But cash price should be a floor. The saying they go to zero value is a sloppy way of saying the contract ends. But they all end. As long as the contract is valid, it is still a room and has some value based on Rack rates.
I'd amend this slightly: they have some value based on
prevailing rates. If Disney has to discount rooms to get them to move, rack doesn't matter. Prospective renters will be comparing to the rates they'd pay, not list price.
There will also always be a gap between prevailing rates and
DVC rentals, because the latter come with additional risk to the renter. The brokers have ameliorated that somewhat, but they can't close the gap entirely.
Likewise, there will always be some gap between the "worth" of a contract on the resale market and the "value" of those points compared to prevailing rates. That's because cash is king when it comes to flexibility, and points can only reasonably be spent on DVC lodging. A buyer is giving up some flexibility in exchange for the discount. Without a material discount, why bother buying?
but once the MF's get above the rack rate per year
I think this is extremely unlikely to happen at WDW, even transiently, and even considering prevailing rates rather than rack. Dues are legally obligated to be set at the cost of operating and maintaining the resort. Therefore, they tend to track "real" inflation pretty closely. Hotel rates are not based on cost; they are based on supply and demand. Historically, Disney's hotel rates have gone up at least at the rate of inflation, and typically just a bit more than that IIRC. Disney's hotel rates would have to drop by quite a bit to meet the Dues number, even on the least desirable rooms.
For example: one of the worst "values" in the system (comparing points cost to rack rate) is a 1BR at SSR in Preferred. The Dues cost on a week in that unit in what used to be called Magic Season is about $2,150 (274pt * $7.8622/pt). The lowest rack rate for a week on that room in that season is pushing $6K. There is a lot of room for Disney to discount that room and still leave value for an owner.
The "f
ly in the ointment/monkey in the wrench" (NSFW language) is where the supply and demand
for DVC rentals goes. The number of people who both know about DVC rentals and are willing to take on their risk is smaller than the pool of Disney visitors in general. There are an ever-increasing number of owners. If a larger fraction of them start to rent out and/or a smaller pool of guests are willing to rent from them, prices can go sideways quickly.
We saw that in reverse during the post-COVID run-up. Rental prices had been relatively static prior to the pandemic, and then all heck broke loose afterward. In the intervening time, a WHOLE LOT of people have been buying with the intention to rent out some or all of their points, based on the chatter on these here boards. It seems likely that the pool of landlords has already gone up. Will the pool of renters keep pace? There are at least some signs that the answer is "maybe not."
And, ultimately, the (financial) value of owning a DVC point is not (only) defined by the prevailing rental rates from Disney. It is also defined by the prevailing rental rate from an Owner.
All of this is a long-winded way of saying: don't get too wrapped up in whether or not DVC is saving you money.
It isn't. Instead, it is a way to force yourself to go on more and better vacations.
