Originally posted by FLYNZ4
Dean,
I think that the probability that SSR will stand on its own in 38 years is essentially zero. T/S's in general are very lucrative for the developer... and DVC can (and does) command premium pricing which only exaggerates that fact.
I do think that DVC will try to expand more outside of the boundaries of WDW to ski locations and other places. In general, I think this will be really bad for current DVC owners because it will put a lot of demand on the on-site properties. I think your advice against buying off-site to someone who wants to say on WDW property was spot-on.
After I wrote my last note... I realized that the inflation in price is most pronounced at OKW... and some of the newer resorts may not have had this value increase... that was my mistake by lumping the 4 on-site resorts together. However, if history is an indicator... it would seem to be a reasonable prediction that the earlier you buy in the life of a term... the higher the value has the potential to rise, before it ultimately begins to decline. In the case of the newest DVC properties with current 38yr contracts... they may simply hold their value for a while before they begin to decline... and never really appreciate significantly.
Like you, I also look at this as a real estate transaction. I also apply my 3 categories of expenses to real estate as well. My #1 category includes "location" as the key element of protecting my equity over time. When buying property... I tend to buy in locations that I think will increase in value. I have no idea if this "temporary price inflation" we saw at OKW will ever manifest itself again... I can only speculate that it might.
I still think that in the end it will be moot... because against the common wisdom of this forum... I think that DVC will offer term extensions to the current properties. I think the financial incentives for DVC will be so great, that they will decide it is irresistible. I also think that will be good for the owners of the current (non-SSR) properties.
/Jim
Realize that in general, 50% of the value of any timeshare is marketing. That may be less for DVC but the principle still applies. If the ROFR and new sales stopped today, one could buy DVC within a year at $40 pp if they tried hard enough. I've seen contracts that low in the past 2 years, just that DVC bought them up. That's not to say all contracts would sell that cheaply or that most people trying to sell would take that low, just that it would happen at times. The usual selling price would likely drop to $60 pp or less fairly quickly. What would also happen is that a lot of contracts would not sell, heck, many don't sell now if they're larger contracts or a little higher than other listings. The price is artificially high at present.
There may or may not be other DVC resorts but I can bet you none will be outside a Disney venue. DVC has already gone that route and backed off. They've even gone as far as announcing an off site project, then scraping it and selling the property. I could see one at DL, Paris, Tokyo or WDW but not a ski option or another beach option. From a business standpoint, VB and HH were quite miserable failures. IMO, it's because DVC's expectations were too high not because they weren't fine resorts at a "reasonable" price. The other item necessary for DVC to successfully sell off site timeshares is to be more aggressive in selling, which they can do and still be ethical (Marriott does).
