So is it a bubble

[Katie L]

I think if SSR is your preferred resort I wouldn't worry about prices spiking. The average sales prices for SSR (according to one resale broker) for Jan, Feb, & Mar were $91, $95, $92 respectively. I'd personally be surprised if avg sales price for balance of the year varied more than $5 from that range.

I'd look at how many times you plan to vacation at WDW in the next few years and what you'd spend on accommodations. Compare that to if DVC will save you money (or at least allow you to upgrade your accommodations) and compare that to the financial freedom of no car payment. But in your case, i don't think I'd base the decision on the fear that SSR trades north of $120/pt in the next year.

Which every way you go good luck!

Yea, practical usually wins out over here. Overnight I think I've decided to wait on Disney. I keep reminding myself of how I felt when I paid off my student loans 8ish years early.

Disney is a luxury. We will get to luxury - not as quick as I'd like - but maybe by the time we are there, there will be a recession and prices will plummet. lol Not that I wish for that... but I feel like we are overdue for a stock correction and recessions usually come every decade... hard to believe its been a decade since the fear of 2008. It's crazy to me how recession-proof Disney vacations are - even if DVC is not.

 

[igrsod]

I can only hope that we curb climate change through behavior changes, such as replacing hummer H2's with smartcars, etc. With that said, even worst case scenarios only have Miami and New Orleanes going completely under. The rest of the gulf cost is high enough above sea level that the ocean only moves in like 5% of the state of Florida. Really, if Miami literally disapears, trips to Disney will be the least of my concern, but will still technically be possible.

I like your thoughts, but personally, think we have pushed the environment past the tipping point, and current government does not seem to put any value in trying to make any positive environmental change. I sadly see this as the beginning of the end, and I'm normally a very positive and optimistic person. I sincerely hope my gut feeling is wrong.
On a positive note, I love going to WDW and will enjoy it as long as I can.

 

[Ben E N]

I like your thoughts, but personally, think we have pushed the environment past the tipping point, and current government does not seem to put any value in trying to make any positive environmental change. I sadly see this as the beginning of the end, and I'm normally a very positive and optimistic person. I sincerely hope my gut feeling is wrong.
On a positive note, I love going to WDW and will enjoy it as long as I can.

Yes, I agree with you there. I have the fun job of having 150 middle school students reach that same conclusion at some point as I teach this topic every year. Still, it's best to plan for the worst, but hope and try for the best.
As for Disney, I agree. They at least seem to be trying to acknowledge the problem by building solar farms, recycling their water, and having their monorails not run on gas. It may be more for show, but it adds to the "feel good" theming of their park. Now if only they would pay their staff a better wage...

 

[Matty B13]

I would like to see Disney start composting their food waste, I think that would make a huge dent in the problem, and save them money at the same time. It amazes me how much food is just wasted at WDW.

In my area it's becoming a very profitable business.

 

[CraigInPA]

I would like to see Disney start composting their food waste, I think that would make a huge dent in the problem, and save them money at the same time. It amazes me how much food is just wasted at WDW.

In my area it's becoming a very profitable business.

The best use for food waste is for feed to other mammals. Historically, "garbage" (food waste) was saved separately from "trash", and picked up by pig farmers. There was an excellent "dirty jobs" episode a few years ago where the waste from the las vegas casinos was taken out to a pig farm nearby, cleaned of non-food items, boiled, shredded, and then served to the pigs.

 

[Matty B13]

The best use for food waste is for feed to other mammals. Historically, "garbage" (food waste) was saved separately from "trash", and picked up by pig farmers. There was an excellent "dirty jobs" episode a few years ago where the waste from the las vegas casinos was taken out to a pig farm nearby, cleaned of non-food items, boiled, shredded, and then served to the pigs.

That is true, but I don't think there are enough pigs in Florida to consume the food waste that WDW produces.

A few dairy farmers in our area have built anaerobic digesters to produce energy using manure, food waste, and diary produce waste. One of the farms is in it's 4th generation and thinks this will let them pass on the farm to future generations with no problem. Almost all of the diary farms in my area have disappeared, so this was great to hear.

Another family farm has completely converted over over to composting food & yard waste from the town and the local university. It's nice to see these family farmers able to make a living and pass on their farms.

 

[Littlelulu01]

I relate Pricing of Dvc to cash prices of hotel rooms. Every economic downturn results in better deals for travel, including Disney. If I can get a screaming deal on a cash reservation when the economy enters next downturn, the value of my Dvc on a resale market is going to be much less than it’s worth today. That’s bound to occur at some point. Disney hotel price is high right now and so is Dvc retail and resale.

