Poll: Has the 2042 Bubble Burst?

[pkrieger2287]

Working on this month's DVC Resale Average Price blog, and I've noticed a startling trend with some of the 2042 resorts... In fact, Old Key West - Extended average pricing is now trending at or above BoardWalk, Beach Club, Boulder Ridge, Hilton Head, and Vero Beach.

So - Has the 2042 bubble burst with 19 years now left on the contracts? Look forward to everyone's thoughts!

 

[thanxfornoticin]

I think if the last 10-15 years have taught us anything, especially several years of the pandemic, you can't make long-term assumptions based on the short-term numbers. At some point, the resale for the 'shorter' leases will be impacted. But with nearly 40% of the years/points still available at some extremely popular locations, I'm not seeing any bursting of anything - yet.

Then again, maybe!!

 

[sethschroeder]

Could you say that OKW Extended is overpriced? Maybe thats the question to ask.

Also not seeing it here:
https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-september-2023/

I am showing BWV still above OKW Extended.

Sounds like whatever you are looking at is that OKW Extended is simply overpriced and possibly not selling?

 

[pkrieger2287]

Could you say that OKW Extended is overpriced? Maybe thats the question to ask.

Also not seeing it here:
https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-september-2023/

I am showing BWV still above OKW Extended.

Sounds like whatever you are looking at is that OKW Extended is simply overpriced and possibly not selling?

I'm currently writing the October 2023 report - OKWE has jumped to $126pp and Beach Club down to $127pp.

 

[wilkydelts]

Could you say that OKW Extended is overpriced? Maybe thats the question to ask.

Also not seeing it here:
https://www.dvcresalemarket.com/blog/dvc-resale-average-sales-prices-for-september-2023/

I am showing BWV still above OKW Extended.

Sounds like whatever you are looking at is that OKW Extended is simply overpriced and possibly not selling?

Did you just cross check @pkrieger2287 with his own work, that's a bold strategy Cotton

 

[skier_pete]

So my opinion is "No", and I doubt it will every be an immediate burst.

If you think about where these resorts SHOULD be priced, it should sort of be based on the sales of resorts that are near 50 years. A great place to make this comparison is with Copper Creek and Boulder Ridge.

Copper Creek runs in the $150 average price while Boulder Ridge is running in the high nineties, lets call it $95 per point.

If we consider Copper Creek with 45 years left and Boulder Ridge with 19, all else being equal you are paying $3.33 / point / year for Copper Creek and $5 / point / year at Boulder Ridge.

Boardwalk is similarly going at $115 a point and Beach Club around $140 a point versus say BLT at $160 per point. That puts Beach Club at $7.27 / point / year and Boardwalk at $6.05 / point / year vs BLT at $4.32 / point / year.

Even OKW 2042, while running at some of it's lowest price in years, seems to still be around $90 / point, or $4.73 per point. That's comparable to direct pricing of Riviera, which at $217 is $4.62 per point.

So while these prices have settled down a bit, they are still inflated against what the market SHOULD be.

I look at the less favored resorts should be running around $3.50 / point / year remaining, while more favored resort are around $5.00 / point / year remaining. IMO Beach Club and Boardwalk should really be priced around $100 per point, while OKW and Boulder Ridge should be closer to $70 per point IMO. So I don't think we have yet reached a point where the bubble burst.

I would really expect we will see a steep drop in prices for these resorts in the next 10 years, but it wouldn't surprise me if they stay inflated due to people wanting bargains. In all honestly, I've been saying for a while, if my Boardwalk contract is still worth near $100 a point with 10 years to go, I will sell it and take the cash and buy at a longer lasting resort. (I paid $105 / point in 2017.) By 2032 these resorts SHOULD be selling for $60-70 per point.

 

[sethschroeder]

I'm currently writing the October 2023 report - OKWE has jumped to $126pp and Beach Club down to $127pp.

I would guess limited data set causing an incorrect final assumption. How many OKWE vs BCV contracts were sold in October vs September vs August?

I deal with sales data on a regular basis and analyzing it so it would be hard without access to the underlying dataset to see if this was something that is an actual shift in buyer requirement or something else.

What is BWV as an example? If BWV is still in the $125ish area then it seemingly points to a weird outlier with OKWE because of possibly low volume of sales?

 

[sethschroeder]

Did you just cross check @pkrieger2287 with his own work, that's a bold strategy Cotton

Well since the new information is not posted....

The information that is posted is specifically stating that it was NOT the case.

So yes I am going to call out the easiest location to grab the information even though its a limited data set.

The larger dataset I have with ALL sales for DVC at WDW is only updated through July so not useful yet for a October shift of the market as a whole. Which also includes buyback information to see if Disney possibly shifted the buyback price higher on OKW causing a shift in resale price even.


Edit: Adding that I dont pay attention to who is posting so didn't even put 2 and 2 together and no clue what the various blogs and things are called I just know the bookmark to go to or the google search to find it.

 

[pkrieger2287]

All great points! - I think we'd get an even different perspective if you polled first-time buyers and those just now considering DVC. We're a unique set of highly analytical and educated Members here.

