Here’s Why Resale Has Plenty of Room to Rise

[Nabas]

i must be missing something because it very plain to me. If someone bought in early 2020 and got great deal on DVC and now that same person looks at todays prices and said to them self im glad i bought when i bought because i could not buy in at todays price make sense to me. i bought AKL for 85 per point for 185 pts but today the want 127 per point i would have to finance it which even cost more.I would not sell it because i would not be able to use it at a great savings. Some people get lucky and get a great deal some hold off thinking the price will drop or wait too long and dont buy in AT TODAYS PRICE

The OP is using false logic to make a convoluted argument, yet suggests anyone who disagrees is being emotional:

I’ve been really surprised at the emotional reactions to this.​

The OP continues to ignore that selling a DVC contract means it has to be replaced with something. Seriously, is the OP suggesting I am not going to vacation?

Let's use a home purchase as a comparison.

Let's say I bought a house last year for $100,000 and it's worth $200,000 today. By the OP's logic, I really paid $200,000 for that house.

My mortgage payment would beg to differ.

Rather, I am fortunate that I was able to purchase my (now) $200,000 house for only $100,000.

The OP is wrong. I did not pay $200,000 for it.

If I sell that house, I need to find another place to live. Based on fair market value, I'm going to pay $200,000 for an equivalent house, potentially the exact house I just sold. If I did what the OP suggested, then I would be paying $200,000 for that house's replacement. Then I would be paying $200,000 for a house that I previously spent $100,000 for.

A DVC membership is similar. If I sell my current inexpensive DVC contract, I will end up replacing it with a much (much) more expensive DVC contract. Like a house, I will pay a realtor's commission to sell my DVC, and I will pay closing costs to buy its replacement. I end up losing by selling at today's price.

The reality is that I am fortunate to be paying a fraction of today's Disney prices to stay at a DVC resort.

 

[Drewski77]

yes and that what makes this board so valuable that everyone can voice there opinion. whos to say right or wrong its a discussion with different points of views and who knows maybe we learn something

Very well said, I agree 100%.

 

[Drewski77]

The OP is using false logic to make a convoluted argument, yet suggests anyone who disagrees is being emotional:

I’ve been really surprised at the emotional reactions to this.​

The OP continues to ignore that selling a DVC contract means it has to be replaced with something. Seriously, is the OP suggesting I am not going to vacation?

Let's use a home purchase as a comparison.

Let's say I bought a house last year for $100,000 and it's worth $200,000 today. By the OP's logic, I really paid $200,000 for that house.

My mortgage payment would beg to differ.

Rather, I am fortunate that I was able to purchase my (now) $200,000 house for only $100,000.

The OP is wrong. I did not pay $200,000 for it.

If I sell that house, I need to find another place to live. Based on fair market value, I'm going to pay $200,000 for an equivalent house, potentially the exact house I just sold. If I did what the OP suggested, then I would be paying $200,000 for that house's replacement. Then I would be paying $200,000 for a house that I previously spent $100,000 for.

A DVC membership is similar. If I sell my current inexpensive DVC contract, I will end up replacing it with a much (much) more expensive DVC contract. Like a house, I will pay a realtor's commission to sell my DVC, and I will pay closing costs to buy its replacement. I end up losing by selling at today's price.

The reality is that I am fortunate to be paying a fraction of today's Disney prices to stay at a DVC resort.

Some have used emotion in their argument, but definitely not their whole argument.

 

[Lorana]

It is so strange to me the visceral reaction of some DVC owners who are not selling, yet feel DVC resale is way overvalued.

Apparently DVC is great enough to keep the same equity tied up as a resale buyer does today…but don’t try to say I would buy today as that is just so illogical

It's strange to me that someone who says he wants to have a factual discussion would respond to my factual statements with dismissive false arguments focused on what I have to imagine is his emotional "visceral reaction" to my factual statement that the capital I used to purchase my DVC is not the same thing as the market value of that same DVC today. My investment was only the capital I paid at the time, and the current market value / equity is ultimately irrelevant if I do not wish to sell that asset.

Also, I'm not actually saying I would (or would not) buy in at current prices. What I said only is that you are conflating two things that are not, in fact, the same thing. Just because an asset has appreciated, does not mean one is willing to buy at present prices/invest that capital if they had cash on hand into that product, and an unwillingness to sell at current prices does not necessarily mean one would be willing to invest current capital into the product. For one, there is the value of the DVC beyond just its market value. For another, perhaps I am interested in making a profit on my initial capital invested, and want to wait till prices are either higher. But if that is one's motivation, then they are clearly not motivated to spend today's dollars on the product, because they are looking to increase profit.

