Disney Vacation Club Sales

[lopo]

Greetings! While I am not presently in the market to add to my DVC points, generally, I keep up with the available listings on several of the resale sites. Frankly, I have been surprised that there have been so many stripped contracts for sale with high prices attached. Several contracts have no current use year or next year points available. I was thinking that some sellers may be looking to sell at top dollar now since direct sales are not available.

 

[bnoble]

I don't think it has much to do with the suspension of direct sales. Most direct sales are to under-informed customers, and the resale market tends to be more informed.

Speculation on DISboards is that most of those are from a relatively small number of sellers who had been active in the rental business. If I am a landlord (rather than just using it for myself) there is every incentive to borrow as much as I can to rent out. I don't pay MFs until (just before) the UY starts, but I can realize the rental income on those points almost two years earlier--reserving 11 months before the start of the UY prior. Heck, I might even have a habit of acquiring loaded contracts and selling stripped ones, because relative to rental rates the market undervalues the former and overvalues the latter.

Furthermore, if I were one of those people, I'd be thinking hard about liquidating everything I have. It is likely that the world is going to look very different for several years due both to the way the pandemic is going to change travel experiences and the underlying economic impact of it all. That results in reduced travel demand generally, and might even mean reduced demand for theme park experiences specifically. On the other hand, right now many people are still of a mindset that things will return to "normal" quickly, so some of these long term changes haven't been priced into the market yet. It will take a while for folks to really come to grips with how different things will be and how long that will last.

So, if I have a nice little DVC rental business, I would be thinking hard about liquidating my (stripped) contracts right now, before the market drops any farther than it already has. What's more, I might be able to "set" market expectations a little bit. If you look closely, a lot of those contracts have a fairly regular pricing structure to them, depending on resort and UY---sort of like the way an apartment prices your monthly rent based on how close to the availability date you start the lease. That suggests they are all coming from one (or maybe a few) seller(s). If you look more closely still, you see a lot of contracts that are identical to one another across several of the brokers. So, there might only be a small number of sellers behind the list prices of a fair number of contracts.