When will DVC points decline in value?

[kraymer]

Hi all. I am a relatively new DVCer (bought in May of last year). I was wondering what you guys think about this question. In addition to the obvious benefits of the DVC (the great vacation destinations that are offered - this is why I bought), there is no debate that DVC points are also a great commodity as values have steadily been going up. When do you think values will start to drop as we get closer and closer to the end of our lease (2042?)? Any ideas?

Also, as new DVC resorts open, when do you think their expiration date will change to something further in the future?

Thanks in advance for you great insight ,

kraymer

 

[Richyams]

About six months before I decide to sell mine.

 

[Granny]

We don't look at DVC as a commodity that is holding it's value or even going up. For us, it's simply a front-loaded luxury vacation package good for another 38 years.

But to answer your question, it depends on a lot of things.

When will DVD stop building DVC resorts? If they stop building because demand is pretty much maxed out, then they'll also stop exercising their ROFR which is what is artificially propping up the resale market prices right now.

If they continue to build and exercise ROFR, I would expect the value of the 38 year DVC contracts to start dipping in about 10 years or so.

Just an opinion...hard to forecast since it will depend on a few factors.

 

[FriendsOfEeyore]

We recently had a discussion about this...

http://www.disboards.com/showthread.php?s=&threadid=493156

as Doc would say,

Enjoy!

 

[vernon]

About six months before I decide to sell mine.

LOL, I know where you coming from Rich

I think the answer to the original question depends on whether you're talking about the "value" in just pure $ terms, i.e if the price is $84 a point now at what time will the price per dollar fall below $84 a point. In those terms I'm not convinced that will occur even with just a couple of years left. It will depend on what hotel room inflation does but if, in 2040, a room costs say $3000 a night and dues are $20 (assuming 10 points for a room for easy maths) it leaves a difference of $1000 between a cash booking and dues costs giving a "theoretical" value of the points of $100 a point.

If you're talking about the "purchasing power" of a future contract being more or less value than the $84 that a point currently cost (i.e. the $cost of a point maybe, pick a figure, $150 per point in 2025, but $150 in 2025 buys you less than $84 does now) If you take inflation and purchasing power into consideration I think it will start to fall in 12-15 years. But even taking that into consideration, it will still give owners a large saving on their accommodation costs.