from $28k to $20k (BLT 200 pt from $140 prevailing to $100) is outrageously impossible.

 

[Sandisw]

You’re kidding, right? Disney ROFR’d BLT at $184 9 months ago. Apparently that didn’t stop it from plunging $64 in less than a year.

And many people don’t even think we’re in a recession yet. Wait until it’s blatantly obvious and then we can hear them say, “Oh, well, yeah we all saw that coming.”

Just as I have a funny feeling if I suggested BLT at $120 back in May 2022, I’d get push back “PFFFT, they just ROFR’d at $184!”

You seem to have missed my point. If DVD stepped in in the last month to take contracts in the $120s, that is going to impact it going lower than that if they decide to take contracts at those prices.

We have not had many reports here of ROFR so was pointing out it is still happening for some resorts, even if we don’t have that here.

And, it’s not that anyone isn’t expecting resorts to sell lower…it’s just that when you start seeing near park resorts like BLT Being listed lower, buyers who are in the market will jump on them fast enough that it will slow the decline

BLT listed in the $120s to 130s today is not going to last long…which means it will be hard to get to an average price of $100….

 

[tom1944]

Someone has posted thst DVD has recently ROFRd two BLT contracts around the $120 mark..from reviewing the OCC site.

So, they may be the thorn that prevents that from happening. We shall see

I went into the site earlier today and all the BLT sales I checked were in the $140-150 range.

I checked deeds entered from February 1st.

 

[Stank]

The more often you say that, the better it makes me feel. If this is the recession, I'm good.

Negative real wage growth despite the insistence of a “strong labor market.” Doesn’t sound very strong if your performance raise is negative. The COLA isn’t even keeping pace with prices, let alone the fact you’re getting nothing for the obligatory performance/experience portion.

Credit card usage exploding. Auto default rate the highest since May 2009. Careful what you wish for, this show is just getting started. Last time we had defaults this high people even the Pollyanna’s admitted things were bad. So it just goes to show you the mismatch between psychology and reality, which means we have a lot further to go.

To be honest, the more often I come across the, “I don’t know what you’re talking about, I’m fine..” which is quite often, the more concerned I get. Because given the explosion in high interest debt and high defaults already, we’re floating in a suspended reality. Once those credit spigots close, oh my, look out below.

 

[Sandisw]

I went into the site earlier today and all the BLT sales I checked were in the $140-150 range.

I checked deeds entered from February 1st.

Thanks! That to me seems in line with where we would expect it to be but certainly, with willing sellers, can see it could go to the $120 to $130 range

 

[tom1944]

Thanks! That to me seems in line with where we would expect it to be but certainly, with willing sellers, can see it could go to the $120 to $130 range

I have no doubt there are sales currently in the $130s but most sellers are still holding firm above that.

 

[Stank]

BLT listed in the $120s to 130s today is not going to last long…which means it will be hard to get to an average price of $100….

That may be the case February 2023, and likely March 2023…but where is it August 2023?

Just as $140 would’ve been snatched up in a heartbeat a few months ago, they’re sitting…and sitting…and sitting.

There is absolutely nothing to drive DVC prices higher on the horizon. I’ll bet no one here is even aware the auto default rate is the second highest on record, only behind May 2009. That to me is startling—that so many people are not paying their car loans and it doesn’t even make a sound. That tells me we’re in for serious economic problems—because the only way to mask that is credit is still flowing. In which case my $100 BLT offer is generous as we could enter territory unthinkable.

Anytime I hear about DVC’s inevitability of being a great asset, I have to pinch myself: it’s a timeshare. It’s the best of the bunch, no doubt…but people have more faith in DVC prices than they do the S&P. That’s a lot of built-in muscle memory from past performance inducing future perceptions.

 

[Sandisw]

That may be the case February 2023, and likely March 2023…but where is it August 2023?

Just as $140 would’ve been snatched up in a heartbeat a few months ago, they’re sitting…and sitting…and sitting.

There is absolutely nothing to drive DVC prices higher on the horizon. I’ll bet no one here is even aware the auto default rate is the second highest on record, only behind May 2009. That to me is startling—that so many people are not paying their car loans and it doesn’t even make a sound. That tells me we’re in for serious economic problems—because the only way to mask that is credit is still flowing. In which case my $100 BLT offer is generous as we could enter territory unthinkable.

Anytime I hear about DVC’s inevitability of being a great asset, I have to pinch myself: it’s a timeshare. It’s the best of the bunch, no doubt…but people have more faith in DVC prices than they do the S&P. That’s a lot of built-in muscle memory from past performance inducing future perceptions.

I am not seeing BLT sitting unsold for the $140s right now…at least at the sites I frequent…most are listed above that.

