How Important Are Those Twelve Extra Years?

[cruise-o-matic]

The 12 years were not important to us. We selected HH primarily for the combination of price and low mf's. The 11 month booking advantage was a strong secondary consideration though.

My main issue is that SSR is going to be too huge. Besides the 12 years, and maybe DTD view, what 11 month advantage does SSR have? Why should I pay extra when I know I can easily book there w/i the 7 month window?

Also what's going to happen 5-7 years from now when the resort is sold out? What will DVC's position be on ROFR then? I think SSR is a big reason why they are aggressively going after ROFR now:

1) It closes the gap between the prices on the resale market and SSR, making it more attractive to buyers. (Or as your Guide will tell you, why buy a sold out resort for $89, when you can get SSR for $85.)

2) Buyers frustrated with the resale market have put their names on the DVC waitlist. So points gained through exercising ROFR don't stay in inventory long.

So if DVC isn't building another stand alone resort, what would be the incentive to go after ROFR then? (Another add on resort, like the hotly rumored Contemporary, or smaller resort may be able to sustain prices through low supply/high demand.) Especially when SSR points flood the market (more owners = more sellers, you know that supply/demand stuff again).

So if I'm going to get SSR points and want the 12 extra years, I can wait another 7-10 years or so and see what the resale prices are like.

Just my humble opinion.....

 

[sjdisneywedding]

Its an $8 delta in resale currently. 200 points thats $1600. I get a guarenteed 15% at my ESOP at work (its a great deal actually). I get a guarenteed 18% not having that $1600 in credit card debt and guarenteed 6% not having it in my mortgage.

Or I can spend it now. That $1600 right now in opportunity cost - my husband wants a new PC. My kids want a trip. I'm going to Vegas with my girlfriends. We'd like to rebuild our deck, or finish our basement - $1600 won't do much of that, but its a start. I have plenty of places to put $1600 now that aren't "Disney Vacations in 39 years."

beautiful, you do your form of math and I'll do mine. Mine shows me I can get SSr for resale at $77 now, not even the $80. So your $1600 figure is probably more like $800. So if i am shelling out 14k-15k for a $72-$75 per point contract another $800 for 30% more years of use is not even worth discussing, its a no brainer, in my opinion

I mean who would really choose A over B

A: $15, 000 for 37 years
B: $15,800 for 49 years

this is an insane debate if your talking from strictly a financial point of view

 

[TCPluto]

We just added on at SSR. Location and extended expiration weighed in equally. I doubt that I will see the end of the SSR contract, but children will.

 

[rinkwide]

...I can get SSr for resale at $77 now...So if i am shelling out 14k-15k for a $72-$75 per point contract another $800 for 30% more years of use is not even worth discussing...

That's a possible scenario but certainly not a realistic one as most buyers pay significantly more than the $3 per point premium in the above example.

It is interesting to see your theoretical valuation difference comes close to the target $2 mark mentioned earlier. You may be right, the 12 year extension might just be worth the 3 bucks.

...How do you come to the conclusion that the points are worth only $2?...The $10-15 more for the intial cost is a one time fee...

 

[Buzz's Buddy]

I would have purchased at SSR even without the additional 12 years. That being said, I know that my children and grandchildren will certainly appreciate them.

And judging by the fact that Disneyland has been going strong for going on 50 years, and WDW for more than 33 years, I have no doubt that my children and grandchildren will still enjoy going to WDW 38 years from now.

 

[FLYNZ4]

Buy SSR through Disney - $85
Buy others (resale) - $72-$78

That's a $7-$13 delta. That $7-$13, will have no added vacation value, until 2042. In the mean time take that money and invest it... If you still want to vacation at WDW beyond 2042, then just buy an SSR resale after the resale price has collapsed. Absolutely no reason to buy now... This approach is lower risk, higher reward, and you'll still get at least 40 years of vacations at the best resorts.

Tim,

You are usually very balanced and credible... so I am really confused why you chose to make a comparison with the most expensive way to buy SSR vs the cheapest way to buy the other resorts. An equally non-credible comparison would have been:

Byy SSR resale: $77
Buy sold-out through DVC: $89

For a $12/point savings for SSR. Which of course we know is not true either.

If you want to compare resale-resale... then the sold out resorts enjoy a few dollar/point price advantage. If you compare DVC-DVC... then SSR is a bit cheaper.

/Jim

 

[timC]

Tim,

You are usually very balanced and credible... so I am really confused why you chose to make a comparison with the most expensive way to buy SSR vs the cheapest way to buy the other resorts. An equally non-credible comparison would have been:

Byy SSR resale: $77
Buy sold-out through DVC: $89

For a $12/point savings for SSR. Which of course we know is not true either.

