Where is bottom?

[Johtull12]

I think it depends on how many points in the contract. 80 pt vs 250 pt vs 500 pt. The smaller contracts will always command a premium. I agree with previous posters, why would you sell for that amount unless you were under extreme circumstances?

I'm wondering when 2042 becomes an extreme circumstance. I can't imagine a 2042 contract in 10 years or even 5 years with high dues going for anything close to what they are at now. The compounding effect of an average 5% dues increase each year and the loss of time on contract doesn't seem, imho, to bode well for those resorts.

 

[SL6827]

So do most other timeshare companies have an expiration date as well? Or is Disney different in that way?

 

[Cfabar1]

I'm wondering when 2042 becomes an extreme circumstance. I can't imagine a 2042 contract in 10 years or even 5 years with high dues going for anything close to what they are at now. The compounding effect of an average 5% dues increase each year and the loss of time on contract doesn't seem, imho, to bode well for those resorts.

I find it compounded by additional challenges:

Boardwalk and BCV have a competitively priced product nearby in Swolphin…. If you are looking for a studio especially, there is yet another reason to not buy these products….

OKW has SSR as a competitor product - also you can buy OKW out to 2058 for not that much more money than OKW 2042…

BLT has Poly and VGF as more or less competitive options instead. (Walkable monorail resorts to MK). Is it exactly the same, no, but it is pretty darn close…

BR has CC as comparable product.

The beach resorts, funnily enough, are the most “unique”… there isn’t a direct competitor in Vero Beach to Disney’s Vero Beach Resort…. HHI doesn’t have a Disney competitor, though there are many timeshares in HHI… The dues are very high, and VB isn’t enough of a tourist attraction sadly…

It’s hard to justify 2042 prices due to high dues and prices not being mathematically divisible by the number of years… the longer resorts have a lower price per year in terms of the point cost…

 

[intamin]

So do most other timeshare companies have an expiration date as well? Or is Disney different in that way?

Some do. Some don't. Usually it's the maintenance fees that make other timeshares terrible as well as poor flexibility. It's the reason why for a lot of them you can't even pay people to take your timeshare.

 

[Cfabar1]

So do most other timeshare companies have an expiration date as well? Or is Disney different in that way?

Most do NOT have expirations that I know of… That is a double edged sword… People want to get rid of them and can’t… They die and their children reject inheriting them etc… That’s an extreme case…. When you’re 90 who wants to drive all the way down to Key West for a week!

a Hyatt Vacation Club property in Diamond season might cost you say $8-12k resale. It is a 2 BR unit, that you have a guaranteed deeded week EVERY year…. Or you can exchange it into the Hyatt system and stay in other hyatts…. It is yours forever, assuming you pay maintenance fees…. You can also exchange it into II very generously…

That’s the thing about DVC that’s amazing… Much higher cost… fixed term… and it has higher resale value than the rest….

 

[Flash_Sloth]

What’s the timeframe? Within the next 6 months?

An excellent question! We all know that in about 18 years, the 2042 resorts will be worth $0; the last year for points is 2041. The current valuation of the 2042 resorts vs other DVC resorts with over twice as many remaining years really boggles my brain.

They say that DVC holds its value so much better than other timeshares, and that might be true for a while. But even after my Riviera DVC contract expires and is worth $0, my Hilton Grand Vacations timeshare will still be going. Whether I'll still be around to enjoy them 40+ years from now is another story, but I hope to get many years of great times and memories out of them.

 

[Stank]

Where do you think DVC resort resale point costs will be? Here are some of my guesses:

VB $49 a point
HH $55 a point
AUL $80 a point
OKW $80 a point
AKV $83 a point
Riviera $118 a point
VGF $138 a point

Is this too “sky is falling”?

Fair predictions. I’ll throw in BLT for a Benjamin - $100. 6-7% rates on mortgages and new cars. Student loan payments resume. Deeper recession. Geopolitical issues—basically sleepwalking into WWIII. Disney resembling 5th century Rome—expensive and in disrepair. Ignoring needed maintenance across the board. They’re milking the parks for all they can get to keep streaming afloat. They got a $10 billion bill due in less than a year as they’re obligated to buy the rest of the stake in Hulu. They’re focused on reinstating dividend this year. Deluge of Direct DVC inventory in the pipeline. ROFR is on ice indefinitely—every corporation is laying off/slashing discretionary spending. No doubt the ROFR dog was called off months ago.

In the interim you’ll have a lot of ebbing/flowing/false sense of stabilization/recovery. It’ll follow the general stock market, which has been rallying since October, but will roll over. Prairie dogs poking their heads out thinking all is clear only to get bopped.

People will flock to rentals hoping to “wait out” the lull/buyers market, only to find renting is also falling/sitting. I think you’ll get a situation where just as we had panic buying the past 2+ years, you’ll have panic selling. Just as people bought and are now underwater on resale thinking they would never be able to vacation again unless they bought $190 BLT, you’ll have sellers rushing to rent/bank with another set of dues on the horizon where sellers will just want out because they don’t think they’ll be able to get out.

I’m seeing some wide spreads between brokers. Looks like one in particular has resale listings waaaay inflated above the bigger competition. The slow-to-adapt brokers looking to protect the sellers may lead to another flush down in prices. Those are a lot of contracts just sitting…and sitting…with certainly zero offers for months. Sure, some sellers may not be motivated nor need to sell. But many others are thinking why take $140 when I can get $160, only to find 2-3 months from now it’s now $120, therefore $140 was a good deal.

