When will Riviera resales be available

[dvcsince93]

DRR has sold more contracts in its first month than CCV did.- 850 vs 530.

Looking back, the first CCV deeds were recorded in April 2017- since then DVD has sold nearly 20K contracts and to date, there have been about 60 resale contracts recorded with the first being in Feb. 2018. I have not seen any buybacks of CCV to date.

 

[Bing Showei]

I personally see a see a scenario where DVC will ROFR most DRR points as the resale values get so low. Hence DVC will be holding most of the points for direct purchase.

The idea that prices would get so low that Disney would buy it up consistently defies how we've seen the resale market behave historically. If prices for Riviera get so low that Disney grabs them, buyers will offer more; sellers won't want to be leaving money on the table either. Peruse the ROFR thread and you'll see exactly this play out over the last 4 months; the $/pt creep of BLT, as a result of ROFR activity comes to mind.

The only way Disney gets a shot at taking a contract with ROFR is if a buyer says, "I'm willing to pay X for that contract." If Disney likes and takes it, that same buyer may try it again, but if Disney continues to take it at "X," the buyer will either adjust +$1, +$2, +$5, whatever it is until Disney doesn't take it anymore, or throw in the towel and go direct buying whatever timeshare Disney is selling at the time.

Unless there is a great demand for it once sold out, Disney will not be buying back actively just to turn around and continue to resell the same resort. They'll be focused on whatever they are actively marketing. Their goal is to build, sell, rinse, repeat. Selling "sold out" properties is just a distraction from that primary objective.

 

[mustinjourney]

I will admit that when I first heard about the resale restrictions, I was hoping to pick up some distressed RIV resale in 2020 to use for RIV only, as we have plenty of unrestricted points. Then pixie dust + FOMO + seeing the rooms and Skyliner running IRL changed my view.

Taking a step back, though, I didn't see the resale prices being worth the tradeoffs any time soon, so we ended up buying direct. Tradeoffs being: having to wait 1-2 more years to see how resale prices settle, plus wait time on ROFR, potentially buying a stripped contract, prolonged closing time. The restriction on staying somewhere else on those points didn't bother me that much because I have unrestricted points and direct benefits already, so I didn't think that saving a few thousand $ was worth the multi-year wait. (And what if resales are priced at $150 pp for a 200 point contract, which one could get direct for $167 pp now? Is it really worth saving $3400 over 2 years? I could probably rent 1 year's worth of points for about that amount.) Plus we did actually have a need for more points before I thought we'd see a reasonably-priced resale out there.

(I'd be interested to hear if anyone would analyze this differently.)

that's almost exactly where I'm at right now...trying to decide if I should pull the trigger before June 1

 

[kboo]

Reading more - and realizing how many new sales are financed - with RIV not even opening until December - I am starting to think we may see some resale contracts before the resort even opens, unless DVD agrees to (quietly) take back some contracts from buyers who find themselves in truly terrible situations (deaths, job loss, etc.)

I, for one, will not rejoice when that happens, because whether the person financed or not, they are taking a loss selling resale so soon.

 

[Jason@dvcstore]

sellers won't want to be leaving money on the table either.

I think this is the key thing to remember. I don't think the owners are going to be lining up to sell at super low prices. I think they would keep the property until the market improves.

 

[mustinjourney]

I think this is the key thing to remember. I don't think the owners are going to be lining up to sell at super low prices. I think they would keep the property until the market improves.

this is true -- but if a seller is in a hurry to dump a contract, they'll have to take whatever the market is willing to pay. If the market decides $110 is the price for a resale property that can NEVER be used anywhere else, then that seller will be forced to take whatever offers are out there or hold on to the contract. But again, if they're desperate -- they likely can't afford to hold on.

This could easily happen in the case of a divorce or death (parents leave fully paid off contract to multiple children).

