Is anything selling?

[Cfabar1]

The Disney ecosystem lost bearing with reality…. From 2020 to 2022 the pendulum swung so hard and so fast in BOTH directions…. DVC was so appealing to people for a variety of reasons - price premium, etc. but also the desire for space, privacy, kitchens instead of going out, etc. was at a premium. Add to it, the parks weren’t staffed fully and getting dining reservations was hard. All of that played to DVC’s strengths.

Plus! Stimulus Checks, Free Money, all kinds of other things That made affording DVC easier for people… Interest rates near zero, etc. Refinancing your house? Now you can pay less money per month AND get a ”free” DVC ownership thrown in too with the money you’re saving. There was free money upon free money upon free money at that time…

Disney saw $$$s, and got way too expensive. A big part of these promotions in my view is to “right price” the parks. We know that Iger was worried the parks were pricing too many people out too quickly, and now a few months after he’s back promotions have started. They won’t lower the prices directly, but they will make the net cost to customers lower.

All of this is bad news for DVC prices (or good news, depending on how you think about it). Suddenly the hotel for a few nights at GF is more attractive. They have daily housekeeping after all, or the concierge lounge. And how many times do you want to be COMMITTED to going go Disney? Add in Disney’s record level of DEBT, and the desire to keep building and selling NEW resorts, and they are going to be conserving cash from ROFR in my view. My guess is they will gut as much s they possibly can from the “White Card” (not sure what is left), and work to prop up a little more the Blue Card benefits, but let the resale prices crater for the next few years… That Hulu bill isn’t going to be cheap! And that’s on top of the way too high debt they have, and the pressure to reinstate a dividend, and now an activist investor… The peanuts they will make on buying and reselling through ROFR won’t matter to them, and they care about “resale value” insofar as much as it helps sell NEW units… and perhaps that it doesn’t become so low that nobody wants to stay in their hotels and would just rent points online…. But we are nowhere near hitting those levels yet. And, who knows, they might even be “okay” with letting the 2042 resorts turn into a mad house for the final few years to entice people to buy into the newer resorts. Prices will be going lower I think, and I don’t see ROFR happening too much!

 

[Cfabar1]

What if DVC caps the ability/times to rent out (non-dvc as lead limit) then more people will buy instead of rent? Can they? Availability is still pretty tight so I am guessing these are people securing to rent out. They should at least do the numbers to see how many are actual owners.

My understanding is the contract is (purposely) very nebulous. I think there already are some sort of limits, but maybe I’m wrong. I also believe some have commented that the wording is such that it technically prohibits renting currently, but isn’t really read or enforced that way. Anything is possible… Especially for future resorts….

 

[Sandisw]

What if DVC caps the ability/times to rent out (non-dvc as lead limit) then more people will buy instead of rent? Can they? Availability is still pretty tight so I am guessing these are people securing to rent out. They should at least do the numbers to see how many are actual owners.

I think if they wanted a lower cap, it would be in place by now. Plus, I think that the majority of those who rent fall well below the current cap.

 

[HIRyeDVC]

I think everyone can agree that the last couple of years isn’t a good indication of the overall DVC market. The same could be said for the real estate and stock market. People just went crazy with the bidding of contracts, homes, and stocks, for multitude of reasons that now seem rash and silly. I agree that past trends do not automatically translate to future performance. But I think it does still reveal the cyclical nature of the economy. During the Great Recession, Disney was actively selling AKL, Aulani, BLT, VGC, and SSR at one point. I can only imagine similar apocalyptic sentiments that were probably expressed at the time. Since then, all those resorts have sold out and are worth more than what they originally sold. I’m not saying the same will happen going forward. I’m saying it’s not the end of the world for the economy, for Disney, and DVC. At least I hope it’s not!

Sorry, I gotta correct myself. Aulani obviously has not sold out. AKL and SSR might be around what it originally sold for. But I’m still optimistic!

 

[pianomanzano]

If i didn't read anything else but this thread this morning I'd think the sky is falling!

 

[havoc315]

If you want to sell your contract, you really need to be the LOWEST price among comparable contracts.
Being on the lower end won't do it. After all, if a buyer sees 1 contract listed as 100 points / $15,000 and another contract listed as 100 points $14,000... which is the buyer going to gravitate towards?

Re-sale market is hitting saturation. Buyers can pick and choose their contract.

Yes, if you're pricing is below what's been passing ROFRed.... then the sale might not go through to the buyer, but you'll still sell it.
For example, if I want a Beach Club contract of 150-200 points -- the board sponsor has 14 contracts in that range, for $147 to $175 per point. Those contracts in the $160's will likely sit around for a while.

The big question for all of us, is this a temporary market situation, or will it get even worse in the future?

My guess is that it will get worse before it gets better. Disney can control the supply of direct points -- Simply don't build more resorts, use more rooms as cash rooms -- Thus, they can keep the supply of direct points down. But the market for resale points is ever growing. It doesn't shrink (until 2042).

Some have cited a number of approximately 1% of DVC owners re-sale their contracts in any given year. It's possible the demand for re-sale just is no longer big enough to keep up. Eventually, the correction will occur with a reduction in prices. When those Beach Club contracts get reduced to $130+ instead of $160+, they will likely sell. (And Disney won't ROFR all of them).

 

[HIRyeDVC]

If i didn't read anything else but this thread this morning I'd think the sky is falling!

