Where do you think DVC resale prices are headed?

[PaulW08]

OKW $80 -> SSR $95 -> AKV $xxx.xx

Right now we are talking about a $20/point premium for AKV for another $10-$15 you can get in to MK resorts or you actually can save money upfront by getting BWV with a shorter length of time.

I think this is pretty spot on for my own personal evaluation. I was originally shopping for a SSR at $95 as my high end, and settled on an AKV $100. Seller split MF dues in 2020 so that helped as well. I think the $5 premium is justified for the extra years and uniqueness of the resort.

 

[CastAStone]

I would call the current AKV pricing "unsustainable". At least relative to the other resorts.

One thing I've learned this summer is that the brokers at DVC Resale Market have a lot of pricing power when they dedicate themselves to a cause and can move the market singlehandedly when the conditions allow for it. That's what happened here IMO - supply got tight and DVCRM decided that the sellers should take pricing and flexed to make it so.

With supply loosening, prices will settle. Eventually.

 

[Prince John Robin Hood]

With supply loosening, prices will settle. Eventually.

This is what I'm betting on. If I'm wrong and prices go higher we can always buy elsewhere. Lot's of great DVC resorts to choose from.

 

[Starport Seven-Five]

OKW $80 -> SSR $95 -> AKV $xxx.xx

Right now we are talking about a $20/point premium for AKV for another $10-$15 you can get in to MK resorts or you actually can save money upfront by getting BWV with a shorter length of time.

I wonder how many buyers look at this kind of math vs just decide a resort they like and buy in. All of the resorts are cheaper per night buying DVC than on the hotel side so if someone has a narrow focus, it still could make sense to pay $130 point for AKV.

The one that always baffles me is the time to expiration though. There are a few resorts that have multiple expiration dates available (OKW, BRV vs CCV) and in every case, the cost for a longer contract isn't much relative to the extra years you get.

 

[Dean]

I wonder how many buyers look at this kind of math vs just decide a resort they like and buy in. All of the resorts are cheaper per night buying DVC than on the hotel side so if someone has a narrow focus, it still could make sense to pay $130 point for AKV.

The one that always baffles me is the time to expiration though. There are a few resorts that have multiple expiration dates available (OKW, BRV vs CCV) and in every case, the cost for a longer contract isn't much relative to the extra years you get.

The value on the back side for a years points is much less than a year's points that are more current. When OKW was extended the cost was $15 ($25 with discount) but the resale value was around $8 per point.

 

[CastAStone]

I wonder how many buyers look at this kind of math vs just decide a resort they like and buy in. All of the resorts are cheaper per night buying DVC than on the hotel side so if someone has a narrow focus, it still could make sense to pay $130 point for AKV.

The one that always baffles me is the time to expiration though. There are a few resorts that have multiple expiration dates available (OKW, BRV vs CCV) and in every case, the cost for a longer contract isn't much relative to the extra years you get.

I would say that CCV is significantly more expensive relative to the years left than BRV.

Each year after the current one is worth 6.5% less than the year before it to me because that’s what I could make on average over time (after inflation) by investing the money instead.

CCV has 47 years left so I use the geometric progression formula: (1-((1-0.065)^47))/.065=14.7, meaning I should value CCV at 14.7 times what I value 1 years stay at.

BRV has 21 years left, so (1-((1-0.065)^21))/.065=11.6, meaning I should value BRV at 11.6 times what I value 1 year at. 14.7/11.6=1.27; so if you otherwise value BRV and CCV equally, with BRV at $105 (per DVCRM blog), CCV would be worth $133. Instead it’s averaging $145.

In other words, if nothing changes, you should be able to buy Boulder Ridge now, put the money you save versus Copper Creek into an S&P 500 tracking fund, and buy Copper Creek in 2041 with those savings AND have $6200 left over.

Obviously there’s one million variables that will change the math between now and 2041, but as it sits in front of us today, that’s the landscape. BRV is prices below CCV.

