Do you think minimum direct points required will ever go down?

[Ruttangel]

Minimum still 150 but interesting to see that offers at VGF start at 175 for new members.

 

[Sandisw]

Minimum still 150 but interesting to see that offers at VGF start at 175 for new members.

Did they do the same for RIV? Or leave incentives at 150?

 

[hglenn]

Did they do the same for RIV? Or leave incentives at 150?

RIV is still 150

 

[Ruttangel]

Did they do the same for RIV? Or leave incentives at 150?

https://dvcexplorer.com/fin/nm/Riviera_Member_DeveloperCredit_CashOnly.pdf

 

[Sandisw]

https://dvcexplorer.com/fin/nm/Riviera_Member_DeveloperCredit_CashOnly.pdf

Thanks…these are member though…I was wondering if new members started at 150 still for discount….someone answered they do.

But, no new incentives were offered for the three resorts that just went to $200…but does look like something small still there for BLT and Poly.

 

[hhisc16]

Thanks…these are member though…I was wondering if new members started at 150 still for discount….someone answered they do.

But, no new incentives were offered for the three resorts that just went to $200…but does look like something small still there for BLT and Poly.

No fire sales for this go around?

 

[Ruttangel]

Thanks…these are member though…I was wondering if new members started at 150 still for discount….someone answered they do.

But, no new incentives were offered for the three resorts that just went to $200…but does look like something small still there for BLT and Poly.

https://dvcexplorer.com/fin/n/Riviera_Prospect_DeveloperCredit_CashOnly.pdf here you go

 

[Ruttangel]

No fire sales for this go around?

Can't see any atm

 

[Sandisw]

No fire sales for this go around?

Nope…and IMO, you won’t see them for a bit until they see if they need them now that nee buyers have VGF as a choice.

 

[tiana1989]

The other interesting question with the increasing buy-in mimimim (and really, the increasing point charts since that effectively imposes a minimum on what you need to stay) is how this affects the financing decision. I even think financing a new car purchase isn’t quite the same because generally speaking, the interest rate on the 30k vehicle is going to be less than the interest rate on 30k for DVC (around 10% is the norm, right)? But still, based on prior posts, a lot of people finance DVC and Disney certainly encourages that with their “for only X dollars a month!” That works great on the impulse buyers, but for the Uber researchers who come to Boards like this before purchasing, the conventional wisdom is always to pay in cash (or credit you can pay off before interest hits) because the interest will wipe out the savings. I’ve always personally agreed that paying in full is better than financing, at least for me. But with how quickly the buy-in minimum has increased the last couple years, is there a point where if it’s going to take a family a few years to save up what they need, there’s a risk that the minimum will go up so that they have to spend even more to cover the new minimum? At $200 per point (also likely to continue increasing), another 50 points tacked onto the minimum is $10k! It seems like it at least has to be part of the calculation. And if neither of those are an appealing option, I agree with OP that it’ll just start pushing people to buy resale.

 

[AnnaKristoff2013]

I would classify it as "low risk" strictly from the standpoint that there is a narrow period of time during which one would typically find that the resale value of their contract is less than the mortgage. We have 30+ years of DVC history to support the idea that resale values continue to climb. And as that's happening, the balance on the mortgage is declining.

It’s really not low risk. The resale market absolutely could crash, for a number of reasons. Heck, look at what happened during Covid. The resale market crashed then, it just recovered. The resale market right now is historically high, too high in my opinion. The next economic downturn could easily devastate both Disney and DVC, especially given the manner in which the parks are currently being run.

 

[tjkraz]

It’s really not low risk. The resale market absolutely could crash, for a number of reasons. Heck, look at what happened during Covid. The resale market crashed then, it just recovered. The resale market right now is historically high, too high in my opinion. The next economic downturn could easily devastate both Disney and DVC, especially given the manner in which the parks are currently being run.

Pricing data from DVC Resale Market doesn’t support the idea that the resale market “crashed” during Covid. Some resorts—not all–experienced an understandable dip in April and May 2020, but prices recovered quickly and continued to rise.

https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-january-2021/

Nothing is without risk. Even though we’re discussing DVC in terms similar to an investment, it shouldn’t be viewed as a traditional investment. The only guarantee is ability to stay in DVC resorts year-after-year, which should be the reason to buy. However we have 30 years of resale pricing history showing that DVC values continue to climb. That increase has provided a nice safety net for buyers.

