Will DVC value bounce back?

[Dean]

You are right that the VB dues are higher, but $1.50 to $2 per year. But if you can buy the VB contract for $30 less than another contract, then it will essentially take forever to catch up. I'm not sure when, accounting for interest, it ever will.

Once the expiration date of a contract drops below 30 years then the fact that it is going to expire into nothing starts to be a factor. But, at this point it is still a small factor. The EPCOT resorts and so much better than the Siberia resort that I don't think the earlier expiration date will hurt until about the year 25 mark.

It's been a while since I've run the math related to the time value of money and I'm not where I can right now but there is a point with the current differences where one will erode all of the savings and start to pay more, assuming the differences stay relatively the same. That point should be somewhere in the 12-15 years out assuming a $20 a point difference and $2 a point or 20% higher fee. That's why I feel that a max $25, or $30 difference, is the current break point. It puts you close to break even at the end with those same other assumptions. However, I think giving up an 11 mo option is even larger than the price difference if WDW is the goal.

 

[LSchrow]

You are right that the VB dues are higher, but $1.50 to $2 per year. But if you can buy the VB contract for $30 less than another contract, then it will essentially take forever to catch up. I'm not sure when, accounting for interest, it ever will..

figure dues at VB are $7.12, between $1.50 (BLT) and $2.89 (BWV) higher than WDW DVC resorts - so figure paying about $2 per point more at VB (round number for ease of calculation). if you bought a conservative 200 points, you would pay $400 more per year in dues. if you kept the contract through its expiration of 2042, you would have paid $11,600 MORE just in dues, or aboout $58 more per point over the life of the contract. even if you were able to buy VB at $30, you would still be paying almost twice what you would have paid out at contract expiration had you bought a resort with lower dues. (note that i figured dues first due in 2013 - 29 years total).
of course, there are variables: inflation, economic downturns, investments, possible resort damage, full moon, etc.
simply, one pays much more in dues than on the initial purchase price, assuming the contract is not sold early. and if you decided to sell VB, that extra money spent on dues is gone vs getting a higher point price on a contract.
if you intend to use those points at VB, go for it - there are times you will need to own there. however, if you intend to stay mostly at WDW, spend (MUCH) less money, and know that you will most likely get the resort you bought at, when you want to stay there (using the 11 month owners' window).

btw, i "did the math" when we bought our first contract almost 14 years ago (BWV), and again on our next 2 contracts (BCV & SSR), all direct through DVC. we have certainly gotten our money's worth out of each, especially as we would have been going anyway, paying cash for a resort we would be "settling" for. we intend to sell our BCV contract eventually (not big fans of the resort), but only to invest in more BWV points - resale .

hth

 

[OrangeCountyCommuter]

I would assume that the kind of resale prices you are seeing are likely to be around for some time even if we get that continuous, very slow improvement in the economy that Democrats are are taking credit for and trying to spin as something as great as the invention of sliced bread. We have now reached the threshold for the resorts that end in 2042 for which buyers have to have second thoughts about buying because of the end date and thus it is questionable those can improve at all even if the economy does miraculously improve significantly within the next few years.

Nevertheless, if you are considering buying to stay at WDW I would have second thoughts choosing VB over a WDW resort. VB has the highest annual dues (almost $3 more per point than SSR) and that can make it far more expensive in the long run than some WDW resorts, particularly SSR or OKW which have fairly low resale prices now. Moreover, best value, if you don't need 11 month window, goes to SSR in that situation because it has a 2054 end date.

Can you please take your political junke to the Community Board where trash talking is encouraged ?

 

[DougEMG]

I also don't think most prospective buyers really appreciate just how much the resale prices have declined in recent years. Here's an actual example:

I purchased SSR in 2005, for $83.33 per point. I sold that contract in 2011 for $62 per point. Deducting the 10% sales commission ($6.20), I had a net of $55.80 per point. That's a loss of $27.53 per point in 6 years -- a 33% loss.

[Note two things: 1) I got a considerably higher price than many sellers, and 2) SSR is currently selling for WAY less -- looks like around $50, although there is considerable variation in prices]

*****
If we want to speculate a little, when you look at buying direct today the numbers are REALLY desperately BAD.

For example, if you buy BLT direct the current price is $165 with a maximum incentive of $12 per point. So if you buy the required number of points for max incentive, you are paying $153 per point. BLT is currently selling and clearing ROFR at $90 or less on the resale market.

So the day you close on a BLT direct contract, you can figure you've lost about $72 per point ($153-$90-10% commission of $9 per point).

If BLT follows the pattern SSR followed above (and I think that's a valid assumption), you would figure that BLT prices would go down 33% in six years. So six years from now you'd expect to net $60-$6 = $54. In other words, in six years, you'd lose almost $100 per point from your original purchase price (direct at maximum incentive = $153)!

All of which makes buying resale a very attractive option.

 

[DougEMG]

OK. I guess I always have to be contrary.

