Since DVC purchase is not forever, won't prices have to go down?

[cgcruz]

Thats is if Disney continues selling DVC. At some point, DVC prices going up just won't make sense. Thats unless DVC keeps making new DVC resorts and having a later Lease Expiration date.

 

[debloco]

Yes, I would think so as well. There are a few theories on the boards about when the "tipping point" will be reached.

 

[DisneyDadof2]

I believe that as long as they keep opening new resorts and people are willing to pay the price then they will level off eventually. Prices will only come down if people stop buying points.

Just my thoughts.

 

[bongo59]

i dont buy that..........the prices will fall as we approach the yr that ownership reverts back to Disney...........that likely will happen 5-7 yrs before that date.................but one thing could keep the price up...............if inflation continues to hit the hotel room prices those who bought DVC 2006 and before are likely to see the value in their initial purchase to be quite large........buying at BCV in 2035 will mirror the going rates of the GF at that time.................the other possibility to keep values high is if old owners are some how grandfathered in or given a significant price reduction for rebuying an older resort................that would affectr mkt prices as well.................more than likely Disney will tear them down and rebuild and retheme and resell them...............

 

[Dean]

Other RTU timeshares have usually started to decline around 26-28 years out. For DVC it will likely depend in part of new sales and the ROFR issue. But at some point sooner rather than later, prices will decline until they are zero at or shortly before expiration.

 

[CarolMN]

Every DVC contract Disney sells gives Disney the RIght of First Refusal.

The prices remain high because Disney exercises its ROFR whenever it decides the agreed-upon sales price is too low.

Until Disney stops using its ROFR, prices will remain high. No one here really knows when Disney plans to stop exercising its ROFR so aggressively.

I hope no one who really wants to buy DVC is waiting for prices to fall - IMHO, it isn't going to happen for several years yet. I think we have a few years of rising prices left. JMHO. YMMV.

Best wishes -

 

[byoung]

Every DVC contract Disney sells gives Disney the RIght of First Refusal.

The prices remain high because Disney exercises its ROFR whenever it decides the agreed-upon sales price is too low.

Until Disney stops using its ROFR, prices will remain high. No one here really knows when Disney plans to stop exercising its ROFR so aggressively.

I hope no one who really wants to buy DVC is waiting for prices to fall - IMHO, it isn't going to happen for several years yet. I think we have a few years of rising prices left. JMHO. YMMV.

Best wishes -

I totally agree.

 

[mydogdrew]

Many, many people just don't understand the time value of money. The same folks that place a meaningful financial value on the 12 extra years at SSR (these points are really worth about one year of current points) will prop up the value of resale well beyond what one would otherwise conclude.

 

[Granny]

I agree with all that we are several years away from the downslide for DVC resale pricing.

Just think of all the people who have posted here that they see their "break even" in 7-9 years from their DVC purchase. Clearly they would have bought with even just 20 or so years left based on their number crunching.

I think the "tipping point" will be when the extra 12 years mean a lot to more people. If I'm 40 years old and can buy resale for 36 more years or SSR for 48 years, that extra 12 years might not make much difference to me.

But fast forward a few years and another 40 year old will be looking at, say, 23 more years for resale and 35 more years for SSR. Clearly, those extra 12 years will be appealing to a lot more people.

Whenever the extra years become a compelling selling point, I'd say that Disney will abandon its ROFR since they will no longer need it to prop up pricing for new sales. At that point, resale pricing will plummet (not a gradual decrease).

Just my thoughts. YMMV.

 

[Melrosgirl]

Yes, as a matter of fact, dh is trying to talk me into selling BCV now b/c prices are very high for BCV re-sales (and seem to be selling pretty fast). He feels in another 10 years, prices will def. come down just based on fewer years left.

We could sell BCV now and make a nice profit even after the real estate commission costs, etc.

Not sure I want to sell though, so we're holding tight for now.

 

[keishashadow]

Even with the 12 year difference between SSR & the rest of DVC, the earlier points are still "valuable" up to when they expire:

1) Can still use for 11 month window (even with a very small add-on or resale w/points borrowed, transferred in)

2) hedge against year WDW resort price increases (since I've been unofficially monitoring in '03, even the values have risen approx. 10% year).

Only thing I'd hate to see would be the loss of ROFR "protection" from WDW. Some members practially "give their points away" for rentals, I can only imagine the fire-sales if DVC doesn't monitor the situation/keep the market stable.

Since the resale market seems to be full of SSR units for various reasons, wonder where in the dues that line item (ROFR of contracts) will show up?

 

[Granny]

Only thing I'd hate to see would be the loss of ROFR "protection" from WDW. Some members practially "give their points away" for rentals, I can only imagine the fire-sales if DVC doesn't monitor the situation/keep the market stable.