Who knows what the future hold but I just don’t see it going that low. I have al2ays advised peoole to not use resale value as part of the equation since way too many things can impact it and DVD is one of the ,

I do agree that ROFR can’t happen without a buyer, but neither can a sale…but when DVD did what it did in the last year with ROFR at several of the resorts. Including BLT, it set the value of those contracts up way higher than they ever should have been And I think we are seeing prices coming down to where they would have been had ROFR not been as heavy as it was at certain resorts.

IMO, those BLT contracts selling in the $170s to $180s were way overpriced and only going that high because DVD was taking them in the range of what they were worth.

 

[DonMacGregor]

Never mind. Sisyphus can carry on without me.

 

[Nabas]

I just read this on Yahoo Finance:

U.S. homeowners have lost $2.3 trillion since June, according to a new report from the real-estate brokerage Redfin. The total value of U.S. homes was $45.3 trillion at the end of 2022, down 4.9% from a record high of $47.7 trillion in June. That figure signifies the largest June-to-December percentage decline since 2008.​

Of course, a couple of years after this 2008 real-estate decline is when we saw DVC prices hit record lows. Are we going to see the same in 2023 and 2024?

 

[Sandisw]

This thread is not the place to discuss everything there is about peoples finances, choices, and the economy

So, let’s please stay on topic and not continue discussing those things

I don’t want to close the thread but will need to if it continues to sound like an economics lesson.

Thanks all

 

[DonMacGregor]

I just read this on Yahoo Finance:

U.S. homeowners have lost $2.3 trillion since June, according to a new report from the real-estate brokerage Redfin. The total value of U.S. homes was $45.3 trillion at the end of 2022, down 4.9% from a record high of $47.7 trillion in June. That figure signifies the largest June-to-December percentage decline since 2008.​

Of course, a couple of years after this 2008 real-estate decline is when we saw DVC prices hit record lows. Are we going to see the same in 2023 and 2024?

I think it's apples and oranges. The 2008 crash was the result of the toxic mortgage market run amok. Lenders like Countrywide lending $300-$400K to unskilled labor making $17 an hour, using piggy-back loans to eliminate down payments (and PMI), and saddling them with variable interest rates.

The real estate decline over the past year is certainly tied to the economic downturn and the raise in interest rates (if money is more expensive to borrow, the demand drops, supply grows, and prices fall). However, some of the drop is also related to a housing market that was outpacing any other market indicator by a significant margin. For example, my house has "lost" +/- 9% since I re-fi'd in November of 2021, but that November 2021 peak was a 21.6% increase over November 2020, so there was a serious bubble waiting to be popped there.

 

[DonMacGregor]

This thread is not the place to discuss everything there is about peoples finances, choices, and the economy

So, let’s please stay on topic and not continue discussing those things

I don’t want to close the thread but will need to if it continues to sound like an economics lesson.

Thanks all

That's cool with me. I'm just tired of seeing the same stuff being spouted on nearly every thread. It's getting ridiculous.

 

[Nabas]

I think it's apples and oranges. The 2008 crash was the result of the toxic mortgage market run amok. Lenders like Countrywide lending $300-$400K to unskilled labor making $17 an hour, using piggy-back loans to eliminate down payments (and PMI), and saddling them with variable interest rates.

The real estate decline over the past year is certainly tied to the economic downturn and the raise in interest rates (if money is more expensive to borrow, the demand drops, supply grows, and prices fall). However, some of the drop is also related to a housing market that was outpacing any other market indicator by a significant margin. For example, my house has "lost" +/- 9% since I re-fi'd in November of 2021, but that November 2021 peak was a 21.6% increase over November 2020, so there was a serious bubble waiting to be popped there.

As I noted in a previous post, we have seen a dramatic run-up in DVC resale prices, hence the need for a correction.

Most DVC resale prices are roughly double where they were 10 years ago, even though these contracts have 10 fewer years remaining. For example, a 2042 OKW contract could be found in the $50s per point range in 2012. That's a pretty big run-up.

 

[Nabas]

Many years ago, I saved data showing the average price passing ROFR in May 2012:

AKV: $65pp
BCV: $73pp
BLT: $89pp
BWV: $57pp
HHI: $46pp
OKW (2042): $54pp

Since these are averages, it means that there were contracts selling for less than this that passed ROFR.

I think that the price bottom was a couple of years before this, but Disney might have been more actively ROFRing, so I'm not sure if prices that passed ROFR were higher or lower in 2010 and 2011.

 

[CarolMN]

I never expected that when my wife and I decided to buy DVC and join this forum, I'd get lectured every day about Keynesian economics... lots of Nostradamuses here it seems.

Never mind. Sisyphus can carry on without me.

Good time for a PSA:

Everyone has the option to use the Board's "IGNORE" feature. This feature removes posts made by a particular poster from your view. To activate it, click on the screen name of the poster you wish to ignore & click the "IGNORE" button.

Sometimes I wish Mods could use it.