Where do the sellers come from?

[SL6827]

Best wishes to you. You seemed to have really enjoyed your DVC ownership, and now you are doing something for your health.

I did, no joke, I actually got to stay in a club level studio at AKL for two nights with it. Still can't believe that.

 

[rg35]

The best question would be: where are all the sellers?
More than 80% of the deeds sold at OKW are still owned by the original buyers. For a 27 years old resort it is impressive. Unless there is a mass sellout anytime soon, it seems the average ownership lenght will be over 30 years. For a timeshare! Many people don't own their house that long. The reason DVC resale prices are so high is that not many owners sell.

I think Old Key West and some of the earlier resorts will wind up being outliers. OKW was $48 a point in pre-sale in 1991. When my grandparents bought in '93 it was $57.50/pp - $9200 for a 160 point contract...plus, you got free park hopper tickets for your stay for X years, which was a major incentive and a huge discount on future vacations until the perk went away.

Adjusting for inflation, wages today for most American workers have barely moved since then. The cost increases of DVC and park tickets is far outpacing real wage growth.

Current buyers are paying (a lot) more, likely financing, and paying dues that have increased substantially (in addition to substantial increases on park tickets and everything else associated with Disney vacations). It would not surprise me if the term of ownership for newer resorts is shorter (I'd really love to see the data on it). Resales also don't take into account foreclosures, although I admittedly have no idea how many of those there are per year.

 

[crvetter]

Adjusting for inflation, wages today for most American workers have barely moved since then. The cost increases of DVC and park tickets is far outpacing real wage growth.

See my post below from another thread. Since DVC started the AWI has outpaced CPI by a fair margin. Though I suppose an argument could be made who is an average American but the AWI is based on data from SSA. Though that thread alos goes into details how DVC is outpacing both wage and inflation growths. So perhaps OKW is an outlier, but analysis done by @dvcsince93 (Summary Analysis Thread) has shown that newer resorts are far less turnover than OKW, I think that was the result. Perhaps they can confirm that for us. But either way it certainly showed the average contract is not held only to 10 years as BLT, about 10 years now, I think was found to have around 10% resale which is far less to make the average 10 years. So assuming same turnover you get to about were OKW is now. The question is how would CCV, PVB, and DRR do in 8 years from now that is question but since DVC has always outpaced inflation and wage growth all indications are that much might not change (barring Disney becoming a destination that is undesirable to visit which to me is the key why DVC doesn't behave at all like other timeshares). If resale upticks too much DVC is hitting a point where I would think Direct sales start to hurt, because resale prices drop opening that spread; the main reason for high resale prices is the simple fact most people aren't reselling (supply and demand).

Also as a quick aside the park hopper tickets were not a perk that was taken away. They were a sales incentive (that was a deeded right) to convince people to buy into a product. Those early buyers knew exactly how long the tickets would keep coming, when they would go away, what parks they worked at (no AK), and how many they would get.

Well actually earnings increases pretty much are correlated with inflation, sort of required for a well functioning economy. Inflation is a measure of a basket of common household goods a US citizen would purchase, thus if inflation outpaces wage growth people stop being able to live and quality of life plummets and eventually would disappear. Also inflation here being discussed is US inflation thus should correlate that to US wage growth. Historically since 1951 Wage growth has outpaced inflation

View attachment 407371

Looking at the annual growths you see very few times inflation outpaced wage growth. Any time inflation outpaces wage growth for extended periods of time there will be large macroeconomic issues and if it continues consistently you have situations like Venezuela.

View attachment 407372

Here is looking at a comparison from 2007 (peak market before crash) until 2017. You see them pretty much in lock step. So overall the past 10 years has shown we can expect wage growth (median is used here which is a better measure for middle class) and inflation to be similar.

View attachment 407373

Looking at 1990 forward (last 30 years or so) we see wage growth still outpacing.

View attachment 407375

Median Wage (From Social Security Admin)
https://www.ssa.gov/oact/cola/AWI.html
CPI (Measure of Inflation for US)
https://fred.stlouisfed.org/series/CPIAUCSL

 

[MiniMN]

When we bought the first time, we considered an "expand and contract" approach. We decided to buy a basic 150 point contract (SSR....it's treated us SO well). Then add on in bits as we could afford so we could take children and grandchildren. But we also considered that if we decided we did not need as many points, we could sell off the smaller contracts, or pass them to our children. Alternatively, if we found ourselves short of cash or in some unforeseen need, we could sell off one of the small contracts without losing our whole foot in the door. We are so glad we bought what and how we did. Two days ago I looked up the rack rate for a room during the Princess 1/2 weekend: $224 for Pop!! I realize my now more expensive AP may allow a decent discount, but it's still going to outrun what I paid for my SSR points.

