What's Your Crystal Ball Predictions of Resale Prices

[Shamus]

In general, what do you expect the average resale prices of the 2042 resorts to do over the next 20 years?

 

[disneynutz]

It all depends on what Disney and the economy does.

Bill

 

[tjkraz]

Sorry, didn't vote. Options made me cross-eyed.

Over the next 20 years, the contracts ending in 2042 will lose 66% of their remaining years. So I would expect them to lose at least 66% of their value. Possible more since in 2031 there could be a pretty limited market for contracts with only 10-11 years of ownership left.

Closing costs and other fees will be a much higher proportion of the overall investment for buyers. And really DVC will become more of a short-term prospect rather than long term.

Over the last couple of years, DVC has still been relatively successful in marketing the long term value of DVC despite the attractive promotions given to cash guests. Buyers are betting that those offers won't be around forever and a DVC purchase today will pay off many times over in the years to come. But like Bill said, any dip in the economy in the waning years of those '42 contracts will make buyers much less willing to risk the purchase.

 

[JimMIA]

Over the next 20 years, the contracts ending in 2042 will lose 66% of their remaining years. So I would expect them to lose at least 66% of their value.

I think Tim's analysis is a best-case scenario if you carry it out 20 years.

A more relevant timeframe would be 5-10 years, because that's how long most folks voting will own.

 

[bobbyg4eagle]

In general, what do you expect the average resale prices of the 2042 resorts to do over the next 20 years?

That's the $64,000 question for anything nowadays. Saw today where airlines are cutting capacity and raising prices, and another company is raising meat prices. Lodging is a percentage of the stay and with rising prices for food and fuel I expect fewer trips and more people scrutinizing the total cost of a DVC trip before committing to the purchase and then the MF's. Maybe fewer buying on emotion and more delaying purchases because of economic reality.

Housing is going to keep consumer confidence in check, taxes are going higher to pay for unsustainable deficits, interest rates are at zero and have nowhere to go but up and austerity is the theme in the public and private sectors.
On the brightside, there is a competitive devaluation among major currencies which in itself is inflationary which forces prices up for things in demand.
Question is will DVC points be in demand when it costs so much for things at Disney besides lodging.

My guess is bids will continue lower and asking prices will drop as sellers opt for cash in hand.
America's standard of living is under pressure and some DVC'ers will end up back at moderate resorts. Nothing wrong with that, as we are all still at Disney.

 

[Brian Noble]

If you are thinking about buying, and assuming you have at least a 10 year time horizon, you should buy assuming zero residual value. It will probably be more than zero, but---once you account for inflation---probably not enough to matter.

If you have a time horizon much less than 10 years, you are probably better off renting.

If you are thinking about selling, rather than buying, I don't know anyone who can time the market any better than this guy.