Historical Value Drops - Resale

[Nabas]

I recorded numbers in April 2012. Here's what I have for the average asking prices:

• OKW - $60/point
• SSR - $62/point
• VWL - $63.50/point
• BWV - $63.50/point
• AKV - $65/point
• BCV - $73/point
• BLT - $90/point

 

[Nabas]

1. It is now only 20 years away from the expiration of the several 2042 resorts. I'd be happy to wager against anyone who wanted to bet that those resorts would be worth more in 2036 than they are today.

The good news is that I'll be very old in 20 years.

But I guess than makes me old now!

 

[crisi]

The good news is that I'll be very old in 20 years.

But I guess than makes me old now!

Yeah, for those of us that are old, buying a BWV resale now and worrying about resale value probably isn't a big deal....don't buy if you don't intend to hold until the end of the contract, and don't plan on passing it to your kids - it will be pretty much worthless.

But if someone is in their late 20s and looking at buying an original expiration resort now, and planning on being able to resell in ten or fifteen years for what they bought it for...... that starts not making a lot of sense.

 

[dvc lover 1970]

i bought BWV at $53 and $55 a point in 2012. It was in the high $70s when I bought BLT in 2009.

At the time, SSR was going in the mid 50s.

Great buy!

 

[RanDIZ]

I recorded numbers in April 2012. Here's what I have for the average asking prices:

• OKW - $60/point
• SSR - $62/point
• VWL - $63.50/point
• BWV - $63.50/point
• AKV - $65/point
• BCV - $73/point
• BLT - $90/point

Using the info you provided and DVC Resale Market’s Mar 21 avg resale price, it’s a big jump in 9yrs. Basically doubled the price. If prices barely dropped during a time when parks and resorts were closed, people were unemployed and the uncertainty of the economy, I don’t think there would ever be big drops in resale prices. The driving factor for decreased value really lies with time left on contracts. So I’d say in less than 10yrs, all the 2042 resorts will begin to fall off a cliff.

Mar 2021 avg

• OKW - $110/point
• SSR - $118/point
• VWL - $121/point
• BWV - $133/point
• AKV - $122/point
• BCV - $151/point
• BLT - $160/point

 

[mrsclark]

Let's take 2042 out of the responses (or just assume the OP is buying a resale with 30+ years left on it). I think what they were asking is within the next 10 years or so if we have a major recession how much will prices drop. I would think at at most you would get a 30% drop but much like in 2008 it would be a very short term drop. Much like the overall market DVC experienced a V shaped recovery and only people who sold at the very bottom took a big hit. I would say over a 10 year period the odds of any resort being at least flat in value to today (not factoring in time value of money etc) is 75%+. We can look at the history on these boards and people have predicted doom and gloom on resale prices for years and yet the resale prices just keep on climbing.

First, I want to thank everyone to take the time to respond. I know I didn't answer right away - I have two very young children - an infant and a toddler - so it is very hit and miss when I will have the time (or energy!) to post to the Disboards.

Yes, I know that if I buy at a 2042 resort and hold the contract until that time it will be worth $0. However, I was looking at a time horizon of 5-15 years what the potential downside could be should I decide to sell. Again, I understand that worst case I should plan for the contract to have $0 in value (and on top of that have to continue to pay dues until I could offload it), but I was more wondering a historic prospective what the swings have been. I don't know of any site that has historic data going back to the inception of DVC with graphs of resale prices, but if that site does exist somewhere please let me know!

 

[mrsclark]

I am actually helping my dad research and purchase a DVC resale contract right now. We are looking at SSR, BWV, BLT, and AKV - I know that is an odd assortment of ones to narrow it down to, but those are the final options. So it looks like the only one we are considering with 30 years left is BWV.

If I am looking at the right information it looks like
AKV - 2057
BLT - 2060
BWV - 2042
SSR - 2054

 

[CastAStone]

First, I want to thank everyone to take the time to respond. I know I didn't answer right away - I have two very young children - an infant and a toddler - so it is very hit and miss when I will have the time (or energy!) to post to the Disboards.

Yes, I know that if I buy at a 2042 resort and hold the contract until that time it will be worth $0. However, I was looking at a time horizon of 5-15 years what the potential downside could be should I decide to sell. Again, I understand that worst case I should plan for the contract to have $0 in value (and on top of that have to continue to pay dues until I could offload it), but I was more wondering a historic prospective what the swings have been. I don't know of any site that has historic data going back to the inception of DVC with graphs of resale prices, but if that site does exist somewhere please let me know!

Realize that Disney suspended ROFR out of need for a few years around 2009 and again out of fear for several months in 2020. They’ll do it again if they have more contracts coming in via repossession than they can sell, and if that is the case, you can be sure prices are already falling as people try to dump their contracts before they go underwater.

