Inventory This High?

[sethschroeder]

in times of economic downturns

Like now then?

 

[sethschroeder]

With Disney actually moving forward with layoffs I suspect they have a freeze on DVC buying back contracts in large unless there was a waitlist possibly.

Didn't really pay that close of attention before but this seems somewhat likely based on what I heard other companies are doing out there.

 

[KAT4DISNEY]

With Disney actually moving forward with layoffs I suspect they have a freeze on DVC buying back contracts in large unless there was a waitlist possibly.

Didn't really pay that close of attention before but this seems somewhat likely based on what I heard other companies are doing out there.

Which if true disputes the claim that DVC is a long term thinker. Low resale will pull off a fair number of buyers that otherwise would have purchased direct. Add on the restrictions that have thrown off a few direct buyers on RIV and perhaps upcoming and it's rather short sighted and only basis if for stock price, not DVC health.

 

[Epcot Forever Forever]

Low resale will pull off a fair number of buyers that otherwise would have purchased direct.

Maybe. How many people would be persuaded by a $18,000 difference but not a $14,000 one? Once you ignore all the people who don’t know about resale and the people who do but would never buy used, I’m betting it’s a very small number.

 

[KAT4DISNEY]

Maybe. How many people would be persuaded by a $18,000 difference but not a $14,000 one? Once you ignore all the people who don’t know about resale and the people who do but would never buy used, I’m betting it’s a very small number.

In the grand scheme, yes, low since most buyers still are picked up from recent park visits and have done little or no research on the timeshare. But no matter. Once lost that opportunity is gone.

 

[HIRyeDVC]

Like now then?

not necessarily. Unemployment is lowest in history with wages highest in history. Yes, there are some concerning indicators, like high inflation, high interest rates and the failure of 2 banks. But most people have jobs. It's hard to predict a recession when most people are getting paid.

 

[CLE2WDW]

not necessarily. Unemployment is lowest in history with wages highest in history. Yes, there are some concerning indicators, like high inflation, high interest rates and the failure of 2 banks. But most people have jobs. It's hard to predict a recession when most people are getting paid.

I prefer to look at labor force participation which is still below COVID levels. Then factor in inflation and potential for further bank failures and I think we can call it an economic downturn.

That being said I wouldn’t be surprised if DVC begins to slow play the opening of Poly 2. I doubt Disney wants to try to sell more new contracts in an economy that is already soft. I’ll say it again … if you’re in the market for secondary DVC continue to wait because the market will continue to soften.

 

[sethschroeder]

Which if true disputes the claim that DVC is a long term thinker.

Not really because while DVC can have a plan Disney may cut budgets and additional expenditures temporarily to avoid additional layoffs due to cashflows reductions they see from the current economic climate outlook.

not necessarily. Unemployment is lowest in history with wages highest in history. Yes, there are some concerning indicators, like high inflation, high interest rates and the failure of 2 banks. But most people have jobs. It's hard to predict a recession when most people are getting paid.

Employment rates in large are driven by people who are low income and would never be able to stay DVC on rental let alone purchase. We also were at "historical low unemployment" in 2007 as well.

Its easy to predict it honestly from my view. When businesses are mostly all cutting budgets and doing layoffs there is a common denominator and its the direction of the economy.

There is a lag between those who pick up on it early and those who learn about it later though. We in that middle section right now with businesses cutting back. Below is a chart from FRED regarding Fed Fund rates since 2000 which reinforces a reduction in investment and aggressive growth plans for many companies.

 

[HIRyeDVC]

Employment rates in large are driven by people who are low income and would never be able to stay DVC on rental let alone purchase. We also were at "historical low unemployment" in 2007 as well.

Its easy to predict it honestly from my view. When businesses are mostly all cutting budgets and doing layoffs there is a common denominator and its the direction of the economy.

There is a lag between those who pick up on it early and those who learn about it later though. We in that middle section right now with businesses cutting back. Below is a chart from FRED regarding Fed Fund rates since 2000 which reinforces a reduction in investment and aggressive growth plans for many companies.

View attachment 749178

I have no rebuttal. I am not a financial analyst, nor am I a trained economist. I can buy all that you're saying. Everything is expensive and people and families are struggling. Maybe I'm in the wrong circles. But I don't personally see anyone struggling too much. Most people I know are buying expensive cars, going on expensive vacations, and renovating their culdesac suburban houses. It's as if there is no economic turmoil.

 

[Epcot Forever Forever]

I have no rebuttal. I am not a financial analyst, nor am I a trained economist. I can buy all that you're saying. Everything is expensive and people and families are struggling. Maybe I'm in the wrong circles. But I don't personally see anyone struggling too much. Most people I know are buying expensive cars, going on expensive vacations, and renovating their culdesac suburban houses. It's as if there is no economic turmoil.

There’s been a weird dynamic the last 36 months where the economy has overall been going fine but most of the gains have gone to the bottom half of the income distribution, first via checks from the government and later via organic wage hikes. So someone making $200K (prime DVC customer) is less likely to be better off than at the beginning of the pandemic than someone making $45K (most people, and therefore the people who drive most economic data). So I think it can be true that the economy is fine overall and also the economy is negatively impacting DVC sales.

