POLL: The OKW contract extension offer -- NOT just for OKW owners.

[JimC]

...The only reason for us to extend would be to "recoup" some of our investment if/when we sell....We'll both be over 100 years of age if we are still alive in 2057 and I don't think we'll be traveling to WDW much after we enter our 80's - I'd like to think we will, but chances are not in our favor, darn it!...

This is our situation as well. But I would be interested if I believed that it would net an increase in resale value higher than the cost of the extension. For me, that is the real decision -- how does an extended contract affect value. And quite possibly it may depend on how much of the sales proceeds are put into some major refurbishments.

 

[dianeschlicht]

I said not interested. For me, $15 per point is too much to pay for something that will have no value until 2043!

The only reason for us to extend would be to "recoup" some of our investment if/when we sell. (We own at BWV). We'll both be over 100 years of age if we are still alive in 2057 and I don't think we'll be traveling to WDW much after we enter our 80's - I'd like to think we will, but chances are not in our favor, darn it! The kid can use it when we are no longer able to go. (If she wants a Disney timeshare after we are gone, she can use some of the cash we leave her to get one).

Anyway, since there is no way to know what the price differential will end up to be between 2042 and 2057 contracts, I have no way to calculate the value of an extension.

Since I really don't consider DVC an investment, I'll be putting the "extension" money elsewhere - either into more points (if I want to use it for vacations) or a "real" investment until I need/want it for something else!

My thoughts exactly!

 

[bluslag]

I am just confused about all this. We own at 3 resorts so I would assume they will eventually extend all of these. I certainly do no want to pay out more money at this time but I don't want to see there value go down either. If they do extend the years on these resorts will that make them more valueable or does it just take down the value on the ones we have. If it raises the value on the other ones and ours stay the same we may have a few years that it doesn't depreciate. We are 54 right now and in 30 years we will be 84 and thats a lot of years hopefully that nothing goes wrong. You never know whats around the corner. If we don't sell in the future we will leave it to our children but I'm not sure they would not want to sell it. I just feel we have been misled a little because we were all in the same boat when we bought it. We all knew it ended in 2042. Now if we choose not to extend we may be taking the value out of our own contracts. No one can see the future so there may be a chance that we have to sell and I would hate to see the value not there. I won't extend our contracts because it just was not in the plan. We have 600 points and its a wonderful amount for us but we don't need the extra years and it would cost us $9,000.00 more for something we won't use.

 

[Gary K. D.]

My question is: Will the "new" OKW be worth $25.00 more on the resale market bringing the cost to $100.00 per point for an OKW extended contract OR will the current price of $70 to $75 hold for the extended contract and the present contracts be now worth only $50 per point. Look at the current SSR contracts with the extended life to 2057...they are only bringing $81 on the resale market. My guess is that there will be a differential but no where near the $25 price Disney is placing on the extended contracts...How about $5.00 per point for the extension, Disney? That would be a little more realistic.

 

[Mtnman44]

IMHO - this is a tough one. i see good arguments on each side. I think that overall, this only makes sense if you are young enough now to know that you will be using your OKW contract after 35 years from now. I'm not sure how smart the whole "maintain" the value argument really is. You are really buying extra value, not gaining any, so it's a wash. Sure it will hold it's value longer, but it also cost another $15 per point to do that.

That being said, I will consider this. I would sell my SSR and buy a OKW contract with the intent of upgrading. that's a lot of trouble so I'm not sure how important the 11 month window really is for me at OKW.

 

[salmoneous]

But I would be interested if I believed that it would net an increase in resale value higher than the cost of the extension. For me, that is the real decision -- how does an extended contract affect value.

Take a look at the relase prices of SSR vs OKW - about $5/point. It pretty much inconceivable to me that the resale price of OKW 2042 would be more than $15 more than OKW 2057 anytime soon.

 

[salmoneous]

And quite possibly it may depend on how much of the sales proceeds are put into some major refurbishments.

I think 0% of the proceeds go into refurbishments - that's what dues are for. As far as I can tell, 100% of the proceeds goes into DVD's pocket.

 

[mlill]

We own at BWV and would consider extending our contracts for the kids. It really depends on what the price per point is. $15 is OK, $10 would be even better. Anything more than $20/point is probably a NO. I guess we'll just have to wait and see... Doesn't that seem to be the trend with all things DVC lately? Wait and see...

 

[pilferk]

Take a look at the relase prices of SSR vs OKW - about $5/point. It pretty much inconceivable to me that the resale price of OKW 2042 would be more than $15 more than OKW 2057 anytime soon.

I'm not sure that's a solid assumption, because there's no differentiation currently on the market and because current prices are kept afloat by ROFR.

Now, add the differentiation in (2042 vs 2057) combined with (you'd think) a change in Disney ROFR use, and you'll start to see some variation. That top price might not come down (meaning OKW 2057 might stay around where it is now) but if it doesn't.....you'll probably see the OKW 2042 contracts price come down. I can't see much of a situation where those two options stay real close together and, as you point out, neither can go much higher than the current price since they'd price themselves out of the market.

It's going to be VERY interesting to see what happens.

 

[MAGICinMYHEART]

I'm sure the extened dates wouldn't benefit me as I'll be in my 90's in 2042, I have two contracts, I'm single with no children. My younger sister is listed on both contracts she has 4 sons the youngest is 7, this would be advantageous for her...So I plan on asking her if she would be interested in paying the additional charges to extend the contracts. Most all my current trips always include my DSis and nephews.