 

[aoconnor]

this is true -- but if a seller is in a hurry to dump a contract, they'll have to take whatever the market is willing to pay. If the market decides $110 is the price for a resale property that can NEVER be used anywhere else, then that seller will be forced to take whatever offers are out there or hold on to the contract. But again, if they're desperate -- they likely can't afford to hold on.

This could easily happen in the case of a divorce or death (parents leave fully paid off contract to multiple children).

As others have pointed out the issue is a majority (I believe another poster said 75%?) of people are financing these direct purchases- yikes. If they paid $188 per point and have an 80% mortgage they'd have to sell them for ~$150 per point just to be able to pay off the loan. Really it's more like $163 per point accounting for a standard 8% brokerage commission to net $150.

If the resale market value is $110 as you speculated, they'd either have to come up with $53 per point in cash to pay off the loan (likely less since they would have paid off some principal by then), default on the loan and take a hit on their credit, or hold on to it and rent out the points and hope the value increases. I'd do the latter but I wonder if renting would even cover the combined MF and interest payments.

 

[summerw]

The idea that prices would get so low that Disney would buy it up consistently defies how we've seen the resale market behave historically. If prices for Riviera get so low that Disney grabs them, buyers will offer more; sellers won't want to be leaving money on the table either. Peruse the ROFR thread and you'll see exactly this play out over the last 4 months; the $/pt creep of BLT, as a result of ROFR activity comes to mind.

The only way Disney gets a shot at taking a contract with ROFR is if a buyer says, "I'm willing to pay X for that contract." If Disney likes and takes it, that same buyer may try it again, but if Disney continues to take it at "X," the buyer will either adjust +$1, +$2, +$5, whatever it is until Disney doesn't take it anymore, or throw in the towel and go direct buying whatever timeshare Disney is selling at the time.

Unless there is a great demand for it once sold out, Disney will not be buying back actively just to turn around and continue to resell the same resort. They'll be focused on whatever they are actively marketing. Their goal is to build, sell, rinse, repeat. Selling "sold out" properties is just a distraction from that primary objective.

So where do you see Riviera falling price wise for resales? You have such well thought out responses, I’d be interested in hearing your opinion.

 

[Bing Showei]

So where do you see Riviera falling price wise for resales? You have such well thought out responses, I’d be interested in hearing your opinion.

Short answer: I have no idea.

Long answer: It’ll be more than I will be willing to pay, I’m sure, but someone out there will be willing to pay it. If I were someone who loves Riviera and would buy in resale, I would buy direct today instead. I’m guessing those banking on tanking Riviera resale prices will be disappointed.

My personal take on it is this: Disney has finally, meaningfully, differentiated their retail product from the resale alternative. In so doing, they’ve created a situation where I am unlikely to ever buy another resale contract. At the same time, I will never buy another direct contract either unless it ticks every last box (Think: Epcot gate, Yacht Club Villas, DHS Resort with walking path). Riviera falls short of that for me.

My point in all this is that to me, personally, all resale contracts on the market have gone down in value, yet prices continue to defy gravity and I’m at a loss to explain steadily rising BLT and BCV prices. So what do I know? As fun as it would be to pull a number out of my bum like every other prognosticator, I’ll probably be wrong.

Pulling-a-number-out-of-my-bum-bonus-answer: First contracts: $160. Eventually settles into $140’s, barring economic meltdown.

 

[CarolMN]

Brokers make it so easy to rent points these days, and I expect a lot of demand for DRR rentals. To me, that makes it a lot less likely that buyers will be in a hurry to get rid of their contracts for bargain prices. I'm beginning to think DRR contracts will hold their own for at least the foreseeable future.

 

[aoconnor]

Pulling-a-number-out-of-my-bum-bonus-answer: First contracts: $160. Eventually settles into $140’s, barring economic meltdown.

I agree the first ones will be higher, especially for the first year or so as savvy current DVC owners buy add-ons to use strictly at RIV to complement their other points. After that my personal guess is it settles around $130 with small contracts at $140ish. Above that I don't think the discount to direct is great enough to justify the extreme restrictions, but who knows.