Since the resale market seems to be full of SSR units for various reasons, wonder where in the dues that line item (ROFR of contracts) will show up?

It doesn't take much imagination to think about what would happen to DVC without ROFR. Look at the rest of the timeshare industry and you'll see dramatic drops in pricing after the initial purchase.

As for the ROFR costs, I am quite sure that those cannot be part of our maintenance fees. The list of applicable charges for maintenance fees won't include any of the selling/marketing costs of Disney. Those will be borne by DVD and included in their cost statements as they resell the points.

 

[allflgirl]

I believe SSR's value will be affected by the fact if more DVC resorts are opened in the future with the ending year being 2054. OKW was the first resort with the ending year of 2042, so SSR may follow suit being the first resort of many with the ending year of 2054.

I'm hoping for some new resorts closer to MK or AK as a add on for the future. I have a small (150 pt) contract at SSR and would add on another 50 - 100 if a resort is added at MK or AK with the ending year being 2054.

You can only hope.

Julia

 

[Spine_DR]

My guide said that the nest few resorts coming will have the same contract expiration as SSR

 

[tgj]

Is there any reason why DVC could not take some of the BCV (or OKW, etc) points that they obtain through ROFR and offer them up to the public with a later expiration date and with, say, a $115/point premium price?

I see no reason they couldn't if they've done their math - as they ALWAYS do....unless those points are somehow committed to staying in the same category/status as they were before ROFR....

It may not be that the ONLY way they'll keep this going is by building new resorts.... Just a thought.

 

[rinkwide]

...resale pricing will plummet (not a gradual decrease)...

While that might be true for the off-site resorts, any form of real estate interest on-property will maintain significant value as long as the Walt Disney World Resort remains the most popular vacation destination in the world.

 

[Dean]

It doesn't take much imagination to think about what would happen to DVC without ROFR. Look at the rest of the timeshare industry and you'll see dramatic drops in pricing after the initial purchase.

As for the ROFR costs, I am quite sure that those cannot be part of our maintenance fees. The list of applicable charges for maintenance fees won't include any of the selling/marketing costs of Disney. Those will be borne by DVD and included in their cost statements as they resell the points.

Actually I don't think that ROFR is that important. Actually I'd say that over the last 5 years that at least 50-60% of the time ROFR has not been up to the level that resales were going for. The last couple of years DVC has simply been more aggressive with ROFR and it has had a larger effect. IMO, one reason is that SSR has been harder to sell than the previous 2 resorts and they felt they needed to funnel people in. But what ROFR does is eliminate those fire sales that sometimes happens. DVC is not the only timeshare that has held it's value or increased in value though it is a part of a fairly small group.

Is there any reason why DVC could not take some of the BCV (or OKW, etc) points that they obtain through ROFR and offer them up to the public with a later expiration date and with, say, a $115/point premium price?

They could not do so legally without having a direct vote of the actual members and changing the POS. They'd have to extend the contract for each and every member as well. What they could do is sell an extension for the end to get it up to what SSR will be. Even that will require a vote. I don't think this will happen but others do.

 

[Dean]

My guide said that the nest few resorts coming will have the same contract expiration as SSR

And I'd say that's very likely given the history of DVC.

 

[bongo59]

Dean I agree completely with you about the ROFR...............that is always looked at as the biggest reason that prices have stayed up but with each passing yr since 1991 the power of the ROFR has lost steam..................

 

[Granny]

Actually I don't think that ROFR is that important. Actually I'd say that over the last 5 years that at least 50-60% of the time ROFR has not been up to the level that resales were going for. The last couple of years DVC has simply been more aggressive with ROFR and it has had a larger effect. IMO, one reason is that SSR has been harder to sell than the previous 2 resorts and they felt they needed to funnel people in. But what ROFR does is eliminate those fire sales that sometimes happens. DVC is not the only timeshare that has held it's value or increased in value though it is a part of a fairly small group.

I will certainly acknowledge that I am not a timeshare expert, and I bow to yours and others' expertise. I am surprised to hear that other RTU (ie, with expiration dates) timeshares would go up in value as their contract life shortens as DVC has.

It just seems to me that without ROFR, people would tend to "fire sale" their points quite a bit, especially those who feel that they've already "broken even" on their original investment. Also, I'm thinking of the reasons that many people sell such as divorce, financial hardships, etc and thinking that many of those sales would not hold out for "top dollar". Just look at the rental boards' pricing and you can see that even savvy DVC owners don't value their investment all that highly or well.

In any event, since I don't think we'll be buying more points, this will probably not affect me personally (unless I have to sell a contract). It is certainly an interesting dynamic and clearly not the "open market" that I would think that most of the rest of the timeshare resale industry works in.