 

[bluslag]

This just keeps me thinking. I probably won't extend my OKW contract but it might make sense to extend my BWV and BCV contracts because both of these resorts are right in the middle of Epcot and MGM. They should always be in demand. Prices on these have always been the highest. What does everyone think.

 

[Granny]

I said not interested. For me, $15 per point is too much to pay for something that will have no value until 2043!

Yep, that pretty much sums up my feelings on it.

 

[justjudy]

It's no for us as well. DH and I will be (if we are lucky enough to live so long) 94 and 92 respectively when our OKW contract expires. And no, we haven't forgotten our daughter. WDW is not her thing, but if that should change we still have the AKV points she can use.

 

[Dancind]

No to the OKW extension for me as well. Forget that I will be dead or nearly by then, I just don't think they are doing that good of a job of maintaining the resort. Our last stay in a 2 bedroom required a number of calls to maintenance and housekeeping. And it really bugs me that they don't put some kind of seal around the front doors, you can see light practically all the way around. Critters can easily get in and air conditioning is going out. More dues increases is all I see.

I might consider the extension at BCV, would have to think about it.

 

[dvcbrad]

Here are my thoughts that I posted on another thread ... I personally would like to see some sort of current perk or incentive added in to justify spending the additional $15 per point. Otherwise, as stated in another post above, we're being asked to spend $15 per point now for something that won't give us any return value until 2043! If they were to include a one-year, or some percentage thereof, incentive equal to your current points if you extended (similar to developer points on new sales), that would certainly make it more enticing. If it's merely just to extend an additional 15 years, I'm not sure I see any big benefit to doing so. As of now, our plan is to hold on to our points and use them until we can't, anyway, which I'm sure will be long before 2057, so the resale value is really not a consideration for us. However ... if they did include some sort of current incentive as part of the offer, we might give it serious consideration. Otherwise for us ... I doubt it.

 

[salmoneous]

because current prices are kept afloat by ROFR.

Now, add the differentiation in (2042 vs 2057) combined with (you'd think) a change in Disney ROFR use, and you'll start to see some variation. That top price might not come down (meaning OKW 2057 might stay around where it is now) but if it doesn't.....you'll probably see the OKW 2042 contracts price come down.

The thing is, I don't believe ROFR is keeping prices afloat? Why would we think that is happening?

Right now there are plenty of buyers willing to pay $75-ish for 2042 OKW points. That demand is real - it isn't being created by ROFR. If Disney were to stop ROFRing the 2042 contracts, would sellers suddenly start charging less? Or would they continue to charge what buyers are willing to pay?

Would the existence of 2057 OKW contracts make 2042 OKW contracts less valuable? There are tons of 2054 SSR contracts for sale - I just don't see having a few 2057 OKW contracts changing the market significantly.

 

[pilferk]

The thing is, I don't believe ROFR is keeping prices afloat? Why would we think that is happening?

Right now there are plenty of buyers willing to pay $75-ish for 2042 OKW points. That demand is real - it isn't being created by ROFR. If Disney were to stop ROFRing the 2042 contracts, would sellers suddenly start charging less? Or would they continue to charge what buyers are willing to pay?

Would the existence of 2057 OKW contracts make 2042 OKW contracts less valuable? There are tons of 2054 SSR contracts for sale - I just don't see having a few 2057 OKW contracts changing the market significantly.

Whether you believe it or not, ROFR does keep the prices high. Artificially and greatly so? Maybe not. But look at the reports of ROFR being used. Obviously THOSE sales are at "lower than market value", right? Or what Disney deems "lower than market value". So, obviously, there are owners and buyers out there willing to sell at less....and many walking "the ROFR line".

So, without ROFR, and if that were left to run rampant, owners might not have a choice than to sell for less...because competition amongst sellers would force them to. NOW there is a "do not cross" line, artificially set by Disney. I don't think there's any way you can argue that ROFR has no effect on prices...there's just too much evidence to the contrary. How GREAT that effect is I suppose you can question, but the fact Disney excercises ROFR fairly regularly is proof enough that it does have an effect.

As to what effect the 2057 contracts will have on the market, we'll have to wait and see. But I certainly don't think you can ASSUME there will be NO effect, or minimal effect, just because there is a "small" difference between OKW and SSR resales right now. It MAY be the difference between 2042 and 2057 contracts is minimal. It may not. But there WILL be a difference.....it's just a matter of what it will be.

 

[crisi]

No, I've said many times "we'll be old when the contract expires and aren't interested in passing it to the kids."

I am amused by how much has been made about SSRs later expiration date as a point when recommending which resort to purchase. I hope there won't be a lot of unhappy SSR owners who only bought for the additional years when OKW (or BWV or BCV or SSR) gets extensions. Hopefully, people purchased the resort they LIKE today, not the resort that they believed would be the only one functioning in 40 years.

 

[bluslag]

The other thing that concerns me and I don't know if this is correct is that we will only have a small window to make this decision. It took me over 7 years to get all my points. I certainly don't think I can make this decision in 3 months. I'm pretty sure we won't do this but I don't like to be pressured. All or nothing.

 

[kimberh]

If I did agree for the "sold out resorts" it would be strictly for resale alone. I would need a "perk" offered to me now, not 35 years down the road. I seriously doubt I will be traveling to Disney in 2043...but maybe....