Whenever I feel this way, I just go and look at current wait times. Disney is doing fine

 

[stwaldman]

Whenever I feel this way, I just go and look at current wait times. Disney is doing fine

someone will tell you that they've run the numbers, and that this is historically the busiest friday in the first week of february every year and therefore your screenshot is a red herring

 

[HIRyeDVC]

someone will tell you that they've run the numbers, and that this is historically the busiest friday in the first week of february every year and therefore your screenshot is a red herring

And of course. Everyone is fed up with Disney’s nickel and diming and have all taken their money to Universal! The wait times are still high because of staffing issues!

 

[Duckbug.Ducktales]

And of course. Everyone is fed up with Disney’s nickel and diming and have all taken their money to Universal! The wait times are still high because of staffing issues!

True story: Father-in-law who lives in Sout FL refused to go back to Disney after the loss of Magical Express and FastPass+, so he did what he read "everyone" was doing and took his money to Universal. It was his first time. He doesn't do rough roller coasters so he figured he would try the studios park. After the 4th screen-based ride he said he was done, he could just do all that himself by watching movies at home on a massage chair to shake him.

He did just that and better! He used the money he was saving on vacations to build an amazing home theater in his house with a great surround sound system and he put in six massage chairs. Now we sometimes start our Disney trips by flying first to S. FL and watching the latest Diseny/Pixar movie with him lol

 

[DonMacGregor]

New jobs reports are indeed looking more hopeful. The housing market has not crashed, and interest rates are not rising so rapidly. I think there's room to hope. Doesn't necessarily mean DVC resale prices will go up, though.

517,000 new jobs, and the lowest unemployment rate since 1969, plus the Fed, while still increasing the prime rate, did so at a lower increment than anticipated...

 

[Matty B13]

Last summer when we were actively looking at upgrading to a new house, the pricing was just getting ridiculous but there were still people in higher tax brackets scooping up houses over asking price offers. We weren't in a rush to buy anything right away because we like our current home, and were worried about a another recession hitting. The realtor commented that "This won't be as bad as 2008"......... I responded by saying "That it could be worse". It took a long time for the last recession to unwind probably 5 years. I know because I bought my first house in 2005 and wanted to sell in 2010, and it took close to a year with a lot of price reductions.

I think we are just at the beginning of the next recession, could it be as bad as 2008 I hope not, but we won't know for a few years. DVC (along with all WDW) pricing went up dramatically from 2018 till now, and most of that can't be supported by the average buyer.

 

[HIRyeDVC]

True story: Father-in-law who lives in Sout FL refused to go back to Disney after the loss of Magical Express and FastPass+, so he did what he read "everyone" was doing and took his money to Universal. It was his first time. He doesn't do rough roller coasters so he figured he would try the studios park. After the 4th screen-based ride he said he was done, he could just do all that himself by watching movies at home on a massage chair to shake him.

He did just that and better! He used the money he was saving on vacations to build an amazing home theater in his house with a great surround sound system and he put in six massage chairs. Now we sometimes start our Disney trips by flying first to S. FL and watching the latest Diseny/Pixar movie with him lol

Sounds amazing! And yeah, I’ve heard many similar stories from people that have tried to shift to Universal. I think once your father gets tired of his Uber man cave, he’ll be back at Disney. It’s all cyclical!

 

[kboo]

Last summer when we were actively looking at upgrading to a new house, the pricing was just getting ridiculous but there were still people in higher tax brackets scooping up houses over asking price offers. We weren't in a rush to buy anything right away because we like our current home, and were worried about a another recession hitting.

We probably overpaid a bit in price, but made it up with a low interest rate on our mortgage. And we didn't overspend on the new place so we are ok carrying our old place for a bit. Ah, the joy of being both a buyer and a seller during these times.

 

[sleepymouse]

I am in ROFR on my first contract ever. I am super happy with the broker I am working with on this purchase. I am actually making offers on another contract already with the same broker. I have spoke with and emailed other resale companies, and my experiences thus far don't make me want to stray.

 

[GrumpyInPhilly]

I am in ROFR on my first contract ever. I am super happy with the broker I am working with on this purchase. I am actually making offers on another contract already with the same broker. I have spoke with and emailed other resale companies, and my experiences thus far don't make me want to stray.

If you are allowed to, would you want to share the name of your broker?

 

[sleepymouse]

If you are allowed to, would you want to share the name of your broker?

Definitely. Can someone tell me if it is okay to share company and/or name of broker?

 

[Stank]

If i didn't read anything else but this thread this morning I'd think the sky is falling!

Nope, not the sky—just DVC resale prices!

 

[Stank]

If i didn't read anything else but this thread this morning I'd think the sky is falling!

Nope, not the sky—just DVC resale prices!

 

[Stank]

517,000 new jobs, and the lowest unemployment rate since 1969, plus the Fed, while still increasing the prime rate, did so at a lower increment than anticipated...

Credit card usage skyrocketing, number of full time jobs lower today than a year ago, yet part time jobs increasing. Sounds more like people are getting multiple jobs to make ends meet vs. a strong economy.

Remember, in 2008 the one thing that caused the biggest uproar by far was not that people lost their homes, but because AMEX and Chase and Bank of America sent notifications in the mail that people’s $20,000 credit limit was reduced to $10,000. You would’ve thought the banks were stealing $10k from them with how upset people got.

So long as credit flows like the Nile, reality can be deferred somewhat indefinitely.