Brokers make it so easy to rent points these days, and I expect a lot of demand for DRR rentals. To me, that makes it a lot less likely that buyers will be in a hurry to get rid of their contracts for bargain prices. I'm beginning to think DRR contracts will hold their own for at least the foreseeable future.

So, we now know that ~75% of direct buyers are financing. According to Disney's website, to buy 100 points financed through them would be $243 a month-- i.e. $29 per point per year in payments. Add in $8.31 in dues and your annual cost is $37.47 per point. Renting points at $16 wouldn't cover even half your expenses, so if they're having financial trouble/ have a life change they might not have a choice but to sell or default.

 

[summerw]

Short answer: I have no idea.

Long answer: It’ll be more than I will be willing to pay, I’m sure, but someone out there will be willing to pay it. If I were someone who loves Riviera and would buy in resale, I would buy direct today instead. I’m guessing those banking on tanking Riviera resale prices will be disappointed.

My personal take on it is this: Disney has finally, meaningfully, differentiated their retail product from the resale alternative. In so doing, they’ve created a situation where I am unlikely to ever buy another resale contract. At the same time, I will never buy another direct contract either unless it ticks every last box (Think: Epcot gate, Yacht Club Villas, DHS Resort with walking path). Riviera falls short of that for me.

My point in all this is that to me, personally, all resale contracts on the market have gone down in value, yet prices continue to defy gravity and I’m at a loss to explain steadily rising BLT and BCV prices. So what do I know? As fun as it would be to pull a number out of my bum like every other prognosticator, I’ll probably be wrong.

Pulling-a-number-out-of-my-bum-bonus-answer: First contracts: $160. Eventually settles into $140’s, barring economic meltdown.

Thanks for your response!! I appreciate your bum number.

Unfortunately we don’t own yet so we can’t boycott and still enjoy DVC. I think I would feel similarly if we were grandfathered in.

I’m definitely not hoping for Riviera to tank to snap it up resale. We’ll probably purchase direct very soon. If they hadn’t added these restrictions, I would have already purchased.

 

[mustinjourney]

As others have pointed out the issue is a majority (I believe another poster said 75%?) of people are financing these direct purchases- yikes. If they paid $188 per point and have an 80% mortgage they'd have to sell them for ~$150 per point just to be able to pay off the loan. Really it's more like $163 per point accounting for a standard 8% brokerage commission to net $150.

If the resale market value is $110 as you speculated, they'd either have to come up with $53 per point in cash to pay off the loan (likely less since they would have paid off some principal by then), default on the loan and take a hit on their credit, or hold on to it and rent out the points and hope the value increases. I'd do the latter but I wonder if renting would even cover the combined MF and interest payments.

Again. If they’re going thru a divorce, they won’t have much choice.

 

[kboo]

If the resale market value is $110 as you speculated, they'd either have to come up with $53 per point in cash to pay off the loan (likely less since they would have paid off some principal by then), default on the loan and take a hit on their credit, or hold on to it and rent out the points and hope the value increases. I'd do the latter but I wonder if renting would even cover the combined MF and interest payments.

So, we now know that ~75% of direct buyers are financing. According to Disney's website, to buy 100 points financed through them would be $243 a month-- i.e. $29 per point per year in payments. Add in $8.31 in dues and your annual cost is $37.47 per point. Renting points at $16 wouldn't cover even half your expenses, so if they're having financial trouble/ have a life change they might not have a choice but to sell or default.

This is actually really scary seeing the numbers like this ... saw on social media recently someone who'd bought direct in December who got prior year and current year's points, hasn't even used the contract yet, who just lost his job and needs to sell. He financed, and there's lot of well-meaning comments like, "rent your points!" but doing so won't cover his mortgage payments for very long, and since he bought so recently, he'd have to sell for over $160pp in order to not have to come up with money at closing. It's very sad.

Short answer: I have no idea.

