DVC and The Great Recession of 2007-2014

[crisi]

100% agree, time will tell.

I for one will be watching closely. I’ve learned from this thread that the impact on the DVC market will be lagging the real economy not by months but years. If COVID19 has a short / limited effect (bounce right back economy) then there will be minimal effect on DVC prices. If the recession is prolonged or becomes a depression, then the bottom of the DVC market will be long and deep, perhaps more pronounced than that of ‘08-‘014.

There isn't any reason to think it will be short. The fundamentals of 2019 were still there. The U.S. government hasn't taken sufficient action to shore up the economy. We are reopening with infections on the rise and epidemiologists and historians (the Spanish Flu) worry about a stronger wave in the Fall.

 

[lovethesun12]

100% agree, time will tell.

I for one will be watching closely. I’ve learned from this thread that the impact on the DVC market will be lagging the real economy not by months but years. If COVID19 has a short / limited effect (bounce right back economy) then there will be minimal effect on DVC prices. If the recession is prolonged or becomes a depression, then the bottom of the DVC market will be long and deep, perhaps more pronounced than that of ‘08-‘014.

Just curious - do you (or anyone) know what the % drop in price pre-recession to 2008? Wish I was paying closer attention then but I didn't start watching DVC until 2016 and I was too cheap to buy every year since I started looking

 

[SeaDis]

Wow, we bought our DVC in 2014 and got an amazing deal. The prices at that time were unreal. If they fall like that again, I may be adding on!

This! I was a "Never" on timeshares due to horror stories from family, and avoided making eye contact with the DVC kiosks for years. Which I've found out isn't hard because they never bark at you.

Wish we had bought right away. If there is significant drop and we can still swing it (for cash), I will average down my cost with an add-on.

 

[KAT4DISNEY]

Just curious - do you (or anyone) know what the % drop in price pre-recession to 2008? Wish I was paying closer attention then but I didn't start watching DVC until 2016 and I was too cheap to buy every year since I started looking

As I recall VWL, BWV and BCV were in the 15-20% range less than direct, however they were still in the vicinity of the price they had originally sold for. Maybe a little more. OKW was probably similar but not certain.

 

[emchen]

Just curious - do you (or anyone) know what the % drop in price pre-recession to 2008? Wish I was paying closer attention then but I didn't start watching DVC until 2016 and I was too cheap to buy every year since I started looking

According to many of the veterans, the trough wasn't until 2014...6 yrs into the recession. Here are three of them with specific stories that you may find illuminating:

In the last recession, DVC reached a point where they were exercising ROFR very, very infrequently. They had a shortage of buyers, and enough inventory not to have to ROFR older resorts. They also had new resorts coming online, so they had plenty to sell and an incentive to not add to the inventory of older resort points. Disney was hurting on cash rooms. I recall getting 35% off Poly one year, 25% off AND free dining at Poly another year, and whole long houses that were empty. I'd imagine that DVC also had room inventory that couldn't be rented, which could cause a shortage of cash to buy up those cheap ROFR contracts. In short, DVC hunkered down and rode it out.

FWIW, we made an unplanned, greatly unexpected purchase in Sept 2007 because the "offer was too good to refuse." On the very last day of our UY we stumbled into the Grand Cal preview center at Disneyland and were toured by a new-to-us west coast guide. She charmed us and surprised us. The incentives, that day, were stunning:

1. Current Year points (obviously)
2. Bonus Points (an additional full set of points)
3. New points the following day (triggered by the UY)
4. Discounted rate (rebate), I think
5. Two AP vouchers, no expiration to activate (which are currently valued as Platinum at WDW)

We were so surprised by the incentives that we purchased our largest single contract that day ... on a whim. Didn't see it coming.

Otherwise, our story is: bought, held. No other changes.

We bought in 2011 so not even the worst of it for about 50% of what current resale prices is. We wish we had bought more points then. We are thinking about buying another contract but since we don't really "need" it we are going to wait and see if prices drop some.

 

[ABE4DISNEY]

I don't know what the direct prices were but here are the prices I remember...

OKW was in the $50's
SSR $60's
BWV $70's
BCV $80's

 

[emilymad]

We bought SSR for $50 in 2011. We did a small point add on in 2012 for $65. We paid more for the add on since it matched exactly what we wanted. Our original purchase was the first offer we made. No real negotiation although we did offer lower than listing price.

We are looking for an add on contract but we would want the price to be in the $70s. Maybe we get there, maybe not...

 

[CarolMN]

I don't know what the direct prices were but here are the prices I remember...

OKW was in the $50's
SSR $60's
BWV $70's
BCV $80's

The DVC Resource Center has a history of DVC direct prices that some may find interesting.

https://www.disboards.com/threads/t...-updated-december-2019.3655476/#post-58628430

 

[DMKEDM]

I bought my first set of points (150 at SSR) in 2006. Added on 5 times (all small contracts) by 2009. Memories of that time frame are a bit dim by now...but I do recall buy-in price at SSR was $86/point; add-on's (2 of them) at SSR were at $95/point...add'on's (3 of them) at BCV were at ($90, $95 and $101/point); there were no closing costs...I also remember watching the resale market (I bought all my points direct) and my memory is that prices went way low until just a few years ago...again, memories are dim but I think my SSR points were worth only around $50/point at the low point...

Of course a recession (or, as some are forecasting, a depression) would impact DVC prices...but I think an even bigger impact will be felt from whatever "experience changes" are in store for us...will I (and hordes of others) still want to go regularly in the face of limited capacity at the parks/attractions at the parks, annual pass changes (what will happen to park-hopping?), having to wear masks (a BIG issue for me...those masks are incredibly uncomfortable; I can handle wearing one for the hour or less I'm in a grocery store...but for hours in a park on a hot humid day? That could transform Disney from my most favorite place in the world to a place I would (hugely regretfully) never go to again)...? Then there's the whole rental issue--knowing I can (could) rent points gave me some financial "safety net-type security" each time I bought...not so sure the rental market will survive, in a way meaningful enough for me to view the possibility of renting as a "back-stop." Add in non-pandemic changes such as resale restrictions at the Riviera (and other new resorts), changes (temporary tho they may be) to the borrowing rules, and the likely new challenges in traveling, and I think the adverse impact may go well beyond pressure from a recession (or depression)...

Balancing that on the positive side: Disney is brilliant at crowd control, guest experience, providing superb value for the money spent...if any company can figure out a way to keep WDW the most magical of places, it's Disney...so all these (many of them temporary) adverse changes may be mitigated in a way where they will have little to no adverse impact...(I sure hope that turns out to be true)...

I think it's too soon to tell what the impact will be, or how long it will take to bounce back (if ever it does). Since I'm not planning to either sell any of my points or buy any new ones, I can be patient. For those looking to take advantage of falling prices, tho, to acquire a new set of points, speculation about what will happen to points prices is very timely ... good luck to all...

 

[CastAStone]

One big difference between now and 2010 is that DVC was on a breakneck building pace, and wound up stuck with 3 mega resorts that they wildly overestimated the popularity of and that took them years and years to sell out (AKL, SSR, Aulani). For a period of time in 2010 they were selling 5 resorts; those 3 Plus BLT and VGC. Over inventory in the direct market certainly must have put pressure on the market overall.