If you want to compare resale-resale... then the sold out resorts enjoy a few dollar/point price advantage. If you compare DVC-DVC... then SSR is a bit cheaper.

/Jim

Thanks Jim. My comparison is based on what I believe are typical street prices. I believe most SSR contracts are sold through DVC direct ( $89 less discount ), and most non-SSR resorts are sold through resale ($72-$78 ). Maybe I'm wrong about this. I have no statistics to show average sale price. If there's a $77 SSR contract out there, that's outstanding, but I don't believe many people are signing deals like that. I felt these were reasonable assumptions for a casual discussion.

Maybe we should all agree on street price, before we continue the discussion.

 

[FLYNZ4]

Tim,

If you base the comarision on "average price" that mixes the "educated consumer" and the "uneducated consumer" into the same bucket... EXCEPT... the uneducated consumer only has the option of buying from DVC... which will skew the results non-objectively.

I think it would be much more fair to base the comparison on prices that are achievable by educated consumers... OR base the comparision on the what DVC is selling the various properties for.

Last year... the resale market for SSR was non-existent... so for someone like me who wanted the longer contract of SSR... the only choice was to buy from DVC. Each day... getting a SSR contract resale is getting a little easier... and certainly if I was buying today, I would take the resale route for SSR. It still may be a bit premature to easily buy SSR on the resale market... but we are seeing a lot more contracts come up for sale... so the trend is SSR resales are, or soon will be, a viable alternative to buying from DVC directly.

One more thing... I have no idea if there are really $77 SSR contracts or not... I was just using a previous poster's data. It is the methodology that I am contesting... not the actual data points.

/Jim

 

[sjdisneywedding]

just in case your curious to see it for yourself, check out the link at the top of our pages for current dvc resales. You will find the ssr for $77 per point. 250 points for 19,250. Although this isnt the norm, as of yet, there really isnt much of a norm for resales that I have seen anyway. They are difficult to judge based on points available in the contract and the such

but the $12 delta originally spoke of would seem to be extremely difficult to meet even for the most inexperienced dvc buyer. i frequently see bcv and bwv for resale prices in the $78 range. In fact if you look at those resales on the list right now and do some quick math you will see BCV's going for 80, 81, 83 per point and even up to $87(which is by the way more than even buying direct from Disney w/ no closing costs)

My whole point is that the average difference between SSR and other resorts when considering all these sales is minimal at best. Can the savings be significant, sure it can, but more than likely its not the norm.

theres a million reasons to say the $12 years are not worth it, but financial reasons are probably not the highest on that list, if they are even on it at all

I would totally understand and agree with the theories of saving money and investing it if there was solid proof showing someone buying SSR is paying significantly more than if buying other resorts

heres some dvc's w sales pending or for sale

Beach Club Villas-Sale Pending March 100 $8,300.00($83 per point)
Beach Club Villas - Sale Pending April 100 $8,100.00($81 pp)
Beach Club Villas-Sale Pending August 150 $12,450.00($83)
Beach Club Villas-Sale Pending April 180 $14,750.00(82)
Beach Club Villas-Sale Pending April 200 $16,000.00(80)
Beach Club Villas-Sale Pending October 200 $17,000.00(85)
Beach Club Villas-Sale Pending December 220 $19,140.00(87)
Boardwalk Villas- April 150 $11,700. (78)
Boardwalk Villas-June 150 $11,700.00 (78)
Saratoga Springs-. February 150 $12,300.00($82)
Saratoga Springs-. April 200 $16,400.00(82)
Saratoga Springs-Sale Pending February 250 $19,250.00 (77)
Saratoga Springs- December 300 $25,950.00 (86)
Saratoga Springs-December 625 $50,000.00 (80)


so I am sorry to keep disagreeing but facts are facts and i do not see anywhere near a $12 delta or even an $8 delta for that matter. What I see is that BCV and BWV are in many cases either equal to or MORE than what SSR is selling for. So I ask again, based strictly on finances, do you want a or b based on above data

a: bcv 150 points $12,400 for 37 years
B: ssr 150 points for $12,300 for 49 years

no brainer

 

[Mike]

So the question: How important a factor is the longer term for you in past, present or future buying decisions?

The problem is the way the poll question was asked. There is no particular timeframe identified. I purchased in July. My choices were to pay $95 for SSR (or $85 if I wanted to sell back my first year's points) or to pay $70 for my OKW contract that had an additional year of banked points. That is why I voted the way I did because the 12 years were not anywhere near worth the additional cost. Of course if current market conditions dictate that there is no difference in cost then the 12 additional years make sense unless the purchaser subscribes to the buy where you want theory and has no interest in staying at SSR.