 

[Matty B13]

The adage "Buy where you want to stay" is always the trump card, there is no reason so spend thousands of dollars to stay at a resort that your just "okay" with. Yes, you can try to trade in at the 7 month mark but that doesn't always work out, especially for studios. Also, DVC could suspend trading a the 7 month mark at any time and take it out of the trading agreement.

 

[DVCSunDevil]

There’s a lot more room for the prices to fall than there ever was because of the continual increase in value to a time-limited asset that should be decreasing.

It’s mathematically certain that your contract will depreciate, it’s a question of when, not if.

Exactly correct. I have stated this in previous threads. The resale prices are not a continually linear growth model, but more of a bell shaped curve. Since there is an expiration date, the resale value could grow up until a certain point but then it will start to decrease. For example, I paid $25K for my contract last year but I would definitely not be willing to pay that much in ten years when there is only 12 years left on the contract. Prices WILL go down.

As many on here have said repeatedly, DVC is not an investment. It's a prepaid vacation. That's how I approached it when I bought. I have zero plans to sell, so I am a happy camper with my contract! I would be really unhappy, however, if I bought DVC with the intention of making a profit via resale only to find that resale prices dipped to due to unforeseen circumstances (cough...new resale restrictions...cough).

 

[Raemama]

Another variable to consider for the OP’s initial and additional posts is whether or not Disney will build additional DVC properties. Right now resale prices are influenced by less supply. When Reflections (was that the name?) was still on the table, it looked like supply would be increased; we bought when the prices were lower during that anticipated increase in supply. That anticipated increase in supply disappeared and resale prices have increased accordingly. Supply will be down for the near future and I believe that will have a continued impact on resale prices. IF Disney does end up building more DVC resorts, let’s say completing one or more within five years from now, we could potentially see resale prices go down when construction commences and after that because supply will have an anticipation of being increased, and it will be increased once completed. The market and world and national economies are also big influencers (but they also influence whether Disney goes into building mode, too).

 

[DVCSunDevil]

Second, because DVD does a good job of keeping the resale prices up. Anything priced too low will be taken via ROFR.

DVD isn't trying to keep resale prices up. I think it's important to remember that DVC wants prospective buyers to buy direct, not via resale. We just saw DVC implement some resale restrictions in 2019 that aren't great. Why would anyone think there aren't going to be more resale restrictions on the horizon? There will be. DVC is a timeshare, not an investment. Anyone who buys into DVC with the plan of getting out 10-20 years down the road with a nice little profit may be really upset when that time comes. Buy into DVC with plan not to sell, then if the day comes when you do want to sell and you happen to make a profit it will be gravy.

 

[Sandisw]

DVD isn't trying to keep resale prices up. I think it's important to remember that DVC wants prospective buyers to buy direct, not via resale. We just saw DVC implement some resale restrictions in 2019 that aren't great. Why would anyone think there aren't going to be more resale restrictions on the horizon? There will be. DVC is a timeshare, not an investment. Anyone who buys into DVC with the plan of getting out 10-20 years down the road with a nice little profit may be really upset when that time comes. Buy into DVC with plan not to sell, then if the day comes when you do want to sell and you happen to make a profit it will be gravy.

Exactly! As they saying goes, “Plan for the worst, but hope for the best!”

 

[Marionnette]

DVD isn't trying to keep resale prices up. I think it's important to remember that DVC wants prospective buyers to buy direct, not via resale. We just saw DVC implement some resale restrictions in 2019 that aren't great. Why would anyone think there aren't going to be more resale restrictions on the horizon? There will be. DVC is a timeshare, not an investment. Anyone who buys into DVC with the plan of getting out 10-20 years down the road with a nice little profit may be really upset when that time comes. Buy into DVC with plan not to sell, then if the day comes when you do want to sell and you happen to make a profit it will be gravy.

While I agree with you that more resale restrictions will be implemented in the future, I disagree with the impression that DVD has no interest in keeping resale prices high. When the difference between resale and direct results in threads like this one...
https://www.disboards.com/threads/not-worth-purchasing-resale.3836303/page-2#post-62950859...you get potential resale buyers rethinking their purchase. No stick and plenty of carrot involved there and all DVC has to do is purchase low-priced resale contracts through ROFR and sell them as direct contracts for profit.

 

[Yinn]

The adage "Buy where you want to stay" is always the trump card, there is no reason so spend thousands of dollars to stay at a resort that your just "okay" with. Yes, you can try to trade in at the 7 month mark but that doesn't always work out, especially for studios. Also, DVC could suspend trading a the 7 month mark at any time and take it out of the trading agreement.

I think this largely depends on how specific you want your stays. I've got 3 contracts and 3 home resorts but when I looked back I only used my "home" points once. I find I largely end up renting my home points at 7+ months out and using whatever is left over after the 7 month mark.