 

[MICKIMINI]

Consider that buying DVC is different than buying a house in that, you are buying the "same" product direct or resale from any broker (direct benefits are the exception). For example: you buy 100 OKW, so although your deed shows a fraction of a certain unit, you are buying any available unit in the category in which you reserved - studio, for example. You are not buying a specific "house" based on location, condition, high end finishes, etc...you are buying points to exchange for a villa. People change love for resorts based on family size and ages of individuals, have kids in college and a myriad of other circumstances that may lead a member to sell and often buy again. Many people own multiple contracts and buy and sell as they need. If you don't need direct benefits - most people probably do not, buy resale... Location, location, location - Disney will always have value.

 

[cvjw]

We’ve sold half of our points -used to own 800+ points at 4 resorts. We just became disenchanted with Disney. Prices always climbing. Perks being taken away. The crowds at all times of the year. We rent the rest of the points and pay for Disney cruises. We will probably sell the last 2 contracts in the coming few years and just be totally done with Disney!

We purchased all our points for cash and have sold for more than we paid for the contracts. And have lots of good memories from when our boys were young and Disney was a different place!

 

[gscott8075]

We owned OKW and HHI since 2001. Sold OKW after a few years. Just sold HHI this year.

Loved the Disney experience. HHI is a great resort and a wonderful place to vacation. We stayed there 14 times.

We rented a house with friends at Sea Pines and realized that HHI is a great place unto itself and we didn’t need DVC to make it happen.

Too many rule changes with increasing frequency over the years which suggest more as the years go on. Dues increased faster than the rate of inflation. Point reallocation messed up our plans causing us to buy a small contract. And, the simple fact that there were 41 years left when we bought and now we are down to 22 years. That’s half the time and at some point, the capital outlay will become a wasting asset.

In 2001 it cost 33 points Sun-Thu and $105 in MF to stay in a 2 br. In 2018, it costs 41 points per night Sun-Thu and $350 in MF. Way higher than the inflation rate.

We sold at the right time for us and recaptured more than our original purchase price.

The economics have changed dramatically and if we were looking at DVC today, we would not participate.

We do have almost 20 years of great vacations and great memories.

 

[crisi]

We owned OKW and HHI since 2001. Sold OKW after a few years. Just sold HHI this year.

Loved the Disney experience. HHI is a great resort and a wonderful place to vacation. We stayed there 14 times.

We rented a house with friends at Sea Pines and realized that HHI is a great place unto itself and we didn’t need DVC to make it happen.

Too many rule changes with increasing frequency over the years which suggest more as the years go on. Dues increased faster than the rate of inflation. Point reallocation messed up our plans causing us to buy a small contract. And, the simple fact that there were 41 years left when we bought and now we are down to 22 years. That’s half the time and at some point, the capital outlay will become a wasting asset.

In 2001 it cost 33 points Sun-Thu and $105 in MF to stay in a 2 br. In 2018, it costs 41 points per night Sun-Thu and $350 in MF. Way higher than the inflation rate.

We sold at the right time for us and recaptured more than our original purchase price.

The economics have changed dramatically and if we were looking at DVC today, we would not participate.

We do have almost 20 years of great vacations and great memories.

we spent a snowbird week in HHI last year and pretty much came to the same conclusion - there is LOTS of rental property on HHI. We are going to use our DVC points next year (last year we stayed at a friend's place) because we aren't ready to sell and we have them, but if we continue to stay at HHI, I think we will rent. We are also snowbirding, which makes HHI easy and cheap compared to renting there in the Summer. I love the DVC resort at HH, it feels relaxing and removed, but it isn't hard to find that on HHI.

 

[TavieP]

I think Old Key West and some of the earlier resorts will wind up being outliers. OKW was $48 a point in pre-sale in 1991. When my grandparents bought in '93 it was $57.50/pp - $9200 for a 160 point contract...plus, you got free park hopper tickets for your stay for X years, which was a major incentive and a huge discount on future vacations until the perk went away.

This was huge. In 2013, my sister and I took over the contract my parents purchased in 1993- 235 points at OKW (then “Disney’s Vacation Club’s Resort”) I think they spent around $12,000 for it at the time- and we have used it regularly (once or twice a year) since then, but no way I could afford a 235 point contract at any resort if I were purchasing myself today! We really hit the jackpot with that. And the park tickets were a HUGE incentive for our family back then. My mom started taking our best girlfriends along on our vacations with us because of how cost-effective it was.