Small contracts value in 5-10 years

[zavandor]

Until now, small add-ons are quire rare so when they come on the market they are often snatched at a premium price by someone willing to enter in the system with minimal investment or top up their contracts with a small add-on without paying premium direct prices.

But now the situation has changed. I've already read a lot of thread of people saying they are going to search for a resale contract and then do a 25 points add-on to get the benefit.
Also, if someone is looking to add-on a few points but doesn't have the benefits yet, it makes sense to go direct instead of waiting for the right resale contract to show up for sale.

So in 5-10 years, as people who are now purchasing small add-ons start to sell, there will be higher offering for small contracts and less demand. Will their value start to plummet? Instead of selling for a premium, they might sell for less than a medium sized contract, also because closing costs are higher (per point).

 

[Dean]

Until now, small add-ons are quire rare so when they come on the market they are often snatched at a premium price by someone willing to enter in the system with minimal investment or top up their contracts with a small add-on without paying premium direct prices.

But now the situation has changed. I've already read a lot of thread of people saying they are going to search for a resale contract and then do a 25 points add-on to get the benefit.
Also, if someone is looking to add-on a few points but doesn't have the benefits yet, it makes sense to go direct instead of waiting for the right resale contract to show up for sale.

So in 5-10 years, as people who are now purchasing small add-ons start to sell, there will be higher offering for small contracts and less demand. Will their value start to plummet? Instead of selling for a premium, they might sell for less than a medium sized contract, also because closing costs are higher (per point).

My opinion, as I've said a number of times, is the idea that smaller contracts will be worth proportionately more long term is a risk at best. There are a lot of things that could happen to reverse the trend. What if DVC quit combining resale contracts which they could do? I still feel it worth having smaller ones if they don't cost extra because it does give some additional long term flexibility, I just don't think it's worth paying more for. Now once you get to around 200-220 points a contract, I think there is less risk and the risk of having a larger single contract increases. That means one would need to be around roughly 400 points or more before I'd suggest breaking up the contracts just for the purpose of avoiding a larger one. Obviously there are other reasons to have different home resorts or even UY. One just needs to look at the overall situation. Put another way, I see it like I would any specialty insurance, a poor investment for that purpose.

 

[a742246]

Many people like to have smaller contracts compared to one large contract for the possibility of downsizing in the future or giving it to their children. That's a benefit! (this was me).
Many people only want to travel to WDW once every two- three years, so a 50 point contract can serve the purpose. That's a benefit! (this started out as me).
Many people can not afford a large contract or they only have enough cash on hand to buy a small contract. With an idea of buying more in the future. (this was me).
I did not buy a small contract for the benefits or perks that came with DVC. If I paid 500 more for a small contract and use it for 20 years and sell it for the same price per point as a large contract, the prorated loss comes to $25.00 a year and I can live with that.

So to answer the OP question "will the smaller contracts lose value per point faster than the larger contracts over time?" I do not believe they will for the reasons I stated above.