does anyone ever wonder...

[CK1]

Does anyone else ever wonder at what year roughly the DVC sales and resales will dwindle down due to the decreased value as we approach the "doomsday hour" of Jan 31, 2042?

I mean, it was hard to resist buying over 40 yrs of vacation when we bought our points, but I would imagine that paying even more for points (as point values rise) for even fewer years in which to use them will, at some point, become increasingly less attractive.

Cindy

 

[Maistre Gracey]

I think we have a long way to go yet. When you run the numbers, it may not be until the final years.
As long as owning points is cheaper than cash ressies, the price will not decrease. I think that once the cost to own, catches the cost to rent, than the per point price will have to decrease.

My formula:
point cost, divided by the number of years left to use, plus mtc fees, multiplied by the number of points to hold that ressie, will have to come out a little below the CRO rental fee.

I think I made that sound more complex than it really is.

 

[Doctor P]

Given that the breakeven right now appears to be a lot less than 10 years, I think dwindling values are well off in the future.

 

[Dean]

We've had several discussions about the resale value and what MIGHT happen over the years. The only portions I recall including the retail sales centered around how those would affect resale prices.

Dr. P and I disagree to an extent. I feel a large part of the resale market and therefore value are driven by the retail sales, DVC booths and the like. If that's the case, the once sales stop, prices will become lower and more variable fairly quickly. I'd say they'll drop 10-20% within the first couple of years then you'll see a leveling or very slow decline for a while that will become slightly steeper once we're within 25-27 years left. This is consistent with the experience of other RTU timeshares though none of those were on WDW property.

I don't think we'll see nearly as many people looing at CRO prices and saying "we need to buy DVC" as some other do. That doesn't mean value isn't there, only that I think the value must be FAR greater than just under CRO prices, even without taxes on the rooms. Plus expect Orlando and the area to come up with a per day timeshare tax like some other places have already.

 

[InstImpres]

Originally posted by Dean
I feel a large part of the resale market and therefore value are driven by the retail sales, DVC booths and the like. If that's the case, the once sales stop, prices will become lower and more variable fairly quickly. I'd say they'll drop 10-20% within the first couple of years then you'll see a leveling or very slow decline for a while that will become slightly steeper once we're within 25-27 years left.

Dean - do you really think with Dis having FROR that prices could drop or that enough of us will continually be waitlisted that they will just keep buying everything back than?

 

[Dean]

Originally posted by InstImpres
Dean - do you really think with Dis having FROR that prices could drop or that enough of us will continually be waitlisted that they will just keep buying everything back than?

Absolutely, no question in my mind. What will happen is just like any other good timeshare though likely to a lessor extent. I've already seen OKW contracts signed at $40 pp when the buy back was at $48-50 pp. What will happen is that many who try to sell will be thinking what they paid and what the current (NOW) market is. They will be listing at $70 pp and the agents will accept the listings. Some will discourage them overpricing (esp those that charge an upfront fee), others will be more realistic. Those looking to buy will keep making offers at lower prices and since things will not be selling as fast, someone along the way will accept lower for one of a number of reasons. Once the lower prices go through, word will get around and more will be looking for that level of a price and some will even try to beat it with a still lower price. The higher ones will not sell and the lower ones (or those willing to accept lower) will.

Remember that a lot of people who buy resale are those that heard about it while at WDW, did the tour, talked to the CM at the booth's or the like. Once there's no more tours, booth's, ads, etc; most people won't even know DVC exisits. The market of those even interest will drop to I'd guess 25% of what it is now in 5 years. Then there's the decreasing term remaining, increasing fees and the like.

The question of the value of DVC as the term decreases is only a small part of the equation. The decision for a member whether to sell is also significantly different than for someone else to buy.

 

[Disney1fan2002]

OK, color me confused with all this talk about 2042 expiration date. I thought that you bought DVC for a 40 year contract??? Meaning if you buy in 2002, it expires 2042, and if you buy in 2003 it expires in 2043. Am I wrong?

If I am, does that mean people buying now in 2003 only get a 39 year contract? I am sooo confused. LOL

 

[Maistre Gracey]

Originally posted by Disney1fan2002
OK, color me confused with all this talk about 2042 expiration date. I thought that you bought DVC for a 40 year contract??? Meaning if you buy in 2002, it expires 2042, and if you buy in 2003 it expires in 2043. Am I wrong?

If I am, does that mean people buying now in 2003 only get a 39 year contract? I am sooo confused. LOL

In it's current form, the drop dead date for DVC is January 31, 2042 regardless of when you buy.

I like your 40 year idea. I think that would be great way to do it...

 

[Mickmse2002]

I would be amazed DVC stopped direct advertising & selling via the booths as they do now. It wouldn't make good business sense. With a very specific drop dead date of 2042 for all current contracts it would only seem logical for a transition to a DVCII or similar concept. There is no other way to support all of the rooms through cash reservations on a regular basis.

I am very interested to see what the next concept in DVC will be.

 

[Dean]

Originally posted by Mickmse2002
I would be amazed DVC stopped direct advertising & selling via the booths as they do now. It wouldn't make good business sense. With a very specific drop dead date of 2042 for all current contracts it would only seem logical for a transition to a DVCII or similar concept. There is no other way to support all of the rooms through cash reservations on a regular basis.

I am very interested to see what the next concept in DVC will be.

Once DVC is through selling new resorts there will be NO need for the DVC booths everywere. That will happen in the next couple of years if SS is the last and in another 10-12 years I'd guess if EP happens in it's announced form. I frankly can't see anything else beyond that but would love to be wrong. They will not keep them up and running just for resales.

 

[Maistre Gracey]

Dean, don't you think that with all the possible phases of SSR that sales could continue several years?

 

[Dean]

Originally posted by Maistre Gracey
Dean, don't you think that with all the possible phases of SSR that sales could continue several years?

Sure it could. If they decide to expand SS beyond it's announced size, that puts most of the nails in the EP coffin. My guess is they plan to build the resort and then see how sales go. If things go well they could either expand SS OR proceed with EP. I'm very doubtful they would do both. Regardless there will be an endpoint. Some here on the board seem to have trouble envisioning an endpoint to this system and new resorts. The Orlando area is overbuilt with timeshares already. I'm afraid that SS will not sell that well and DVC will be finished with new resorts. Now if they were to add one at say GF, Poly or AKL; that would be different and easier to sell. I could also see a medium sizse or larger resort over near AK and close to Blizzard Beach. Maybe even an extension of Coronado Springs. I hope I'm wrong.

 

[Mickmse2002]

I don't doubt there will be a saturation point for construction of new DVC resorts. I agree with Dean that SS may not sell all that well for a variety of reasons. I also think that a DVC property near Grand Floridian/Contemporary/Polynesian would do fantastic. I have no trouble at all with envisioning an end point to the current DVC, that end point is very clear. From a business standpoint DVC would have to come up with a new version to put bodies into the rooms beyond 2042. I think you will begin to see extension contracts offered to current DVC members as the deadline approaches.