Coronavirus and DVC prices

[ELMC]

This virus business will be a thing of the past before too long. DVC is here to stay. It is a 50-year contract, or close to when first purchased into.

I love your optimism, but unfortunately, I do not share it. Even if the virus is a thing of the past soon (which I'm not ready to concede), we were already on the brink of a recession. Signs point to the possibility of a deep and long term recession. If that happens DVC prices will drop significantly and stay there for a decent enough chunk of time to impact the 20-50 year lifespan of DVC contracts. Sorry to be such a Debbie Downer.

 

[DVC Doctor]

Warren Buffett once said that as an investor, it is wise to be “Fearful when others are greedy and greedy when others are fearful” and this 100% applied to DVC prices.

So, when you see DVC owners in fear, it may indicate prices are decreasing and a good time to buy resale.

 

[crisi]

This virus business will be a thing of the past before too long. DVC is here to stay. It is a 50-year contract, or close to when first purchased into.

Eighteen months before we have a widely distributable vaccine. Disney will not be the same place.

 

[DVC Fanatic]

On one of the resale sites (usually higher priced listings) today, in their daily email there are VGFs listed in high $150s and low $160s. Also PVB is listed in high 120s and low $130s. Prices are already dropping.

 

[Drewferin]

I think our current situation is alot different than other historic recessions. This has shut down almost 100% of Disney revenue and will create a massive cash burn to stay afloat. I believe this is why Disney took out 6.5B in notes to help offset other notes that are coming due and to also give them some money to burn through.

I sure hope this situation passes and does so quickly but I'm getting the feeling that our new normal wont be what we are used to in the past. The liability this will create for Disney moving forward could be massive and we all need to pray that a second wave of this doesnt breakout like the Spanish Flu did in 1918. I think people realize something is different this time and alot of people are panicking. This could contribute to the dropping DVC resale prices that we are already seeing. Stay safe guys and gals and stay at home!

 

[kmhowell]

On one of the resale sites (usually higher priced listings) today, in their daily email there are VGFs listed in high $150s and low $160s. Also PVB is listed in high 120s and low $130s. Prices are already dropping.

Yeah I just came across a site (not sure how reputable it is) that had sold 100 points at AKL for $8,100. Compared to the (little) research I've done, I thought that was a good price.

 

[Brian Noble]

This virus business will be a thing of the past before too long.

Cedar Fair announced that they do not plan to open any of their seasonal parks before mid-May. They did not give a specific date, and it could be later. For some of their parks, that's as much as eight weeks after scheduled--Carowinds was expected to open today.

 

[ScubaCat]

This virus business will be a thing of the past before too long. DVC is here to stay. It is a 50-year contract, or close to when first purchased into.

I love your optimism, but unfortunately, I do not share it. Even if the virus is a thing of the past soon (which I'm not ready to concede), we were already on the brink of a recession. Signs point to the possibility of a deep and long term recession. If that happens DVC prices will drop significantly and stay there for a decent enough chunk of time to impact the 20-50 year lifespan of DVC contracts. Sorry to be such a Debbie Downer.

I think coronavirus on its own won't necessarily be the catalyst, but it could expose underlying economic weakness. Time will tell.

 

[Deploraboo]

Risk assets move first. DVC owners aren’t stupid. No matter what DVC says, a fractional ownership interest in real estate is a security. And security prices fluctuate, both up and down, as we’ve all unfortunately seen. Unless Disney puts a floor under all contracts, which given obscene interruption in cash flow (Parks, cruise, cinema), is highly dubious in the short term, we could be looking a a major panic in this space very shortly.

They just put Onward straight on demand. That shd tell us all we need to know about their cash outlook.

 

[ColoradoDisneyFan]

I would not consider buying any timeshare, even DVC, at this moment. This economic downturn is not magically ending any time soon. Prices will drop.

 

[chainkid]

I am much more concerned about my desire to use DVC until they have a vaccine than having to sell for a financial issue. I'm high risk and the thought of being in crowds like you find at Disney literally makes me sweat bullets right now. It is a different world than when I bought . I am holding my breath hoping for a miracle to happen.

 

[MICKIMINI]

I'm thinking that stripped contracts might be where the value is. First of all, they are a bit cheaper and more negotiable and there is no outlay for MF's in the short term - sales price and closing costs and maybe even negotiated closing costs.

If we have to hit the pause button on visits for a year or two so be it. DH and I have been through 38 years of ups and down and we're not going to live under a rock forever.

 

[Deploraboo]

Live WH press conference saying 99% of fatalities in Europe from this were over 50 with three pre existing conditions. No specificity as to what those conditions might be but I’d suspect smoking, heart disease among them.

Given DVC owner demo unless /until there’s a vaccine there will be a Covid 19 haircut on this product right off the bat. Notwithstanding the current market calamity haircut.

 

[Lorana]

Live WH press conference saying 99% of fatalities in Europe from this were over 50 with three pre existing conditions. No specificity as to what those conditions might be but I’d suspect smoking, heart disease among them.

It's 99% with at least one pre-existing condition. The most common conditions were High Blood Pressure, Diabetes, and Ischemic Heart Disease. However, please note that this report is based only on analysis of 355 of then 2,003 reported deaths in Italy. [ Source: https://www.cebm.net/global-covid-19-case-fatality-rates/ ] The current death toll is 6,077.

Of those 2,003 deaths, 87.7% were of age 70+, 8.6% were of age 60-69, 2.8% were of age 50-59, 0.6% of age 40-49, and 0.2% of age 30-39. The data, however, does not take into account additional factors such as lack of respirators and hospital beds, and prioritization of care for younger individuals over older. This article goes into more depth about the risks of hospitalization and death based on age: https://www.vox.com/2020/3/23/21190033/coronavirus-covid-19-deaths-by-age

 

[Deploraboo]

So for under 60, on par with flu. What the hell are we doing in this Country?

 

[Sandisw]

Just a reminder, let’s try to keep the thread to the topic

 

[gblairs]

I had an ad in my FB feed for discounts on RR, Aulani, and CC direct. Up to $3500 off RR (250-299 points.) Up to $8000 off Aulani for same number of points, and up to $5500 off CC.

I saw the Aulani discount! They are closed until the end of the month and likely longer now that the state is sheltering in place. Was trying to figure out how it actually shakes out.

 

[Marmo]

Like several PP said. A recession, which is all but inevitable now, will drop prices. But the virus itself wont in the short run.

Recession in 2008 dropped prices significantly. We were planning on buying RR March 18th but after reaching out to our DVC agent she hasn't contacted us. I suspect with the impending recession/depression prices will fall some. We will buy when everything is more stable...looking forward to many vacations to come!!

 

[Deploraboo]

DIS has he wherewithal to just stop selling directly, especially RR. Until, of course, their cash situation deteriorates...

Te other resorts are supported by the financial stability of the various DVC owners, As that deteriorates, well, you know where I’m going here.

 

[OlieRow]

So for under 60, on par with flu. What the hell are we doing in this Country?

The flu does not put 5% of patients into the ICU on ventilators. I am an emergency medicine physician and I'm worried. Reports from colleagues in NYC and Georgia are rough. Lack of beds, lack of vents, lack of appropriate PPE. Here, our ICUs are nearly full even on good days and as of 2 days ago, our hospital (which is just now starting to see more super sick COVID patients over the past few days) only had 2 normal ventilators available. They have some transport vents and older "back ups".