 

[Cfabar1]

I’m seeing some wide spreads between brokers. Looks like one in particular has resale listings waaaay inflated above the bigger competition. The slow-to-adapt brokers looking to protect the sellers may lead to another flush down in prices. Those are a lot of contracts just sitting…and sitting…with certainly zero offers for months. Sure, some sellers may not be motivated nor need to sell. But many others are thinking why take $140 when I can get $160, only to find 2-3 months from now it’s now $120, therefore $140 was a good deal.

So true… they’re also very pleasant and easy to deal with, which will help them a bit, but I agree… When I first started working with them they thought I was crazy, but were polite. Now they think I am crazy and are exasperated when I send them an offer… and Unlike a few months ago when I just “felt” DVC wasn’t worth what they were asking for it, I can now point to data from boards like this or recent sale prices to justify my prices - something they like even less!

 

[BeachClub2014]

The cyclical rising or falling of resale prices for the resorts only matters if you're actively buying or selling. If you're just using your points for amazing vacations, then the going rate for a point doesn't matter. The true value of a point is in its use.

 

[tom1944]

The cyclical rising or falling of resale prices for the resorts only matters if you're actively buying or selling. If you're just using your points for amazing vacations, then the going rate for a point doesn't matter. The true value of a point is in its use.

I agree we purchased SSR and I realize that over time it will probably lose value faster than resorts in better locations. But the price was right and I went in with the idea we will not sell it.

 

[tom1944]

As to the question where is the bottom. Ultimately the bottom is zero.

The bottom by the end of 2023 is down another 10 to 15% on average.

If we have a deep recession you will see bigger drops on certain contracts.

 

[Sandisw]

As to the question where is the bottom. Ultimately the bottom is zero.

The bottom by the end of 2023 is down another 10 to 15% on average.

If we have a deep recession you will see bigger drops on certain contracts.

I agree. The other things people have yo remember is that some of us bought contracts low just 5 or 6 years ago.

I have my SSR I paid $73 for in 2017. I would be able to sell that pretty quickly at that price…which means getting almost all my purchase price back after 6 years of use.

So, it comes down to how long a seller has had the contract but IMO, even if I was selling for what I paid it is a huge bonus to get that back after 6 years of vacations.

 

[tom1944]

I agree. The other things people have yo remember is that some of us bought contracts low just 5 or 6 years ago.

I have my SSR I paid $73 for in 2017. I would be able to sell that pretty quickly at that price…which means getting almost all my purchase price back after 6 years of use.

So, it comes down to how long a seller has had the contract but IMO, even if I was selling for what I paid it is a huge bonus to get that back after 6 years of vacations.

I was not in the market in 2017 but I could see prices returning to those prices in the next year. One reason is the contract length is now over 10% of its life shorter. Add in a struggling economy and some unfavorable Disney decisions all put negative pressure on prices.

I bought figuring we would never sell so I understood my fixed cost for 30 years.

My calculation was based on I wanted the product for multiple personal reasons and in comparison to not having it I would have spent more money to enjoy a similar product or even worse deprive myself of the product at all.

 

[AdamsMum]

I'm wondering when 2042 becomes an extreme circumstance. I can't imagine a 2042 contract in 10 years or even 5 years with high dues going for anything close to what they are at now. The compounding effect of an average 5% dues increase each year and the loss of time on contract doesn't seem, imho, to bode well for those resorts.

Well, I'll be 84 in January 2042, so I'm just running out the contracts. Hope I don't expire before they do!

 

[RichVIII]

And direct sales benefited because of the run up. We bought direct on a smaller contract since it was a negligible difference and they were unrestricted points. Now as prices fall back, the gap widens and those direct prices seem really steep now. We know they can put incentives in place but it seems like they climbed so quickly in a rocky economy. I guess we will wait and see!

 

[Johtull12]

I’m wondering if tax refund season might soften the deep dives we’re seeing. I don’t think your numbers are too far off though at this current trend. If the fed increases interest rates again, which I expect they will, people are going to be crushed under 7-year car loans and student loans resuming.

If you need a seven year car loan to buy a vehicle, please don't buy DVC.

 

[tom1944]

I am new at this and want to control how fast I jump in. Right now, I have a contract for 180 points in ROFR with some banked points. That will give me 450 points for 2023 and 2024.

Looking at what I need for a week in a 1 bedroom I would need 280 points to cover 90% of the 1-bedroom weeks/type in the 8 resorts I would like to book. None of those resorts require direct points. Most likely our additional purchase of 100 points will be resale.

The point chart on any new resort requiring direct points is going to be the reason I don't purchase direct.

We will be over 95 when our Saratoga points run out and depending on where we buy the additional 100 points those will take us to close to 100 years old. While my daughter and granddaughter will be 64 and 35 respectively when our initial points expire, I will leave it to them if in the future they want direct points.

 

[Stank]

If you need a seven year car loan to buy a vehicle, please don't buy DVC.

What about 10 year timeshare loans at 12-17%?

 

[🍀TwinsMom]

If you need a seven year car loan to buy a vehicle, please don't buy DVC.

Uh, we don't have any loans, and we're not buying DVC right now; saving for Poly 2.0, but thanks for your concern.

 

[TinkB278]

If you need a seven year car loan to buy a vehicle, please don't buy DVC.

If you can get a seven year loan at 0% Apr it actually is good financial sense with the falling value of the dollar etc.