The OP is using false logic to make a convoluted argument, yet suggests anyone who disagrees is being emotional:

I’ve been really surprised at the emotional reactions to this.​

The OP continues to ignore that selling a DVC contract means it has to be replaced with something. Seriously, is the OP suggesting I am not going to vacation?

Let's use a home purchase as a comparison.

Let's say I bought a house last year for $100,000 and it's worth $200,000 today. By the OP's logic, I really paid $200,000 for that house.

My mortgage payment would beg to differ.

Rather, I am fortunate that I was able to purchase my (now) $200,000 house for only $100,000.

The OP is wrong. I did not pay $200,000 for it.

If I sell that house, I need to find another place to live. Based on fair market value, I'm going to pay $200,000 for an equivalent house, potentially the exact house I just sold. If I did what the OP suggested, then I would be paying $200,000 for that house's replacement. Then I would be paying $200,000 for a house that I previously spent $100,000 for.

A DVC membership is similar. If I sell my current inexpensive DVC contract, I will end up replacing it with a much (much) more expensive DVC contract. Like a house, I will pay a realtor's commission to sell my DVC, and I will pay closing costs to buy its replacement. I end up losing by selling at today's price.

The reality is that I am fortunate to be paying a fraction of today's Disney prices to stay at a DVC resort.

Thank you. I brought up owning a home earlier in this thread, but you explained this very well by explaining the difference in a mortgage payment on a home bought at $100,000 and now valued at $200,000 versus what one would pay for that asset if purchased at $200,000.

 

[Drewski77]

It's strange to me that someone who says he wants to have a factual discussion would respond to my factual statements with dismissive false arguments focused on what I have to imagine is his emotional "visceral reaction" to my factual statement that the capital I used to purchase my DVC is not the same thing as the market value of that same DVC today. My investment was only the capital I paid at the time, and the current market value / equity is ultimately irrelevant if I do not wish to sell that asset.

Also, I'm not actually saying I would (or would not) buy in at current prices. What I said only is that you are conflating two things that are not, in fact, the same thing. Just because an asset has appreciated, does not mean one is willing to buy at present prices/invest that capital if they had cash on hand into that product, and an unwillingness to sell at current prices does not necessarily mean one would be willing to invest current capital into the product. For one, there is the value of the DVC beyond just its market value. For another, perhaps I am interested in making a profit on my initial capital invested, and want to wait till prices are either higher. But if that is one's motivation, then they are clearly not motivated to spend today's dollars on the product, because they are looking to increase profit.


Thank you. I brought up owning a home earlier in this thread, but you explained this very well by explaining the difference in a mortgage payment on a home bought at $100,000 and now valued at $200,000 versus what one would pay for that asset if purchased at $200,000.

So if my house is worth $200k and I paid $100k, how much equity do I have tied up in my house?

 

[Drewski77]

It's strange to me that someone who says he wants to have a factual discussion would respond to my factual statements with dismissive false arguments focused on what I have to imagine is his emotional "visceral reaction" to my factual statement that the capital I used to purchase my DVC is not the same thing as the market value of that same DVC today. My investment was only the capital I paid at the time, and the current market value / equity is ultimately irrelevant if I do not wish to sell that asset.

Also, I'm not actually saying I would (or would not) buy in at current prices. What I said only is that you are conflating two things that are not, in fact, the same thing. Just because an asset has appreciated, does not mean one is willing to buy at present prices/invest that capital if they had cash on hand into that product, and an unwillingness to sell at current prices does not necessarily mean one would be willing to invest current capital into the product. For one, there is the value of the DVC beyond just its market value. For another, perhaps I am interested in making a profit on my initial capital invested, and want to wait till prices are either higher. But if that is one's motivation, then they are clearly not motivated to spend today's dollars on the product, because they are looking to increase profit.


Thank you. I brought up owning a home earlier in this thread, but you explained this very well by explaining the difference in a mortgage payment on a home bought at $100,000 and now valued at $200,000 versus what one would pay for that asset if purchased at $200,000.

My apologies, your response wasn’t the visceral ones that I was referencing. Again, my apologies for that.

I do disagree with your opinions, but that is just an honest disagreement on something that you disagree with my conclusions.

 

[Nabas]

So if my house is worth $200k and I paid $100k, how much equity do I have tied up in my house?

And if you sell to recover that equity, what are you going to do with that equity?