There are subtleties to consider. I personally wouldn’t buy into one of the ‘42 resorts. That value is certain to decline…eventually. Poly future value is uncertain until we know more about the expansion. But overall the current volume of resale listings is consistent with other periods and people are paying retail for VGF at record price and (potentially) record pace.

If you’re looking to pre-pay for Disney vacations, there are few better options available. Putting similar funds in a traditional investment vehicle will certainly leave it open to economic fluctuations.

 

[BrianLo]

I think the minimum for a new member to buy direct at DLT might be less than 150, but I do not think the total required to qualify for Membership Extras will ever go below 150. That is more likely to increase, IMO.

Yes, I think this is the best argument for why 150 is the highest they can take it for a while. I think the desirable pitch for DLT is going to be a 4-5 night stay for those within driving distances.

This is probably best for the longterm health of the resort (all new membership will essentially have enough points for an annual stay in a 1-bedroom), otherwise those tower rooms would be insanely competitive.

 

[Robbie Cottam]

A decade ago during the lending crisis, the Orlando Sentinel reported that 75% of all DVC purchases were financed. This is nothing resembling "investment advice" but DVC is a rather low risk purchase since resale values keep increasing. The greatest risk comes in the first 2-3 years where the seller may not recoup what they still owe on the mortgage.

Interest adds cost to the purchase. But the question some buyers must ponder is whether it makes more sense to buy DVC + some amount of interest vs continuing to pay for cash vacations while saving to pay in full. If someone forecasts a full 10 years to pay off the mortgage, obviously there are danger signs. But in reality it's a sliding scale where every buyer must find their personal comfort level.

Disney is the finance company on the direct purchases. With a minimum of 10 a percent down. The most Disney would ever “lose” Is two years worth of points. But your down payment was for 5 years. It is a no brainer.

I think the secondary lenders go to about 75 or 80 LtV ….

Still no chance that they are ever upside down…. And at 11 percent and 750 “processing fee”. It is easy safe money.

On the other side of the coin if you included finance charges you still save money buying and financing DVC over rack rate…. And you can or could right off the interest …. So there is that

 

[Paul Stupin]

It’s really not low risk. The resale market absolutely could crash, for a number of reasons. Heck, look at what happened during Covid. The resale market crashed then, it just recovered. The resale market right now is historically high, too high in my opinion. The next economic downturn could easily devastate both Disney and DVC, especially given the manner in which the parks are currently being run.

Of course there’s always risk, but the economic downturn in the first half of 2020 was of historic proportions, yet as you acknowledged both DVC and Disney survived. There’s way more precedent of the product’s resilience than the apocalyptic scenario you describe.

 

[Red Dog Run]

I THINK, but obviously can't say for certain, that most Direct buyers have absolutely no idea what the resale market looks like or even that it exists.

I agree. I had no idea about the resale market. One day I looked up renting points after a colleague stated she did this. While looking at David's Rental, I came across ads for dvc. This was the first time I ever heard of the resale market. Now I have 7 resale and 3 direct. All were acquired between July 2020 through the present. I see no reason why Disney would lower the points for the blue card. Besides, I bought direct points only after knowing about resale. No resale=no direct sales. That's in my mind. I can unload and still get a nice chuck back.

 

[Red Dog Run]

Pricing data from DVC Resale Market doesn’t support the idea that the resale market “crashed” during Covid. Some resorts—not all–experienced an understandable dip in April and May 2020, but prices recovered quickly and continued to rise.

https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-january-2021/

Nothing is without risk. Even though we’re discussing DVC in terms similar to an investment, it shouldn’t be viewed as a traditional investment. The only guarantee is ability to stay in DVC resorts year-after-year, which should be the reason to buy. However we have 30 years of resale pricing history showing that DVC values continue to climb. That increase has provided a nice safety net for buyers.

There are subtleties to consider. I personally wouldn’t buy into one of the ‘42 resorts. That value is certain to decline…eventually. Poly future value is uncertain until we know more about the expansion. But overall the current volume of resale listings is consistent with other periods and people are paying retail for VGF at record price and (potentially) record pace.

If you’re looking to pre-pay for Disney vacations, there are few better options available. Putting similar funds in a traditional investment vehicle will certainly leave it open to economic fluctuations.

I actually bought my first two resales at OKW for the '42 mark. It was something that I thought would be cheap (got them during the covid shutdown) and could be gone without any worry. As they get near the end, the contract will decline and expire, but the stays and the rentals will not until the end. At my age, 55, it suited me. BUT, I understand that if I were younger, I would not have viewed this in the same way.