Long answer: It’ll be more than I will be willing to pay, I’m sure, but someone out there will be willing to pay it. If I were someone who loves Riviera and would buy in resale, I would buy direct today instead. I’m guessing those banking on tanking Riviera resale prices will be disappointed.

My personal take on it is this: Disney has finally, meaningfully, differentiated their retail product from the resale alternative. In so doing, they’ve created a situation where I am unlikely to ever buy another resale contract. At the same time, I will never buy another direct contract either unless it ticks every last box (Think: Epcot gate, Yacht Club Villas, DHS Resort with walking path). Riviera falls short of that for me.

My point in all this is that to me, personally, all resale contracts on the market have gone down in value, yet prices continue to defy gravity and I’m at a loss to explain steadily rising BLT and BCV prices. So what do I know? As fun as it would be to pull a number out of my bum like every other prognosticator, I’ll probably be wrong.

Pulling-a-number-out-of-my-bum-bonus-answer: First contracts: $160. Eventually settles into $140’s, barring economic meltdown.

My out of my bum answer was $150 (I swear!) and when I realized that I could get RIV for not that much more than BLT resale, that kind of sealed the deal. We "needed" more points anyway...

 

[Bing Showei]

Thanks for your response!! I appreciate your bum number.

Unfortunately we don’t own yet so we can’t boycott and still enjoy DVC. I think I would feel similarly if we were grandfathered in.

I’m definitely not hoping for Riviera to tank to snap it up resale. We’ll probably purchase direct very soon. If they hadn’t added these restrictions, I would have already purchased.

If you haven't bought in yet, this is just the new reality. There's no need to boycott or lament how things used to be, because they were never that way for you. I don't recommend wasting energy putting that on yourself.

I'm not buying Riviera. Not because I'm protesting (which is exactly what I was doing initially), but because I don't like the increased risk I would assume buying direct. After a few new resorts coming online over the next several years, those concerns may prove to be overblown; in which case, I'll re-evaluate. At this point, Disney is not going to change their resale policy, people will continue to line up around the block to buy the newest thing, and I'm no longer going to delude myself into believing that I could move the needle with my piddly $35,000 abstention.

There are people who remember flying coach and being treated like royalty. Warm snacks, hot meals, decent legroom and blankets were all included with the purchase of a ticket. Now if you want that experience, you have to buy a first/business class seat. And people who buy coach expect to be nickel and dimed for snacks, food, extra legroom, blankets, etc. This is the new reality for any flyer. I don't imagine a lot of people are still protesting the removal of meals or loss of legroom. It is what it is. Today, you buy to fly from point A to point B.

If you buy a Disney timeshare to enjoy it, can treat it as a sunk cost, and can afford to keep it without adding undue stress on your family, you'll likely find a lot of success (and years of happiness) owning at Riviera by way of Disney's first class boarding pass.

 

[summerw]

If you haven't bought in yet, this is just the new reality. There's no need to boycott or lament how things used to be, because they were never that way for you. I don't recommend wasting energy putting that on yourself.

I'm not buying Riviera. Not because I'm protesting (which is exactly what I was doing initially), but because I don't like the increased risk I would assume buying direct. After a few new resorts coming online over the next several years, those concerns may prove to be overblown; in which case, I'll re-evaluate. At this point, Disney is not going to change their resale policy, people will continue to line up around the block to buy the newest thing, and I'm no longer going to delude myself into believing that I could move the needle with my piddly $35,000 abstention.

There are people who remember flying coach and being treated like royalty. Warm snacks, hot meals, decent legroom and blankets were all included with the purchase of a ticket. Now if you want that experience, you have to buy a first/business class seat. And people who buy coach expect to be nickel and dimed for snacks, food, extra legroom, blankets, etc. This is the new reality for any flyer. I don't imagine a lot of people are still protesting the removal of meals or loss of legroom. It is what it is. Today, you buy to fly from point A to point B.

If you buy a Disney timeshare to enjoy it, can treat it as a sunk cost, and can afford to keep it without adding undue stress on your family, you'll likely find a lot of success (and years of happiness) owning at Riviera by way of Disney's first class boarding pass.