I suspect a lot of folks are responding based on the situation that they faced at the time they purchased, not based on the current deals.

 

[sjdisneywedding]

The problem is the way the poll question was asked. There is no particular timeframe identified. I purchased in July. My choices were to pay $95 for SSR (or $85 if I wanted to sell back my first year's points) or to pay $70 for my OKW contract that had an additional year of banked points. That is why I voted the way I did because the 12 years were not anywhere near worth the additional cost. Of course if current market conditions dictate that there is no difference in cost then the 12 additional years make sense unless the purchaser subscribes to the buy where you want theory and has no interest in staying at SSR.

I suspect a lot of folks are responding based on the situation that they faced at the time they purchased, not based on the current deals.

very true, when you bought will definately impact your vote

 

[rinkwide]

Beach Club Villas-Sale Pending March 100 $8,300.00($83 per point)
Beach Club Villas - Sale Pending April 100 $8,100.00($81 pp)
Beach Club Villas-Sale Pending August 150 $12,450.00($83)
Beach Club Villas-Sale Pending April 180 $14,750.00(82)
Beach Club Villas-Sale Pending April 200 $16,000.00(80)
Beach Club Villas-Sale Pending October 200 $17,000.00(85)
Beach Club Villas-Sale Pending December 220 $19,140.00(87)
Boardwalk Villas- April 150 $11,700. (78)
Boardwalk Villas-June 150 $11,700.00 (78)
Saratoga Springs-. February 150 $12,300.00($82)
Saratoga Springs-. April 200 $16,400.00(82)
Saratoga Springs-Sale Pending February 250 $19,250.00 (77)
Saratoga Springs- December 300 $25,950.00 (86)
Saratoga Springs-December 625 $50,000.00 (80)

If I was to find the above listings on a resale site the fact that would jump out at me would be that every single BCV contract is pending, regardless of the shorter term or (relatively) high price. Conversely, the only SSR membership selling is the cheapie.

Not sure what, if anything, that says about the importance of the 12 extra years but I do find it interesting.

 

[sjdisneywedding]

If I was to find the above listings on a resale site the fact that would jump out at me would be that every single BCV contract is pending, regardless of the shorter term or (relatively) high price. Conversely, the only SSR membership selling is the cheapie.

Not sure what, if anything, that says about the importance of the 12 extra years but I do find it interesting.

oh I totally agree with you, like I said theres millions of reasons(not really but alot) to think the 12 years arent a big deal. Highest on that list I would imagine is the booking windows and having a love for a particular resort other than SSR.

im just trying to show that the finacial reason belongs way way down on that list if anywhere on it at all. Id even buy into not wanting the 12 years because its a burden reason before the reason of the initial cost is too much

 

[kathleena]

If I was to find the above listings on a resale site the fact that would jump out at me would be that every single BCV contract is pending, regardless of the shorter term or (relatively) high price. Conversely, the only SSR membership selling is the cheapie.

Not sure what, if anything, that says about the importance of the 12 extra years but I do find it interesting.

I can think of two possibles:

Could that be because the current Disney rate with the perks makes a direct buy more desirable than these resales?

Plus, new owners would have less knowledge of secondary market and current owners may be buying up the sold out properties?

 

[Steve's Wife]

It's a matter of whether the contract runs out when I'm 78 or 90...

 

[Chuck S]

Having no children, the 12 years is not important to me. I will be either 83 or 95 years old when the contracrs expire.

 

[DrTomorrow]

Well, it's been three days since the last post, and this thread's on page 3 now; a good time to review:

Slightly more than half of all voters said that the 12 extra years was important to them, with almost a third saying that it was "Most" or "Very" Important.

 

[CRSNDSNY]

I'm interested in the 12 extra years soley for our children.

 

[ClarabelleCow]

so for everyone who is saying they dont care about the 12 years because they wont be around anymore, is it then safe to assume that the whole benefit of being able to pass these contracts on after passing is of no use to you?

YUP - I never expect my parents to leave me a dime, we live life for today, not tomorrow! I have cousins that all they talk about is "I want this, I want that". The way I feel is if my parents could live a good life, have to sell off assets to do it, then great. I also hope my kids feel the same way. We bought DVC for now, not when we are gone, if its still there then great, if not, ohwell, hopefully they will remember the fun we had!

 

[pkgman]

We are still deciding but the 12 years is playing a small factor in our decision.

I'm 38 and my wife is 36 so we will be in our 80's. But we had our first child this past summer. It would be nice for him to be able to take his children hopefully.

Actually, we are looking foward to taking him summer 2006.