 

[sethschroeder]

I wonder how many buyers look at this kind of math vs just decide a resort they like and buy in

I would say for resale its a little more often and if they are buying AKV its more often than something like BLT, VGF, VGC.

AKV is viewed as a cheaper alternative so I would suspect at least some napkin math. SSR and OKW get a really bad wrap though by some so AKV might be the lowest "acceptable" resort.

 

[wreing]

The one that always baffles me is the time to expiration though. There are a few resorts that have multiple expiration dates available (OKW, BRV vs CCV) and in every case, the cost for a longer contract isn't much relative to the extra years you get.

The thing is that you put so much money in at the beginning the additional value at the end is very small. I have a google sheet I'll try and share here, that you can copy and use to play with a Discounted Cash Flow Calculation.

The last 10 years are responsible for about $6 worth of DCF value, compared to the first 10 which are worth almost $70.

 

[sethschroeder]

In other words, if nothing changes, you should be able to buy Boulder Ridge now, put the money you save versus Copper Creek into an S&P 500 tracking fund, and buy Copper Creek in 2041 with those savings AND have $6200 left over.

Obviously there’s one million variables that will change the math between now and 2041, but as it sits in front of us today, that’s the landscape. BRV is prices below CCV.

This is the part that originally was in your mindset that I changed before I bought RIV. I was thinking originally I had BWV, I would use it for 20 years and then buy-in to a new resort. I flipped on that mindset liking the opportunity to just lock in now for a lifetime as opposed to worry about how much Disney might gouge in 2042.

What I would be interested in is seeing what it looks like if you took opening day prices with a requirement for 1 week in October in a Studio and 2BR in 2020 dollars. I took a stab at it but might be wrong. This also doesn't account for incentives that can be from 10-20% discount for a contract of these sizes.

Studio

Resort	Opening Day Price	Point Requirement	Total Cost (Then)	2020 Price	Total Cost (Now)
OKW - 1991	$51	85	$4335	$98.48	$8370.80
BWV - 1996	$62.75	90	$5647.50	$105.63	$9506.70
BLT - 2008	$112	116	$12992	$137.91	$15997.56
VGF - 2013	$145	132	$19140	$163.66	$21603.12
RIV - 2020	$188	123	$23124	$190.81	$23469.63

2BR

Resort	Opening Day Price	Point Requirement	Total Cost (Then)	2020 Price	Total Cost (Now)
OKW - 1991	$51	253	$12903	$98.48	$24915.44
BWV - 1996	$62.75	299	$18762.25	$105.63	$31583.37
BLT - 2008	$112	338	$37856	$137.91	$46613.58
VGF - 2013	$160	394	$63040	$163.66	$64482.04
RIV - 2020	$188	345	$64860	$190.81	$65829.45

 

[CarolynFH]

This is the part that originally was in your mindset that I changed before I bought RIV. I was thinking originally I had BWV, I would use it for 20 years and then buy-in to a new resort. I flipped on that mindset liking the opportunity to just lock in now for a lifetime as opposed to worry about how much Disney might gouge in 2042.

What I would be interested in is seeing what it looks like if you took opening day prices with a requirement for 1 week in October in a Studio and 2BR in 2020 dollars. I took a stab at it but might be wrong. This also doesn't account for incentives that can be from 10-20% discount for a contract of these sizes.

Studio

Resort	Opening Day Price	Point Requirement	Total Cost (Then)	2020 Price	Total Cost (Now)
OKW - 1991	$51	85	$4335	$98.48	$8370.80
BWV - 1996	$62.75	90	$5647.50	$105.63	$9506.70
BLT - 2008	$112	116	$12992	$137.91	$15997.56
VGF - 2013	$145	132	$19140	$163.66	$21603.12
RIV - 2020	$188	123	$23124	$190.81	$23469.63

2BR

Resort	Opening Day Price	Point Requirement	Total Cost (Then)	2020 Price	Total Cost (Now)
OKW - 1991	$51	253	$12903	$98.48	$24915.44
BWV - 1996	$62.75	299	$18762.25	$105.63	$31583.37
BLT - 2008	$112	338	$37856	$137.91	$46613.58
VGF - 2013	$160	394	$63040	$163.66	$64482.04
RIV - 2020	$188	345	$64860	$190.81	$65829.45

Thanks for this chart - it shows me that what we paid for our BWV points in 1997 is roughly what the resale cost for them is today, so resale price today roughly follows inflation. Of course today's direct price is way higher than inflation.