Thanks! I’d actually started moving money and getting ready to call tomorrow to get it done before reading this. I agree totally with your post. However, your logic is leaving no room for my unnecessary decision-making angst.

Thank you for sharing your thoughts and I support your protest even as I cross the line to purchase!

 

[Katie L]

There are people who remember flying coach and being treated like royalty. Warm snacks, hot meals, decent legroom and blankets were all included with the purchase of a ticket. Now if you want that experience, you have to buy a first/business class seat. And people who buy coach expect to be nickel and dimed for snacks, food, extra legroom, blankets, etc. This is the new reality for any flyer. I don't imagine a lot of people are still protesting the removal of meals or loss of legroom. It is what it is. Today, you buy to fly from point A to point B.

But in the interim flight prices went way down...

Not so for DVC. But again, this is an optional purchase. We are tempted by Riviera but really can't afford the number of points we want when paying cash. (I won't be part of the 66%... ) So resale for now. And if our finances change, there are 50 years of Riviera...

 

[Jason@dvcstore]

If the resale market value is $110 as you speculated, they'd either have to come up with $53 per point in cash to pay off the loan (likely less since they would have paid off some principal by then), default on the loan and take a hit on their credit, or hold on to it and rent out the points and hope the value increases. I'd do the latter but I wonder if renting would even cover the combined MF and interest payments.

Another good point. If a seller is desperate to sell, however, they will owe a bunch of money at closing to get out of the contract they will simply stop making payments and let Disney foreclose on them.

 

[chalee94]

The idea that prices would get so low that Disney would buy it up consistently defies how we've seen the resale market behave historically. If prices for Riviera get so low that Disney grabs them, buyers will offer more; sellers won't want to be leaving money on the table either. Peruse the ROFR thread and you'll see exactly this play out over the last 4 months; the $/pt creep of BLT, as a result of ROFR activity comes to mind.

The only way Disney gets a shot at taking a contract with ROFR is if a buyer says, "I'm willing to pay X for that contract." If Disney likes and takes it, that same buyer may try it again, but if Disney continues to take it at "X," the buyer will either adjust +$1, +$2, +$5, whatever it is until Disney doesn't take it anymore, or throw in the towel and go direct buying whatever timeshare Disney is selling at the time.

If buyers love Riviera that much, I agree with you.

But I do notice that your only options are 1) pay whatever it takes to get Riviera or 2) buy direct.

I think a 3rd option will drive demand elasticity: give up on Riviera due to the restrictions and substitute a Legacy 14 resort due to the relative flexibility. I might accept RIV as a great deal but I do have a number of other options if I leave the table.

It'll be an interesting test case.

(I should add that I don't consider Riviera to be a legitimate Epcot resort. That perception will probably be very important over time.)

 

[Frederic Civish]

My point in all this is that to me, personally, all resale contracts on the market have gone down in value, yet prices continue to defy gravity and I’m at a loss to explain steadily rising BLT and BCV prices.

I don't think all resale contracts have gone down in value.

First, the only new restriction on resale contracts is that they can't use Riviera, but, until a few months ago, they couldn't do that before, so it isn't like something was taken away. It just wasn't added.

Second, even if resale contracts can't stay at Riviera, in a way, the fact that they can stay at the L14 might actually be increasing their value. Future Riviera and Reflections Resale buyers won't be able to get into the L14. So, the only way to stay at the L14 in the future is by Resale, or to buy Direct from Disney. People want the L14. Disney prices are very high and keep going up. So Resale becomes a better and better option, the farther down the road we get and the more new 'restricted' properties open up.

Third, Disney keeps raising the prices on their room. Every time they raise their room rates, your DVC points increase in value. That is an upward pressure on price and I don't see it going away.

BCV and Boardwalk are staying even or going up in price, not because of some Fantasyland, but because people want to stay there and even with only 23 years left on the contract, if people buy now they will more than get their money's worth.