I think when the economy recovers and the resale market dwindles back to more normal selling levels, we will see resale prices reconverge back closer together for all resorts, which will likely mean a rise in cost of the now lower priced resorts. I think market prices are skewed right now because of the dumping going on for people having to get out for one reason or another.

I think there are some real bargains out there right now on the resale market, and if I had the cash laying around, I would be sucking up several hundred points right now. As it turns out, the economy has taken a toll on me too and I just don't feel like it's a good place to dump funds right now. My gut tells me that it actually is a good investment right now, given the low pricing, especially at SSR and OKW. That investment takes a leap too though because it bets on the continued viability of the rental market. That too will change as the American economy recovers, IMO.

With resale points renting for around $12, it doesn't take long to recoup one's investment at a $50/point resort, even given annual dues. After 4-5 years, it's all profit except for the dues off the top.

I kind of agree with you. The only place I'd disagree is that I think SSR and OKW prices aren't as good now as they were earlier in the year. I've actually started looking to pick up some more contracts and the pickings are rather slim right now at the price I want to pay.

 

[DougEMG]

My feeling is one should be the cheapest resort (accounting for variables) that one will be happy staying at most trips. Because of a lack of 11 month window and maint fees, I don't see the risk/compromises with HH/VB as being worthwhile to use at DVC. My view is that one would need to be at or under $25 currently for the risk to be worthwhile, even then only for those comfortable at being under 7 months out.

I agree.

As I only want to stay at WDW, off site resorts have never interested me.

 

[webcs]

Will DVC values ever bounce back.

Simple answer really: NO.

Its not a stock and its not a house. It is by its very nature an item that goes down. Its supply and demand. The only thing that would make it go up is if Disney announces a delay in a DVC project or no more DVC projects. I dont see that happening as they have room for plenty more.

And then after 40 years they get to sell the same places again OR rebuild. Its brilliant really.

Not in our lifetimes.

 

[PhillyCPA]

Can you please take your political junke to the Community Board where trash talking is encouraged ?

Couldn't agree more!

 

[sweetdana]

If VB is okay to stay at.. buy there if not buy anywhere at DW you are okay "being stuck". OKW and SSR are great values and IMO AK is coming down quickly and will be in the same range within a yr or 2.

I do not think you will see increases (at least not bunches.)

I would not rec. buying VB unless you are really okay staying there.

 

[WilsonFlyer]

I know people sometimes hate when we bring this up, but I also think this is one of those occasions where we must also bring up another unpopular fact.

Your POS and purchase agreement (that you signed as an owner) only guarantee you the ability to book at your home resort. Nothing else is guaranteed. Would DVD ever go back on the way things are? I don't know. I didn't ever think they'd change what resales could be used for to be different from what direct buy points could be used for either.

It all depends on how much of the kool-aid you drink. I use to drink a lot. I now have a new-found affinity towards water. Ya gotta be able to seperate business from mouse ears and pixie dust. I'm in a 12-step program but I believe that I am progressing quite nicely now. I now enjoy my DVC while not being blinded by pixie dust. I find it doesn't hamper my ability to enjoy all things Disney at all.

Edited to add: (And this is obviously just my PERSONAL belief...) IF and that's really not an "if" so much as a "when"; one of the beach resorts detatched from WDW gets hit by a major hurricane, I think this will especially subject these resorts to being somehow isolated from the system. Even if they rebuild, DVD will have to contend with all the owners (and non-owners) now wanting to use their points ALL at on-property resorts while the rebuild goes on. We all know DVC is, by design, to be at capacity all the time. It's going to create quite a problem when it happens. We shall see.

 

[Sammie]

Honestly there is just never a definite answer for every given situation. If you can't book earlier than 7 months due to lifestyle or jobs, then other than purchase price or dues it really does not matter where you own.

I have stayed at all the DVC resorts and they all have positives and negatives about every single one. You simply have to decide what your wants are, which will be personal only to you.

Fact is that even though some would have you think SSR is in outer Mongolia, it actually is "closer" to all parks than VWL, BLT, BCV, BWV, and AKV. Those resorts are close to one park or in the case of BCV and BWV, two parks but SSR and OKW are close to everything and all the parks. That is not opinion, that is fact based on actual mileage. Now certainly if you have a huge aversion to buses, you have to consider that. But if you wish to visit all parks at some point you will either have to drive yourself or take a bus irregardless of where you stay.

As you age dues will definitely be something you think more about than purchase price. 50 years is a long time to be paying something.

As to Vero being wiped out by hurricane, sure it could happen, but BCV could burn down due to all those crock pots, Forman grills, etc.

So unless you are wanting to book Beach Cottages at Vero, I would say SSR is the best value for the long term use.

Personally I would never buy at a joint DVC-nonDVC resort, as I do not think management takes as much care in them as the stand alone DVC resorts. For example look at SSR, new fire pit, new pool and counter service, new complete rehab of rooms. The rooms at BCV and VWL are older than SSR but they did not get the complete new rehab.

 

[WilsonFlyer]

Do you consider Kidani and BLT "joint?" Just curious.

