15 Year Extension at OKW for $25 per point

[pilferk]

Ah, but the question is what value the resale market will put on years 2042-2057, not what value Disney can make up for those years. If the current difference in resale value between OKW and SSR is mostly due to the extra years, then the resale maket is putting a price of $5 on years 2042-2054. At most, the market would value 2055-2057 for $1 total.

Note - if you do want to value 2042-2054 via Disney prices, it's $92 vs $94 currently.

Again, speculating and using numbers YOU like to bolster it...which isn't any different than what I did, really.....right?

You're "assuming" the difference is entirely about ending date. I'm not sure that's a safe assumption.

As for Disney's prices, I'd say they're MORE fuel for the fire that OKW will sell for MORE than SSR does, currently. Again, you're "assuming" the only difference is ending dates. Are you SURE about that? I'm certainly not.

You're also comparing a "promotion" price to an actual retail price. The REAL difference (since the promo is a subsidy only there until SSR sells out) would be $104 to $92....a difference of about $12. Close to the $1 per year I came up with.

However, you don't need to own at OKW to take advantage of those larger rooms or smaller point values. There are almost always OKW rooms at the 7 month mark. Have we ever had reports of somebody not being able to get a Studio/1BR/2BR at OKW at the 7 month mark?

Ignoring ending date, the one advantage I see for owning at OKW over SSR is the ability to get a cheaper GV. Those are often gone at the 7 month mark, so you need to own at OKW if you want GV's. I'm not sure what kind of value the resale market will put on that - but I bet it will be pretty small.

Back to the addage of "buy where you want to stay". Having those advantages (size, value, etc) at your home resort should add SOME value to the points (and I think current resale prices show that resort "differences" DO add to the resale price). What value, we don't know, exactly, because there's no way to instantly make them "equivalent" in all terms BEFORE the extension goes into effect. You can "bet" it's pretty small....more power to you....but are you willing to gamble a significant amount of money (real or proceeds of resale later) on being right? I'm not sure I would. Luckily, I have the luxury of not having to make this decision.....

 

[Mtnman44]

Pilferk,

These arguments are assuming someone wants to use the points in question. That only comes into play 35 years from now. (Plus, SSR and AKV and CRV owners will still be able to use OKW villas). Remember, I'm talking about someone selling prior to the extended years so it's strictly about resale value. There's no reason that I can see to think that OKW will be valued much differently from SSR (plus or minus $5 per point, but likely less than SSR due to age of the resort).

People that are considering extending ONLY for resale value are basically making the timeshare (at least those extra 15 years) purely a financial investment. And what do we all say about timeshares being a financial investment?????

A couple things to consider on why SSR might not be "equivalent" to OKW:

1) OKW, with extension, will have 3 more years. Negligible difference, but considering, with the proposed subsidized price of $15 ppt for the extension, you'd think that would work out to about $3 per point difference (assuming you break down 15ppt / 15 years = $1 ppt per year).

2) OKW rooms are larger than SSR's rooms. That may mean OKW turns out to have a bit more value than similar SSR rooms.

3) OKW room take less points to book than SSR, meaning points are "more valuable" because they buy you more. That may put a premium on those points.

Obviously OKW is much older than SSR..the question is does the "age difference" offset OKW's advantages? I don't know....looks like the market will get to answer that question.

However, there's enough difference that I'm not sure you can draw a direct parallel between SSR and OKW. SSR might be a decent "jumping off point", but because of the above, I'm not sure it's safe to assume they're equal.

Edit:
The other issue, and we've talked about it before, is you don't know what will happen to 2042 contracts after the extension option is offered. It could be the resale price on those 2042 contracts drops...or that extended contracts go up...or a bit of both.

If it were simply a matter of ASSUREDLY paying $15 to increase resale value $5....you're right, it's not a good deal. The problem is..there's no such assurances...in either the increase in resale price OR in the price level maintenance of the 2042 contracts. You just don't know.....not in the immediate, and certainly not in the long term. All you can reasonably guess at is that it will have SOME effect. WHAT effect that is.....specualtion. And unless their is a clairvoyant lurking around that wants to help out, everybody is left wondering, with no real concrete answer.