It's one thing if I need the $100,000 equity to put food on the table. But then I am not replacing same with same, which is what you seem to keep missing.

It's another thing if I simply take that $100,000 and put it into another house.

Either way, I still lose some of that equity. I have to pay realtor fees. I have moving fees. If I buy another house, I have costs associated with a new mortgage.

DVC is the same.

If I sell my DVC because I'm not using it and want to use the money for something else, it's one thing. In this case, I'm going to sell the DVC at any price.

It's completely different if I sell DVC just to buy another DVC.

 

[Drewski77]

And if you sell to recover that equity, what are you going to do with that equity?

It's one thing if I need the $100,000 equity to put food on the table. But then I am not replacing same with same, which is what you seem to keep missing.

It's another thing if I simply take that $100,000 and put it into another house.

Either way, I still lose some of that equity. I have to pay realtor fees. I have moving fees. If I buy another house, I have costs associated with a new mortgage.

DVC is the same.

If I sell my DVC because I'm not using it and want to use the money for something else, it's one thing. In this case, I'm going to sell the DVC at any price.

It's completely different if I sell DVC just to buy another DVC.

The question was: If I bought a house for $100k and it is now worth $200k, how much equity do I have tied up in my house?

While I wasn’t asking you that, you did respond…so can you answer the question?

And you keep referencing $100k in equity, so I am really interested in how you answer my question.

 

[Lorana]

So if my house is worth $200k and I paid $100k, how much equity do I have tied up in my house?

The equity value of the house is $200,000. (How much equity you have in the house is actually dependent on how much of the original loan you've already paid, since equity really is the current value minus current liabilities). The equity "tied up" is $100,000, and I'm going to explicitly point to that word because it's central to my point: "tied up," since the implication is the amount of capital/initial equity that I used to purchase the home and no longer have access to. And, sure, I don't have access to the $200,000 if I don't sell, but I also never had the $200,000 to begin with. My capital investment was $100,000, and the $200,000 equity is "funny money." I'd need to liquidate the asset to realize it, and I'm not going to liquidate the asset because of the other value I gain from it, which is worth more over the asset's life than the $200,000 immediate equity.

Also, your argument was that the equity value was the same as if I had purchased the house for it's current value, which is still not the same thing. I'll just point back above to Nabas's point, rather than just repeat it here. Especially as older DVC contracts are unrestricted, which is a value that no longer exists in current resale contract.

My apologies, your response wasn’t the visceral ones that I was referencing. Again, my apologies for that.

I do disagree with your opinions, but that is just an honest disagreement on something that you disagree with my conclusions.

Apology accepted, though you did reply to / quote my reply. And yes, we clearly disagree on conclusions. I think the difference is that you are trying to equate current equity on an asset that has appreciated over time, with a willingness to purchase at the current market value of that asset because we won't sell it, whereas myself and others are arguing that they are not the same, that the other values of the assets are the reason we keep it. (I'll leave aside the fact that the price per point is not considering all the other monetary value of the asset, such as unrestricted points.)

 

[Bing Showei]

So if my house is worth $200k and I paid $100k, how much equity do I have tied up in my house?

Let's take the hypothetical analogies out of the equation for a moment and look at a reality-based purchase made by someone in 2010.

Say I bought 100 SSR resale points for $45 in 2010 near the nadir of the real estate crash. I use those points every year to vacation with my family. Today in 2021 that contract is valued at $120 on the resale market.

Your position is that if I don't sell that contract for $120/point. I'm essentially buying in at $120/point.

My position is that this is patently false. If I suddenly had $12,000 to buy that resale contract, I would lose all my member benefits. I would lose the ability to book at Riviera. I would lose the ability to book at DLT. I would lose the ability to book at every other resort Disney builds until 2054.

That's what my points are worth to me. Those resale points have a far different valuation than what the market values at them at. I would not buy the crippled SSR resale points on the market today, because the equivalent of what I'm selling is actually 100 direct SSR points presently priced at $180/point.

Now if SSR was fetching $180+ on the resale market that would allow me to replace my points with direct points including closing costs and commission, then yes, keeping my contract is the equivalent of buying in.

But therein lies the fatal flaw in your valuation theory. The premise of this whole thread was:

If you own a DVC contract and you are not selling it...then in a sense you are buying at today’s prices.

Save for VGC which has a very unique supply-limited issue, resale for Disney's timeshare will never fetch direct prices. If they do, people would just buy direct. To hinge your theory that resale will only go up because people aren't selling at today's valuations ignores completely the real-world products that are being bought and sold on the resale market and the disparity between those products, especially when held by those who bought as late as 2018.