 

[CastAStone]

This is the part that originally was in your mindset that I changed before I bought RIV. I was thinking originally I had BWV, I would use it for 20 years and then buy-in to a new resort. I flipped on that mindset liking the opportunity to just lock in now for a lifetime as opposed to worry about how much Disney might gouge in 2042.

What I would be interested in is seeing what it looks like if you took opening day prices with a requirement for 1 week in October in a Studio and 2BR in 2020 dollars. I took a stab at it but might be wrong. This also doesn't account for incentives that can be from 10-20% discount for a contract of these sizes.

Studio

Resort	Opening Day Price	Point Requirement	Total Cost (Then)	2020 Price	Total Cost (Now)
OKW - 1991	$51	85	$4335	$98.48	$8370.80
BWV - 1996	$62.75	90	$5647.50	$105.63	$9506.70
BLT - 2008	$112	116	$12992	$137.91	$15997.56
VGF - 2013	$145	132	$19140	$163.66	$21603.12
RIV - 2020	$188	123	$23124	$190.81	$23469.63

2BR

Resort	Opening Day Price	Point Requirement	Total Cost (Then)	2020 Price	Total Cost (Now)
OKW - 1991	$51	253	$12903	$98.48	$24915.44
BWV - 1996	$62.75	299	$18762.25	$105.63	$31583.37
BLT - 2008	$112	338	$37856	$137.91	$46613.58
VGF - 2013	$160	394	$63040	$163.66	$64482.04
RIV - 2020	$188	345	$64860	$190.81	$65829.45

You meet my two part test for buying Riviera because you love the resort, or at least love the access to Epcot, and you seem quite certain you will own for more than 20 years.

I have trouble seeing how pricing could continue at the pace we saw previously, in fact, it's already slowed considerable in the past few years:


But all that said it is extremely hard to crystal ball what's ahead, but to me that just makes me more certain that I shouldn't be looking more than 10ish years down the road when making this purchase.

 

[sethschroeder]

But all that said it is extremely hard to crystal ball what's ahead, but to me that just makes me more certain that I shouldn't be looking more than 10ish years down the road when making this purchase.

Yup I think that comes out to how risk adverse someone might be. I would also say though its very unlikely I would take the money I would have paid for RIV and just invested it, it would have went to some other life benefit like a house addition or something so I wouldn't have that extra money left over.

About the chart seems its peaks and valleys on the 5 year averages. Possibly Disneyland Villas gets us another peak on the year to year and even has an increase as it gets closer to selling out (if it sells as quickly as they say it will).

 

[MICKIMINI]

In other words, if nothing changes, you should be able to buy Boulder Ridge now, put the money you save versus Copper Creek into an S&P 500 tracking fund, and buy Copper Creek in 2041 with those savings AND have $6200 left over.

I love it! I'll be 80+ at that time so I spent my "savings" from the two BRV's I bought this summer by buying two OKW contracts today LOL! You can't take it with you!

 

[Starport Seven-Five]

I would say that CCV is significantly more expensive relative to the years left than BRV.

Each year after the current one is worth 6.5% less than the year before it to me because that’s what I could make on average over time (after inflation) by investing the money instead.

CCV has 47 years left so I use the geometric progression formula: (1-((1-0.065)^47))/.065=14.7, meaning I should value CCV at 14.7 times what I value 1 years stay at.

BRV has 21 years left, so (1-((1-0.065)^21))/.065=11.6, meaning I should value BRV at 11.6 times what I value 1 year at. 14.7/11.6=1.27; so if you otherwise value BRV and CCV equally, with BRV at $105 (per DVCRM blog), CCV would be worth $133. Instead it’s averaging $145.