 

[pilferk]

Pilferk,

These arguments are assuming someone wants to use the points in question. That only comes into play 35 years from now. (Plus, SSR and AKV and CRV owners will still be able to use OKW villas). Remember, I'm talking about someone selling prior to the extended years so it's strictly about resale value. There's no reason that I can see to think that OKW will be valued much differently from SSR (plus or minus $5 per point, but likely less than SSR due to age of the resort).

People that are considering extending ONLY for resale value are basically making the timeshare (at least those extra 15 years) purely a financial investment. And what do we all say about timeshares being a financial investment?????

But you have to sell to someone who WANTS to use the points, right? So, my point is...those factors I mentioned have impact on the current (and future) resale prices...so assuming that OKW and SSR are equal might not be a solid assumption. I don't KNOW what effect they have because we've never had a 2057 OKW contract go up against an SSR contract. There's possible differentiation BEYOND just the "current years remaining" when it comes to resale.

FYI, the POS for "future resorts" specifically says that, when the ground leases on the "older" resorts expire, we lose our right to use them.

Also FYI, I 100% agree on the "timeshares being an investment" thoughts (as in, it shouldn't be considered one). I tend to tackle those discussions because they're prevalent, not because I view our DVC purchase that way.

 

[Mtnman44]

You're going to get the same return you were planning on before you ever heard about this extention. You're not losing anything by sticking with what you've got.

I guess if we assume we don't care about getting our initial investment of dollars back, then we are best off just selling for whatever price when we are done using DVC, and just be happy for having had the use of it for that long.

 

[salmoneous]

Again, speculating and using numbers YOU like to bolster it...which isn't any different than what I did, really.....right?

You're "assuming" the difference is entirely about ending date. I'm not sure that's a safe assumption.

Well, I'm assuming that the difference is mostly about ending date. The only other thing I can things I can think of are the 11-month window for the 1-2 days a year it is necessary at OKW, and the 11-month window for GV's. Is there anything else?

We know the market is putting a $5ish premium on SSR vs OKW. How would you split that out? How much do you think the resale market is valuing the 11-month window at OKW?

You're also comparing a "promotion" price to an actual retail price.

"Actual retail price" is what people pay. People pay $94 a point for SSR. If the promotion were a short-term, one-time-only thing I would agree with you. It's not. There is always a promotion. The price to use is what people pay, not a pretend number Disney uses as a sales technique.

Back to the addage of "buy where you want to stay". Having those advantages (size, value, etc) at your home resort should add SOME value to the points

It only adds value if you can't get reservations at the 7 month window (or anticipate not being able to get reservations in the future).

I'm curious - how to you think the market arrives at the $5 point difference between SSR and OKW? Obviously we don't know, but you seem to have an opinion. What's your best guess? How much is due to the longer contract status, and how much do to the location difference?

 

[Mtnman44]

You're right, although I suspect ROFR might buy quite a few OKWs over the next few years. however, I don't think the preceived desireability of large rooms/low points affects market value much. It sure doesn't right now. OKW is the lowest resale value of all WDW DVC resorts. I don't think that is going to change. That's why I mentioned that SSR may be a good guage of the approximate value of extended OKW. 10 years from now, I don't think all of the sudden the market is going to shift its pattern. I think we know basically how all the resorts will compare to one another market value wise, what we don't know is the actual amounts. They are all pretty close anyway, within $10 per point usually for equivilant contracts.

But you have to sell to someone who WANTS to use the points, right? So, my point is...those factors I mentioned have impact on the current (and future) resale prices...so assuming that OKW and SSR are equal might not be a solid assumption. I don't KNOW what effect they have because we've never had a 2057 OKW contract go up against an SSR contract. There's possible differentiation BEYOND just the "current years remaining" when it comes to resale.

FYI, the POS for "future resorts" specifically says that, when the ground leases on the "older" resorts expire, we lose our right to use them.

Also FYI, I 100% agree on the "timeshares being an investment" thoughts (as in, it shouldn't be considered one). I tend to tackle those discussions because they're prevalent, not because I view our DVC purchase that way.

 

[pilferk]

Well, I'm assuming that the difference is mostly about ending date. The only other thing I can things I can think of are the 11-month window for the 1-2 days a year it is necessary at OKW, and the 11-month window for GV's. Is there anything else?

The things I mentioned but you wish to discount...other than that, no.

We know the market is putting a $5ish premium on SSR vs OKW. How would you split that out? How much do you think the resale market is valuing the 11-month window at OKW?