You can't seem to get past this academic position you've assumed and instead resort to snark, dismissive posts, insinuations about the absence of logic or how emotions are the primary drivers. Then you wonder why people react to your posts.

 

[Drewski77]

The equity value of the house is $200,000. (How much equity you have in the house is actually dependent on how much of the original loan you've already paid, since equity really is the current value minus current liabilities). The equity "tied up" is $100,000, and I'm going to explicitly point to that word because it's central to my point: "tied up," since the implication is the amount of capital/initial equity that I used to purchase the home and no longer have access to. And, sure, I don't have access to the $200,000 if I don't sell, but I also never had the $200,000 to begin with. My capital investment was $100,000, and the $200,000 equity is "funny money." I'd need to liquidate the asset to realize it, and I'm not going to liquidate the asset because of the other value I gain from it, which is worth more over the asset's life than the $200,000 immediate equity.

Also, your argument was that the equity value was the same as if I had purchased the house for it's current value, which is still not the same thing. I'll just point back above to Nabas's point, rather than just repeat it here. Especially as older DVC contracts are unrestricted, which is a value that no longer exists in current resale contract.


Apology accepted, though you did reply to / quote my reply. And yes, we clearly disagree on conclusions. I think the difference is that you are trying to equate current equity on an asset that has appreciated over time, with a willingness to purchase at the current market value of that asset because we won't sell it, whereas myself and others are arguing that they are not the same, that the other values of the assets are the reason we keep it. (I'll leave aside the fact that the price per point is not considering all the other monetary value of the asset, such as unrestricted points.)

Let me try this again:

My apologies for misquoting you and for my response that didn’t match what you wrote.

Sometimes it can be easier to stop at: Apology accepted.

And while I do believe holding an asset is the same as buying an asset, you do not, and therefore all the other points aren’t needed.

 

[Drewski77]

Let's take the hypothetical analogies out of the equation for a moment and look at a reality-based purchase made by someone in 2010.

Say I bought 100 SSR resale points for $45 in 2010 near the nadir of the real estate crash. I use those points every year to vacation with my family. Today in 2021 that contract is valued at $120 on the resale market.

Your position is that if I don't sell that contract for $120/point. I'm essentially buying in at $120/point.

My position is that this is patently false. If I suddenly had $12,000 to buy that resale contract, I would lose all my member benefits. I would lose the ability to book at Riviera. I would lose the ability to book at DLT. I would lose the ability to book at every other resort Disney builds until 2054.

That's what my points are worth to me. Those resale points have a far different valuation than what the market values at them at. I would not buy the crippled SSR resale points on the market today, because the equivalent of what I'm selling is actually 100 direct SSR points presently priced at $180/point.

Now if SSR was fetching $180+ on the resale market that would allow me to replace my points with direct points including closing costs and commission, then yes, keeping my contract is the equivalent of buying in.

But therein lies the fatal flaw in your valuation theory. The premise of this whole thread was:

Save for VGC which has a very unique supply-limited issue, resale for Disney's timeshare will never fetch direct prices. If they do, people would just buy direct. To hinge your theory that resale will only go up because people aren't selling at today's valuations ignores completely the real-world products that are being bought and sold on the resale market and the disparity between those products, especially when held by those who bought as late as 2018.

You can't seem to get past this academic position you've assumed and instead resort to snark, dismissive posts, insinuations about the absence of logic or how emotions are the primary drivers. Then you wonder why people react to your posts.

For those times I resorted to snark I have apologized, if I did that to you I am sorry about that.

I won’t get into all your points because you’ve argued against many arguments I never made, and I’ve written enough about the points I actually made.

 

[CarolMN]

And while I do believe holding an asset is the same as buying an asset, you do not and therefore all there other points aren’t needed.

And thus we have an excellent place to end the debate.

 

[Drewski77]

And thus we have an excellent place to end the debate.

The best post yet, thank you!

 

[Ssplashhmtn]

I wouldn’t buy back in because 10 years have elapsed and things are different now. I’d take that 60k and run…

So (based on your statement) if It were not for capital gains (and perhaps the 8-9% commissions to the broker to exit), you would presumably sell at these prices. I think that makes the OP’s point, and you are thus not an example of OP’s original comment.

There are many however who both state “I would not buy at these prices”, yet would not sell, and I don’t think cap gains is their reason. It is hard to follow that logic. I think it makes the point that it is easy to complain about high prices, but there’s not a less expensive alternative, not even the rental market.