I haven't had much problems booking trips under 7 months and that includes for myself and others. Granted, I'm ok with being on the DVC site every morning to check and not everyone is ok with that. I'm also known to see a different resort and go - Oooh! We haven't stayed there when something pops up.

 

[CastAStone]

DVD isn't trying to keep resale prices up. I think it's important to remember that DVC wants prospective buyers to buy direct, not via resale. We just saw DVC implement some resale restrictions in 2019 that aren't great. Why would anyone think there aren't going to be more resale restrictions on the horizon? There will be. DVC is a timeshare, not an investment. Anyone who buys into DVC with the plan of getting out 10-20 years down the road with a nice little profit may be really upset when that time comes. Buy into DVC with plan not to sell, then if the day comes when you do want to sell and you happen to make a profit it will be gravy.

Yes, buying DVC with a plan to sell is taking a significant risk. It could have a huge reward or it could be a *disaster*. The original poster however I think is planning to hold but is trying to evaluate downside risk potential.

 

[sndral]

While I agree with you that more resale restrictions will be implemented in the future, I disagree with the impression that DVD has no interest in keeping resale prices high. When the difference between resale and direct results in threads like this one...
https://www.disboards.com/threads/not-worth-purchasing-resale.3836303/page-2#post-62950859...you get potential resale buyers rethinking their purchase. No stick and plenty of carrot involved there and all DVC has to do is purchase low-priced resale contracts through ROFR and sell them as direct contracts for profit.

Except we have historical evidence of DVD not ROFRing during the last recession, which led to threads such as this one https://www.disboards.com/threads/6-month-rofr-analysis.3120984/#post-48786564 from the end of that recession. When their direct sales slowed and they had plenty of points accumulating because of all of the foreclosures & deeds in lieu of foreclosure they chose to essentially abandon ROFR for awhile.
IMO real estate, of which DVC is a very small subset, cannot forever go up, particularly if salaries remain essentially stagnant, couple that with historically low interest rates - many folks do finance their DVC purchase, and it wouldn’t surprise me to see resale prices falling again if the whole house of cards tumbled again like we saw back in 2009-2012ish. I can‘t guess or predict whether we’ll see a similar event in the future, I just know it could happen because it did happen not so long ago.

 

[E2ME2]

i bought BWV at $53 and $55 a point in 2012. It was in the high $70s when I bought BLT in 2009.

At the time, SSR was going in the mid 50s.

As the prices continue to rise in Direct & Resale, the % savings via resale diminishes.
Ex: I bought SSR Direct in 2011 for $99 & Resale was in the $50s at that time - so a net difference of $40-$50/per point, but as a percentage resale was about a 50% discount.
Now SSR lists Direct at $165 , so $40-$50 less via Resale would put it at $115-$125, but that's only a 25% discount.

 

[DL1WDW2]

I wouldn't count on any significant drops in the near future.

First, because it is a seller's market right now. The agencies are currently selling more contracts than they are getting new ones to list. That will drive prices up just from a simple supply vs demand perspective.

Second, because DVD does a good job of keeping the resale prices up. Anything priced too low will be taken via ROFR.

At some point, the 2042 resorts (even BCV) will fall in value UNLESS (and this was hinted at during Saturday's Kwafee Talk) DVC offers current owners of those resorts some kind of extention. That would be surprising given what happened with the OKW extensions offered years ago, but by waiting until closer to expiration DVD might get more 2042 owners to bite at the chance. If that happens, you're not going to see those resale prices drop.

I could see the possibility of this 2042 extension as just another sales tactic for DVC. They have many ... but why lose your guaranteed consumer ? DVC could find a reason to justify another attempt at the extension offer... just random hinting at it increases an interest in hanging in there.

 

[Yinn]

As the prices continue to rise in Direct & Resale, the % savings via resale diminishes.
Ex: I bought SSR Direct in 2011 for $99 & Resale was in the $50s at that time - so a net difference of $40-$50/per point, but as a percentage resale was about a 50% discount.
Now SSR lists Direct at $165 , so $40-$50 less via Resale would put it at $115-$125, but that's only a 25% discount.

While that may be true, as the prices for both rises..one could argue that pure percentages may not be the best method of calculation.

Example 1:
100 pts SSR Direct @ $99/pt = $9900.
100 pts SSR Resale @ $50/pt = $5000.
Total Savings, $4900 or 49.49%

Example 2:
100 pts SSR Direct @ $165/pt = $16,500
100 pts SSR Resale @ 115/pt = $11,500
Total Savings, $5,000 or 30.3%

You're saving less percentage wise, but you're still saving $5,000 either way. As the prices rise it will continue to trend this way.

Then if you factor that blue card benefits - IF - they diminish, does that narrow the gap of direct vs resale or does the new resorts offset that? But that's a completely different discussion.