Will the new direct point minimum for benefits affect resales?

[poohbear6]

Just wondering if anyone out there thinks the new resale changes will affect the market? I have 8 resale contracts, half purchased before 2011. I remember back in 2011, the resale market took a nose dive the month after the initial changes, however, the 2016 changes which were more significant did not really affect teh market or at least it did not affect the prices. Will these new changes affect the market, or was 2011 more reflective of the times - the recession, than the changes

 

[The Jackal]

I don’t see them going down too much. Especially because of the expansion Disney is doing now. Toy Story Land, Star Wars etc.

 

[Jelly563]

With a number of people buying 25pt contracts, I can see the market flooded with them in a few years. If there are a surplus of 25pt contacts avail for sale, The sellers will be competing with each other to dump their contract and I can see them reducing their asking prices. Now because they are rare, they are sold at a premium but I feel they will soon become rather steady.

 

[thelionqueen]

With a number of people buying 25pt contracts, I can see the market flooded with them in a few years. If there are a surplus of 25pt contacts avail for sale, The sellers will be competing with each other to dump their contract and I can see them reducing their asking prices. Now because they are rare, they are sold at a premium but I feel they will soon become rather steady.

I agree with this. Also the high closing costs make it less attractive. My 240 point contract had the same fees as a 40 point contract. I was able to deal the fees down a bit, but you get the idea. I think I remember my original BLT & GCV contracts had no closing fees or very minimal which is why we broke it into smaller contracts

 

[deedubb]

Smaller contracts usually demand a premium. With the price of direct contracts going up, I think resale prices will remain strong. Some people just cannot afford to buy 75 or more direct and resale will remain their only option if they want into DVC.

 

[supersnoop]

With a number of people buying 25pt contracts, I can see the market flooded with them in a few years. If there are a surplus of 25pt contacts avail for sale, The sellers will be competing with each other to dump their contract and I can see them reducing their asking prices. Now because they are rare, they are sold at a premium but I feel they will soon become rather steady.

I disagree. With the current benefits, there’s a lot of reasons to purchase a 25 point contract direct, which makes me think they’ve already been affected by lower demand. With the increased requirement, I suspect the small contracts will increase in price and demand in the resale market from here on out. There’s no longer as much of an incentive to purchase one direct.

 

[Dean1953]

If that 25 point contract is the only reason a person is receiving DVC benefits, it will be the last contract that a person will sell. If benefits vanish, then their value may go down.

 

[Matty B13]

I disagree. With the current benefits, there’s a lot of reasons to purchase a 25 point contract direct, which makes me think they’ve already been affected by lower demand. With the increased requirement, I suspect the small contracts will increase in price and demand in the resale market from here on out. There’s no longer as much of an incentive to purchase one direct.

But why would you bother buying a small resale contract with high closing costs, when a direct contract would only cost a little bit more with no hassles or ROFR.

 

[thelionqueen]

But why would you bother buying a small resale contract with high closing costs, when a direct contract would only cost a little bit more with no hassles or ROFR.

Agree!

 

[JETSDAD]

But why would you bother buying a small resale contract with high closing costs, when a direct contract would only cost a little bit more with no hassles or ROFR.

With the increasing minimums to buy in there will be more people looking to the resale market for small contracts (new members). With the loss of the advantage of adding on 25 pts direct for benefits less existing owners will buy such small contracts. This means greater demand and less supply.

 

[thelionqueen]

With the increasing minimums to buy in there will be more people looking to the resale market for small contracts (new members). With the loss of the advantage of adding on 25 pts direct for benefits less existing owners will buy such small contracts. This means greater demand and less supply.

Why would New members want 25 points with no perks? Maybe if banking and borrowing could stay a few nights every 3 years. I don’t understand the logic here.

 

[Matty B13]

I think we are going to see fewer and fewer 25 point contracts both direct and resale, but I also think that the demand is going to drop as well.

 

[JETSDAD]

Why would New members want 25 points with no perks? Maybe if banking and borrowing could stay a few nights every 3 years. I don’t understand the logic here.

Some people can't afford larger contracts but want to be members and use the points every other year or every 3 years. They can't buy the small contracts direct so get in by buying them resale. At AKV 60 points can get a value studio for a week in low seasons (starting 2019). Others could do a couple long weekends each year or every other year.

 

[Matty B13]

Some people can't afford larger contracts but want to be members and use the points every other year or every 3 years. They can't buy the small contracts direct so get in by buying them resale. At AKV 60 points can get a value studio for a week in low seasons (starting 2019). Others could do a couple long weekends each year or every other year.

If only buying for value studios or just studios, every other year, why buy at all? Better off just paying cash and not being on the hook for maintenance fees for 25+ years. The savings wouldn’t be big enough to justify the initial cost up front.

 

[JETSDAD]

If only buying for value studios or just studios, every other year, why buy at all? Better off just paying cash and not being on the hook for maintenance fees for 25+ years. The savings wouldn’t be big enough to justify the initial cost up front.

It's the same value as anyone else buying. Points are going to have the same value, just with a bit more cost per point to start than the average resale (similar to direct). They'd only be looking at about $170/year in dues and could get them 3 nights/year.

 

[supersnoop]

But why would you bother buying a small resale contract with high closing costs, when a direct contract would only cost a little bit more with no hassles or ROFR.

Maybe they want to add on to an existing contract and save $2,000. That’s more than “a little bit” to most people.

 

[Ben E N]

Maybe they want to add on to an existing contract and save $2,000. That’s more than “a little bit” to most people.

When dealing with small contracts, the difference between resale and direct is nowhere near $2000. If that was the case, of course everyone would be jumping on the savings. The actual difference is closer to $150.

 

[Wakey]

Small resale contracts (no benefits since 2016) have always commanded a hefty premium. Nothing has changed in terms of benefits, so price won't go down.
Many people before needing an extra 25 or 50 points thought what the hell, it's only a bit more to buy from Disney and I then get the benefits. I was one of those people.
Now that person will not do that, they'll just buy the resale.
You'll always have people wanting to buy into DVC fresh who can only afford a tiny contract, perhaps for a weekend away every year. DVD cannot sell them a 25 pointer, so that's why they command a premium.

 

[thelionqueen]

It's the same value as anyone else buying. Points are going to have the same value, just with a bit more cost per point to start than the average resale (similar to direct). They'd only be looking at about $170/year in dues and could get them 3 nights/year.

Yes but you haven’t figured the init Al buy in to get the points. Since dues end up costing more than the per point buy in it doesn’t make sense to me. However I think smaller contracts will still be desirable and higher priced but will be drastically diminished after 2/25 and whatever else Disney had planned before and after riviera goes up for sale.

 

[JETSDAD]

Yes but you haven’t figured the init Al buy in to get the points. Since dues end up costing more than the per point buy in it doesn’t make sense to me. However I think smaller contracts will still be desirable and higher priced but will be drastically diminished after 2/25 and whatever else Disney had planned before and after riviera goes up for sale.

Yes, but that buy in occurs for every DVC member. Those small resale contracts are about equivalent to buying direct, but non-members can't buy those contracts direct.
Why are those contracts at a premium right now? There's already no benefits associated with them. 2/25 makes no difference to those contracts. The people buying them either buy as their only way in or to get a contract that Disney is not willing/able to fill (closed or long waitlists). That doesn't change with the new rule. In fact, with the increased minimum to buying in, more people will look to the resale market for small contracts and with the increasing prices the resale market will continue to increase in price as well.