I wonder if despite all the data crunching, this is what we see drive the market. Saying "twenty" or "twenty or more" years has a different ring than 19 and as we move into a younger generation of buyers I wonder if what we think should be the driving motivators (the data) doesn't matter to the consumer as much?

 

[HIRyeDVC]

I don't think so, at least not yet for BWV and BCV. Those selling in the $120's are not that far off from say BLT which has 18 more years. I'm even seeing CCV sell in the $130s, which has 26 more years than BCV. I'd say wait until they have less than 10 years left until people stop wanting to buy them.

 

[sethschroeder]

Saying "twenty" or "twenty or more" years has a different ring than 19

That didn't change in October though did it? So the messaging wouldn't change until like January or February would it?

 

[sethschroeder]

Here is something to think about. Is Riviera driving down the price of BCV/BWV?

So the diehard Epcot buyers historically only had those two options. Now with more Riviera contracts on the resale market and BCV/BWV crossing into the "less than 20 years" area you have people comparing the options?

That would be something a resale agent would have to comment on what they hear from buyers.

 

[Flash_Sloth]

2041 is the last year that the "2042" resorts get points. There are some contracts listed for sale that include 2023 points and would have 19 years remaining, but most of them have 2024 points and only 18 years remaining. That's still a lot of time, but a lot less than others that have 40+ years remaining.

I'm generally of the opinion that the 2042 resorts are overpriced. When I was in the market to buy, I created a big spreadsheet calculating $/lifetime_points, how far each point gets you with respect a night in a room in the home resort, annual dues, etc. The raw numbers didn't look very good for the 2042 resorts.

But that doesn't address how nice and/or convenient it is to stay at BWV or Beach Club. How do you put a pricetag on walking to Epcot for Food&Wine, etc?

 

[RichVIII]

I would put 2042 contracts in two buckets - on-site and off-site. Comparing them is only relative in terms of how much time is left. For resorts such as BCV and BWV - I have to imagine that most are purchasing to use nearly exclusively at them (almost acting as restricted points). There isn't a week that goes by that someone says they can't make the math work while others take the plunge since that is where they want to stay. I do, have to imagine as we approach 10-15 years, it will get harder to make any math work unless you really want to stay there.

 

[DVC4]

This is an interesting convo, never considered!

 

[cbailey1616]

I'd rather have 20 years of Beach Club than 40 years of Old Key West

 

[tom1944]

So my opinion is "No", and I doubt it will every be an immediate burst.

If you think about where these resorts SHOULD be priced, it should sort of be based on the sales of resorts that are near 50 years. A great place to make this comparison is with Copper Creek and Boulder Ridge.

Copper Creek runs in the $150 average price while Boulder Ridge is running in the high nineties, lets call it $95 per point.

If we consider Copper Creek with 45 years left and Boulder Ridge with 19, all else being equal you are paying $3.33 / point / year for Copper Creek and $5 / point / year at Boulder Ridge.

Boardwalk is similarly going at $115 a point and Beach Club around $140 a point versus say BLT at $160 per point. That puts Beach Club at $7.27 / point / year and Boardwalk at $6.05 / point / year vs BLT at $4.32 / point / year.

Even OKW 2042, while running at some of it's lowest price in years, seems to still be around $90 / point, or $4.73 per point. That's comparable to direct pricing of Riviera, which at $217 is $4.62 per point.

So while these prices have settled down a bit, they are still inflated against what the market SHOULD be.

I look at the less favored resorts should be running around $3.50 / point / year remaining, while more favored resort are around $5.00 / point / year remaining. IMO Beach Club and Boardwalk should really be priced around $100 per point, while OKW and Boulder Ridge should be closer to $70 per point IMO. So I don't think we have yet reached a point where the bubble burst.

I would really expect we will see a steep drop in prices for these resorts in the next 10 years, but it wouldn't surprise me if they stay inflated due to people wanting bargains. In all honestly, I've been saying for a while, if my Boardwalk contract is still worth near $100 a point with 10 years to go, I will sell it and take the cash and buy at a longer lasting resort. (I paid $105 / point in 2017.) By 2032 these resorts SHOULD be selling for $60-70 per point.

I believe CCV is tracking more in the $130's now. I have been checking the recorded deeds. 2 175-point contracts were recorded today at $128 and $135 per point.

 

[HIRyeDVC]

I believe CCV is tracking more in the $130's now. I have been checking the recorded deeds. 2 175-point contracts were recorded today at $128 and $135 per point.

I agree. The burst hasn't happened to BCV and BWV. I think its popped for CCV and BLT, two resorts I own . I'm hoping a refurb will help at BLT, but not so sure since there are, and will be, so many DVC options on the monorail loop.

 

[JulieBeeRN]

that's a bold strategy Cotton

Nothing to add except love the Dodgeball reference.

 

[Sandisw]

I think it’s popped in the sense that I don’t see things going back up, even if the economy does. I think we will now see a slow decline in these resorts over the next 10 years and then see it drop faster after that.