 

[Dean]

I agree.

As I only want to stay at WDW, off site resorts have never interested me.

Have you ever tried it? I was locked in to DVC as well but I will tell you that my experience is that many off site resorts are nicer, have more amenities (other than the parks), have more activities and the system is often far more responsive to the guest than the on site resorts. We do enjoy DVC but I've never stayed off and found myself wishing I was on site, at least not since I've known about timeshares. If you've never tried it and you have a trip where you don't have a lot of park time planned, I'd suggest you give it a try sometime at a top resort.

 

[Dean]

Honestly there is just never a definite answer for every given situation. If you can't book earlier than 7 months due to lifestyle or jobs, then other than purchase price or dues it really does not matter where you own.

I have stayed at all the DVC resorts and they all have positives and negatives about every single one. You simply have to decide what your wants are, which will be personal only to you.

Fact is that even though some would have you think SSR is in outer Mongolia, it actually is "closer" to all parks than VWL, BLT, BCV, BWV, and AKV. Those resorts are close to one park or in the case of BCV and BWV, two parks but SSR and OKW are close to everything and all the parks. That is not opinion, that is fact based on actual mileage. Now certainly if you have a huge aversion to buses, you have to consider that. But if you wish to visit all parks at some point you will either have to drive yourself or take a bus irregardless of where you stay.

As you age dues will definitely be something you think more about than purchase price. 50 years is a long time to be paying something.

As to Vero being wiped out by hurricane, sure it could happen, but BCV could burn down due to all those crock pots, Forman grills, etc.

So unless you are wanting to book Beach Cottages at Vero, I would say SSR is the best value for the long term use.

Personally I would never buy at a joint DVC-nonDVC resort, as I do not think management takes as much care in them as the stand alone DVC resorts. For example look at SSR, new fire pit, new pool and counter service, new complete rehab of rooms. The rooms at BCV and VWL are older than SSR but they did not get the complete new rehab.

I doubt VB/HH will separate or be wiped out by a natural disaster but I believe the risk is more that they could (either). IMO, if one can't plan at least 7 months out most of the time it's a real question whether they should own DVC.

 

[majortom1981]

I doubt VB/HH will separate or be wiped out by a natural disaster but I believe the risk is more that they could (either). IMO, if one can't plan at least 7 months out most of the time it's a real question whether they should own DVC.

From my experience it takes the same amount of time to get to epcot,magic kingdom , and Hollywood studios from Saratoga and Animal kingdom.

My wifes parents have Saratoga points and I have kidani points. I have stayed in both a lot. Take into account that if your at the first pickup spot in Saratoga it can take 10 min just to get out of Saratoga before even getting onto the main roads.

 

[Sammie]

Do you consider Kidani and BLT "joint?" Just curious.

Yes. Any resort where there is a large Disney resort presence.

 

[WilsonFlyer]

Yes. Any resort where there is a large Disney resort presence.

Interesting perspective. I've never thought about it from the standpoint that stand-alone DVCs may be more likely to receive major upgrades and advanced refurbishments. Interesting observation and looking back, I can't exactly say that I could argue differently.

 

[KAT4DISNEY]

The rooms at BCV and VWL are older than SSR but they did not get the complete new rehab.

Did SSR really get much more than what BCV and VWL have gotten with their refurbs? They deviated with it by redecorating and not just replacing the old with a new exact copy (although VWL got some new material too replacing the old black/white checked chair ), but when you get down to it those 3 have all only been painted and gotten soft goods and in some cases new tv cabinets or lamps.

But until they start actually redoing bathrooms and full kitchens I'd say that no resort has gotten a complete rehab.

 

[keishashadow]

"Will DVC value bounce back?"

'my' DVC has grown in value as to the level of enjoyment my family has experienced since we've purchased into it.

I saved discretionary income vs financing to purchase slowly over the years, might feel different if i financed. We bought where we wanted to stay but enjoy the option to book the other resorts. If that goes by the wayside then perhaps the resale of our 'popular' resort DVC points will increase on paper but we'd never sell outright unless we'd be replacing them with more points at a different DVC resort(s) that catches our fancy.

We never considered DVC as a financial investment, moreso an entertainment expenditure that has reaped more rewards than anticipated.

 

[LSchrow]

"Will DVC value bounce back?"

'my' DVC has grown in value as to the level of enjoyment my family has experienced since we've purchased into it.
.............We never considered DVC as a financial investment, moreso an entertainment expenditure that has reaped more rewards than anticipated.

well said
and before anyone mentions kool-aid, it is possible for other people to like different things than oneself without automatically dismissing "the others" as brainwashed. many people, including us, did not spend tens of thousands simply because a stranger told us it was a good idea - we researched it, found it fit our needs, and have since found buying DVC to be the good "investment" in our future we had hoped it would be.
my favorite color is periwinkle. does that mean if the popular color this year is periwinkle, i have fallen prey to popular opinion? no.....it just means i might be different than you, and for reasons of my own, i just prefer periwinkle.

again, nicely said, keisha