In other words, if nothing changes, you should be able to buy Boulder Ridge now, put the money you save versus Copper Creek into an S&P 500 tracking fund, and buy Copper Creek in 2041 with those savings AND have $6200 left over.

Obviously there’s one million variables that will change the math between now and 2041, but as it sits in front of us today, that’s the landscape. BRV is prices below CCV.

Thanks for this. I had never considered it this way for some reason and it makes complete sense. I need to work on my spreadsheet some to adjust my perception a bit and not judge the 2042 resorts as harshly.

Agree on the last point as well that we have to make a lot of assumptions (both on returns and future resale values) but it's a good way to put context on the price differences in the different contract lengths.

 

[sethschroeder]

Thanks for this. I had never considered it this way for some reason and it makes complete sense. I need to work on my spreadsheet some to adjust my perception a bit and not judge the 2042 resorts as harshly.

Agree on the last point as well that we have to make a lot of assumptions (both on returns and future resale values) but it's a good way to put context on the price differences in the different contract lengths.

One thing the graph didn't account for that I tried to in my fairly brief data is the cost of the point chart as well. It's not only the price per point but also the point chart that goes up over time so buyins are more and cheaper rooms will be harder to get at 7 months.

 

[Eldon32]

It's not only the price per point but also the point chart that goes up over time

What do you mean? Points can not be created or destroyed; and the total points needed for 100% occupancy in resort can't change - only be moved around. (Although, there are some shady rules around how they can move them between rooms/seasons that is up for interpretation).

 

[Ruttangel]

What do you mean? Points can not be created or destroyed; and the total points needed for 100% occupancy in resort can't change - only be moved around. (Although, there are some shady rules around how they can move them between rooms/seasons that is up for interpretation).

Not sure if he meant for new resorts?

 

[Shelle88]

What do you mean? Points can not be created or destroyed; and the total points needed for 100% occupancy in resort can't change - only be moved around. (Although, there are some shady rules around how they can move them between rooms/seasons that is up for interpretation).

Yes, total points in existing resorts must stay the same but, for new resorts, not only is the price per point more expensive but also the number of points needed is greater than the older resorts for the same room type.

100 points may buy you 9 nights in an OKW studio(96) but how many nights will 100 points get you at Riviera? The same 9 nights are 103 points in a tower studio but there's so few of these you'd be lucky to get one. A regular studio is 139 points so this needs including in your long term calculation too, as after 2042 you won't be able to stay at the lower point resorts. However, I'm not great at stats and I have no idea how to do that!!

 

[CastAStone]

I miss your updates @bookwormde hope everything is OK with you.

 

[sethschroeder]

What do you mean? Points can not be created or destroyed; and the total points needed for 100% occupancy in resort can't change - only be moved around. (Although, there are some shady rules around how they can move them between rooms/seasons that is up for interpretation).

When looking at buying X today or Y in 20 years. When you compare buying BWV today and then rebuying BWV in 2042 its not just price but also point charts that will be higher. If you try to do predictive math you need to account for this increase.

Not sure if he meant for new resorts?

Correct the line of reasoning we were exploring was buy a 2042 resort now and then rebuy it in 2042 as well in comparison to buying CCV/RIV.

Yes, total points in existing resorts must stay the same but, for new resorts, not only is the price per point more expensive but also the number of points needed is greater than the older resorts for the same room type.

100 points may buy you 9 nights in an OKW studio(96) but how many nights will 100 points get you at Riviera? The same 9 nights are 103 points in a tower studio but there's so few of these you'd be lucky to get one. A regular studio is 139 points so this needs including in your long term calculation too, as after 2042 you won't be able to stay at the lower point resorts. However, I'm not great at stats and I have no idea how to do that!!

Correct

I also did a little chart already showing it basically goes up over time. VGF is a little off the standard increase for points requirement but that is expected since VGF is the "flagship" so it will be slightly higher than all other resorts. You can somewhat track is though from OKW -> BWV -> BLT -> RIV on the increases both in price and in point requirements.