 

[zavandor]

My guess is if you woke up tomorrow and didn’t have your DVC contracts…but were given the funds to immediately (no hassles) buy back at today’s prices you would…which is the same result as not selling.

Which is a guess, probably true for many, but I can unequivocally tell you, it's not true for me. I would not buy at today prices. And I'm not selling either, reasons already explained earlier in this thread.

 

[DVCanadian]

So (based on your statement) if It were not for capital gains (and perhaps the 8-9% commissions to the broker to exit), you would presumably sell at these prices. I think that makes the OP’s point, and you are thus not an example of OP’s original comment.

There are many however who both state “I would not buy at these prices”, yet would not sell, and I don’t think cap gains is their reason. It is hard to follow that logic. I think it makes the point that it is easy to complain about high prices, but there’s not a less expensive alternative, not even the rental market.

The major factor is that 10 years have elapsed, my kids aren’t 7 and 4, they are 10 years older. I will keep DVC in this situation but I wouldn’t buy it in this situation.

 

[DVCanadian]

One of the weird things about DVC on these and other boards is the focus on cost per point.
This focus can make it seem like all contracts are the same and the only variation is the cost per point.
Obviously there are restrictions now that make contracts different than each other, but the total number of points is something that I think about.

The original 2004 owner of my 270 point SSR contract paid $95 per "annual point" to purchase the rights to use a total of 13,500 points.
In 2010 I paid $50 per "annual point" to purchase the right to use 11,610 points.

Now, if I were to sell the new buyer would pay (I'm guessing) $110 per "annual point" for the right to use 9,180 points.

Hey it's a mostly free market so let them do that. Increasing costs for fewer and fewer points.

 

[Bearval]

The OP is using false logic to make a convoluted argument, yet suggests anyone who disagrees is being emotional:

I’ve been really surprised at the emotional reactions to this.​

The OP continues to ignore that selling a DVC contract means it has to be replaced with something. Seriously, is the OP suggesting I am not going to vacation?

Let's use a home purchase as a comparison.

Let's say I bought a house last year for $100,000 and it's worth $200,000 today. By the OP's logic, I really paid $200,000 for that house.

My mortgage payment would beg to differ.

Rather, I am fortunate that I was able to purchase my (now) $200,000 house for only $100,000.

The OP is wrong. I did not pay $200,000 for it.

If I sell that house, I need to find another place to live. Based on fair market value, I'm going to pay $200,000 for an equivalent house, potentially the exact house I just sold. If I did what the OP suggested, then I would be paying $200,000 for that house's replacement. Then I would be paying $200,000 for a house that I previously spent $100,000 for.

A DVC membership is similar. If I sell my current inexpensive DVC contract, I will end up replacing it with a much (much) more expensive DVC contract. Like a house, I will pay a realtor's commission to sell my DVC, and I will pay closing costs to buy its replacement. I end up losing by selling at today's price.

The reality is that I am fortunate to be paying a fraction of today's Disney prices to stay at a DVC resort.

I couldn't agree with you more, my grandparents bought a lake from lot ~ 30 years ago for 20k non lake front were going for 15k. Today the lake front lots are going for 1.5 million and non lake front for 250k, these prices are with or without a structure on them since most people are tearing down the cabins on them to build a mini mansion on. They have no intention on selling since they really love living there but they also would never buy a lot there at todays prices since they don't have a couple of million lying around.

 

[AvidDisReader]

I couldn't agree with you more, my grandparents bought a lake from lot ~ 30 years ago for 20k non lake front were going for 15k. Today the lake front lots are going for 1.5 million and non lake front for 250k, these prices are with or without a structure on them since most people are tearing down the cabins on them to build a mini mansion on. They have no intention on selling since they really love living there but they also would never buy a lot there at todays prices since they don't have a couple of million lying around.

So this is what so many commenting on value are missing, the human aspect. I own 590 points. I will be retiring next July. Doing the math, my net income will reduce by approx 30%. This means without my DVC points, there is no way I could afford to stay on property. My wife is happiest when we are at WDW, a happy wife is a happy life. When I was reviewing our financial situation, I mentioned we could sell all our points and end up with a net of just over $80K. Her answer was basically--you better have a good divorce lawyer (she was joking, but it made her point). Everyone's situation is different. If I was a business owner who saw my business go belly up due to Covid, it would make perfect sense to sell DVC points to live on until the next chapter of my life was discovered. There is no right answer. In my profession there is one axiom we go by: Figures lie and liars figure.