 

[HIRyeDVC]

There’s been a weird dynamic the last 36 months where the economy has overall been going fine but most of the gains have gone to the bottom half of the income distribution, first via checks from the government and later via organic wage hikes. So someone making $200K (prime DVC customer) is less likely to be better off than at the beginning of the pandemic than someone making $45K (most people, and therefore the people who drive most economic data). So I think it can be true that the economy is fine overall and also the economy is negatively impacting DVC sales.

View attachment 749184

The next time someone shows a graph at me, I might bash my head in to my monitor! hehe, j/k. I'm really confused by your statement "someone making $200K (prime DVC customer) is less likely to be better off than at the beginning of the pandemic than someone making $45K". To me, that sounds COMPLETELY illogical and counter intuitive. Or is this some wisdom from the great scholar, Notorious B.I.G.? Mo' money mo' problems?

 

[lovethesun12]

The next time someone shows a graph at me, I might bash my head in to my monitor! hehe, j/k. I'm really confused by your statement "someone making $200K (prime DVC customer) is less likely to be better off than at the beginning of the pandemic than someone making $45K". To me, that sounds COMPLETELY illogical and counter intuitive. Or is this some wisdom from the great scholar, Notorious B.I.G.? Mo' money mo' problems?

That comment makes sense to me. Someone who makes 200k is not rich. They likely still have a mortgage, vehicle payments, heat bill, etc. Probably a larger mortgage and larger vehicle payment than most.

If they have a family, own DVC, and enjoy trips, they are now looking at spending thousands more in dining, flights, rentals, etc due to inflation. That in addition to how much extra everything costs locally. Most reprieve from inflation offered by governments didn't affect this group at all.

So the person who is use to dropping maybe 10k on a vacation may not be as inclined to drop 15k when in addition to the extra vacation expenses all their other expenses (gas, groceries, etc) have gone up substantially as well. They may decide with all the extra expenses to cut out more frivolous spending.

 

[Epcot Forever Forever]

The next time someone shows a graph at me, I might bash my head in to my monitor! hehe, j/k. I'm really confused by your statement "someone making $200K (prime DVC customer) is less likely to be better off than at the beginning of the pandemic than someone making $45K". To me, that sounds COMPLETELY illogical and counter intuitive. Or is this some wisdom from the great scholar, Notorious B.I.G.? Mo' money mo' problems?

Their situation has improved by a lesser extent. In absolute, obviously, they’re much better off.

 

[CVG]

Resale stock down below 2300 now, so it does look as if the folks who needed to sell have done so and the ones less willing to negotiate are left.

 

[sethschroeder]

Resale stock down below 2300 now, so it does look as if the folks who needed to sell have done so and the ones less willing to negotiate are left.

More people just holding and waiting to see if prices come up before listing as well could be on the flip side.

 

[dcibrando]

I think we are seeing a large number of resales due to many different reasons... but alot of it has to do with the changes disney has made over the years as well as no longer selling of annual passes (unless you keep renewing one). That is a major slap in the face to some of the most loyal Disney fans.... DVC members imo

I for one have multiple contracts and am considering selling one and no longer going as often as I once did (maybe ever 2 years now or so) because of all the changes.

 

[E2ME2]

I think we are seeing a large number of resales due to many different reasons... but alot of it has to do with the changes disney has made over the years as well as no longer selling of annual passes (unless you keep renewing one). That is a major slap in the face to some of the most loyal Disney fans.... DVC members imo

I for one have multiple contracts and am considering selling one and no longer going as often as I once did (maybe ever 2 years now or so) because of all the changes.

I understand your sentiment, and wouldn't blame you for selling a contract....
(would that happen to be a BCV contract with a June Use Year??? - wink, wink)

 

[Cfabar1]

My thoughts:

High resale motivates me to look direct. If an owner isn’t giving me at least 25-30 percent savings from direct at actively selling resorts prices (since I am looking at VGF) it isn’t worth it to me given restrictions, etc.

I’m not paying $190 VGF points, I’ll go direct. Now that I’m an existing owner and in the market, it has to be $150s or lower for me to even entertain it. Direct has so many advantages, the only disadvantage is cost, but given the uncertainty after 2042 and other reasons, I do place a premium on direct points.

Additionally, I think there are fewer contracts because people are learning this item doesn’t have as much “value” in sale it did before. It might motivate owners to hold onto it longer and hope the market changes or realize theyre better off holding the existing contract.

The Mouse wins either way.

 

[Chili327]

Direct has so many advantages,

Curious, what are some of those advantages, & do they seem to be worth $50/pp ?

The Mouse wins either way.

Definitely, which is why the restrictions are baffling, to me they just hurt DVC value overall.

 

[Cfabar1]

Curious, what are some of those advantages, & do they seem to be worth $50/pp ?

to me, someone who will hold DVC for many years, direct has the advantage of future resorts. Being a VGF owner, that is possible to be one of the highest or highest points charts in the entire system for a long time. Being able to trade down into other resorts like a new OKW, AKL, has advantages, not to mention BC and BW 2.0 in 2043.

As restrictions increase, I think being able to trade out of your resort will have enhanced value as well compared to today.

You can often get an “additional year” with direct, and don’t have to hunt and hassle to build onto your use year. Early on someone told me start resale and then build out with direct and/or resale. I think that makes sense to me.

I almost view them as two separate products - and price them differently in my mind accordingly.