Ability to pay upfront cash and chalk up to vacation budget is key to not getting burned. similar premise to any luxury purchase.

I also wonder how the effects of global warming in the coming years will affect the value. Likely increases in weather related events will lead to increases in special assessments. I think Florida has a pretty high potential to have some serious fresh water issues in the next 10-20 years. Those two likely issues will undoubtedly change the value of Dvc but I think disney itself is going to adapt to coming change.

 

[Ben E N]

I relate Pricing of Dvc to cash prices of hotel rooms. Every economic downturn results in better deals for travel, including Disney. If I can get a screaming deal on a cash reservation when the economy enters next downturn, the value of my Dvc on a resale market is going to be much less than it’s worth today. That’s bound to occur at some point. Disney hotel price is high right now and so is Dvc retail and resale.

Ability to pay upfront cash and chalk up to vacation budget is key to not getting burned. similar premise to any luxury purchase.

I also wonder how the effects of global warming in the coming years will affect the value. Likely increases in weather related events will lead to increases in special assessments. I think Florida has a pretty high potential to have some serious fresh water issues in the next 10-20 years. Those two likely issues will undoubtedly change the value of Dvc but I think disney itself is going to adapt to coming change.

There is so much rainfall in central Florida that I would be surprised if Orlando suffered from a water shortage. Warmer earth = Warmer oceans = More evaporation and precipitation close to them. Other climate change factors will negatively affect them, but o actually anticipate more local rainfall.

 

[viper17d]

I would just reiterate that the primary consideration for lower resale prices moving forward (outside of a major economic downturn) is the time remaining on those 2042 contracts. I don't think it will really start hurting prices until 2022 (at the earliest), but we just don't know if an extension option will be provided or if they will be allowed to lapse so DVC can refresh and resell those resorts.

I think you can gather from those here that prices are not expected to go down in the near term. It happens on occasion for various reasons, but there's nothing today that should make you think that. If you're thinking about getting into DVC, you need to make a point-in-time decision as to whether it is the right decision for you at the current prices. Speculating one way or another will generally only frustrate you in the end and while we all think prices are stable (and/or increasing due to the park improvements) one should never buy into DVC solely because of that expectation.

While it won't happen, if resale prices went down 90% from where I bought in and I had to practically give my contract away, I'd be OK. I went into DVC with the expectation that I would enjoy my ownership long enough to justify the expense. Obviously, life happens to all of us and things change, but try not to make decisions worrying about where resale prices have been and will go.

 

[longboard55]

I do not think its a bubble, its rising prices that are not going down.

 

[Bing Showei]

I do not think its a bubble, its rising prices that are not going down.

Said the mortgage lender in 2007.

 

[Dean]

we are considering buying in via re-sale- I’m looking at the price increase YoY of like 25% on older resorts and I’m just wondering opinions from you long-timers. Do you think we are in a bubble? A recession would bring the prices back down - anything else that you think would?

What I see on the horizon are just more reasons for value to increase - but sustained 25% yoy seems impossible.

Thoughts?

I think prices are artificially high right now but not to the extent of calling it a bubble. Things will certainly pull back at some point but likely not enough to justify waiting to time buying in. Once one is sufficiently educated to be ready to buy, I wouldn't wait if buying truly makes sense (plan at least 7 months out, use points only at DVC, pay cash, OK with the compromises of a timeshare).

I'm trying to figure out if we should pay off the car (Dave Ramsey plan) or ignore Dave Ramsey for the mickey mouse plan. lol

I will get pretty mad if these $100 SSRs are $145 next year.

My core recommendation is always to be consumer debt free and pay cash but as a minimum you want to be on solid ground with a plan moving toward being debt free and pay cash for any luxury purchase and DVC is an ultra luxury item.

 

[rg35]

Umm, I believe Ford basically stopped building cars because SUV and truck demand is so strong now that $4-5 gas is a memory. And no matter what we do, China and India will have a big say in pollution levels over the next decade or two...

These are not 90's era SUVs they are building though. They're mostly crossover vehicles that get better MPG than the sedans they are replacing.

 

[longboard55]

Is the amount of inventory being put on the market increasing at a faster pace. Not from what I can see. The Disney formulae these days seems to be better rather than more. Like this year the release 3 movies and get 32% of the market. I would guess better hotels not more hotels

 

[CaliAdventurer]

These are not 90's era SUVs they are building though. They're mostly crossover vehicles that get better MPG than the sedans they are replacing.

It’s because of government loopholes that reward a the car maker by size. So they are building bigger cars because it’s more profitable.

 

[Ben E N]

These are not 90's era SUVs they are building though. They're mostly crossover vehicles that get better MPG than the sedans they are replacing.

Ford is also not dropping cars because their trucks are so awesome, they're dropping cars because their stock is tanking and they cannot compete with overseas cars, so they are scaling back. It's a sad thing for Ford, not a happy thing.

 

[jodifla]

As long as Disney has Star Wars and other upgrades in the pipeline, I think the prices will stay sky high. After that, it's anyone's guess based on the economy.

For me, I'm glad we bought in at $62 direct 22 years ago without hesitation -- even though we had the audacity to finance our luxury.

 

[Littlelulu01]

There is so much rainfall in central Florida that I would be surprised if Orlando suffered from a water shortage. Warmer earth = Warmer oceans = More evaporation and precipitation close to them. Other climate change factors will negatively affect them, but o actually anticipate more local rainfall.

I was thinking about the water table and rising sea levels affect on fresh water supply. Long term, if sea level rises and breaches fresh water, then the fresh water is no longer there. A real threat to Florida water supply. Some scientists say 10 years. Some politicians say nothing to worry our pretty lil heads about.

Another slight issue is that When the fresh water table gets used more rapidly than replenished voila- a sinkhole. This can affect roads, hotels, homes....

Those two seemingly plausible yet debatable scenarios aside, the potential for increased weather related events and resulting special assessments are very real. Ssr had a special assessment after storm last year.

Bottom line- I’m just not sure that amortization of the initial purchase cost of owning Dvc over 50 years is a great way to think about a vacation plan. Not that owning Dvc is a bad thing, just that initial buy in should pay for itself in savings over the next few years. Anything after that and it’s just mf’s.

 

[Littlelulu01]

For comparison sake of, “if only I had purchased way back when...” say you purchased Dvc back in 1994 at $62/point. That’s equivalent to purchase of $104 today adjusted for inflation. Old key west is available at this price on resale market today and so in that sense you get $ back and had 25 years of vacations at the cost of mf’s. Had you sold a couple years ago though the scenario would have been less favorable and adjusted for inflation, it was a loss. Now take the $62 in 1992 and put into investment instead of Dvc. That $62 is equivalent of $850 today. Still not the worst thing considering 25 years of vacation for cost of Mf’s but also not the best way to invest a chunk of cash. The 250 point contract was $15,500 purchase price in 1994. Had just that chunk of change been invested instead of paying upfront for Dvc it’s worth 212k today.

Finance of a purchase and no matter when you have purchased and at what price, it’s a big financial hit and risk. Dvc is for fun. It’s not an investment. Dvc clearly states that all over their website. Above just looks at the last 25 years. Purchased at direct prices today and the next ression I could see a worse outcome for Dvc compared to the last recession.

All this negative talk and I still wanted Dvc. My husband is a banker and VERY against timeshares, even Dvc. I ended up purchasing as I could with cash and by using $ I would have otherwise spent on more expensive vacations. Some resale and some direct. I get an intrinsic reward from the ownership and am happy with it but to each their own. I know it’s not the best use of money but Disney does it better than anyone when in comes to desire to part with my $.

 

[Ben E N]

I was thinking about the water table and rising sea levels affect on fresh water supply. Long term, if sea level rises and breaches fresh water, then the fresh water is no longer there. A real threat to Florida water supply. Some scientists say 10 years. Some politicians say nothing to worry our pretty lil heads about.

Another slight issue is that When the fresh water table gets used more rapidly than replenished voila- a sinkhole. This can affect roads, hotels, homes....

Those two seemingly plausible yet debatable scenarios aside, the potential for increased weather related events and resulting special assessments are very real. Ssr had a special assessment after storm last year.

Bottom line- I’m just not sure that amortization of the initial purchase cost of owning Dvc over 50 years is a great way to think about a vacation plan. Not that owning Dvc is a bad thing, just that initial buy in should pay for itself in savings over the next few years. Anything after that and it’s just mf’s.

I agree with all you stated. As DVC owners we have three immediate climate concerns - summers will be hotter, rain will be more intense, and sinkholes will be more frequent. That last piece hopefully will not impact Disney too much, because sinkholes are a pretty local occurrence based mostly on overdrawing water in a local area, and hopefully Disney is too responsible to do that.