I don't know WHAT the market is valuing as differentiation between SSR and OKW. I can only point to ALL the differences that exist and say some combination of them must sum to the $5 difference. It's really all anyone can concretely do. Anything else is assumption and speculation.

"Actual retail price" is what people pay. People pay $94 a point for SSR. If the promotion were a short-term, one-time-only thing I would agree with you. It's not. There is always a promotion. The price to use is what people pay, not a pretend number Disney uses as a sales technique.

Actual retail price is the price legally quoted. A developer subsidy (which is what the "discount" is) might lower that price, but it's not the price. Look at what's required for a down payment. NOT the 10% of the "discounted" price...10% of the ENTIRE price. Witness the price paid ON YOUR DEED. It's not the discounted price. The price for SSR is $104. It might not be what you pay, but it's the retail price. Don't believe me? Ask the state of Florida.

And the discounts ARE a limited time thing. Witness the sold out resorts. When the resort sells out, the discounts end.

It only adds value if you can't get reservations at the 7 month window (or anticipate not being able to get reservations in the future).

I'm curious - how to you think the market arrives at the $5 point difference between SSR and OKW? Obviously we don't know, but you seem to have an opinion. What's your best guess? How much is due to the longer contract status, and how much do to the location difference?

Actually, I don't have an opinion. You all could be very right...it could be strictly years. Or it could be something else entirely. Or (more likely) it could be a combination of factors. I don't know. That's the point. Not knowing means you have to speculate, which sucks, quite frankly.

Remember, Mtn asked for reasons why OKW and SSR MIGHT not be equal. I gave him (and you) some. I KNOW they have some influence on the resale price...I have no idea how much because the market has yet to see the "product" we're all talking about....so I don't know what the market "assigns" as value for the differentiation. Neither do you. That's precisely my point. There are plenty of flies in the ointment, so to speak, that points to the fact there are OTHER factors, OTHER than years, that MIGHT be part of the differentiation.

Can you say, with 100% certainty, that the difference is 100% years?

You know you can't.

And you can't identify which portion is years, and which isn't.

That's the problem.

 

[Mtnman44]

Bravo! Well said. Yes Yes!

"Actual retail price" is what people pay. People pay $94 a point for SSR. If the promotion were a short-term, one-time-only thing I would agree with you. It's not. There is always a promotion. The price to use is what people pay, not a pretend number Disney uses as a sales technique.

 

[Mtnman44]

Pilfrek -

jsut FYI: I hope my comments don't come off as argumentative, I'm just in debate mode. I actually think we agree on the main thing, we are just emphasizing different "what if's". I think the most important point is that there is really no way to know exactly what will happen, re: resale values in the future. My point is that, due to this risk, there is little financial reason to pay $15 now in hopes of getting higher resale equity later. $25 per point now is DEFINATELY a waste, would you agree with that?

 

[salmoneous]

Can you say, with 100% certainty, that the difference is 100% years?

You know you can't.

Let's see if we can end this discussion with some basic agreement.

You and I both agree that the difference isn't 100% years. I think, but don't know, the other factors are small. You don't have an opinion on how much the other factors are worth, but just want to emphasize that what I think might be wrong. Again, I'll agree with that. So is there anything we disagree on?

 

[Dean]

But you have to sell to someone who WANTS to use the points, right? So, my point is...those factors I mentioned have impact on the current (and future) resale prices...so assuming that OKW and SSR are equal might not be a solid assumption. I don't KNOW what effect they have because we've never had a 2057 OKW contract go up against an SSR contract. There's possible differentiation BEYOND just the "current years remaining" when it comes to resale.

FYI, the POS for "future resorts" specifically says that, when the ground leases on the "older" resorts expire, we lose our right to use them.

Also FYI, I 100% agree on the "timeshares being an investment" thoughts (as in, it shouldn't be considered one). I tend to tackle those discussions because they're prevalent, not because I view our DVC purchase that way.

Given my experience with others timeshares, including RTU of differing expirations, I don't see any way that OKW will make up the $15 per point until fairly near the end of the contract. I think the only reason to extend at the rumored amounts are if you think someone you care about will benefit those 15 years OR you think the market will be depressed coming up due to the rumors. And that's my concern at present for all the 2042 resorts, esp if DVC holds back on ROFR. We shall see.

As for timeshares being an investment, they certainly are, and often they are a very bad investment. The reasons that the POS states they are not an investment is to set expectations and to protect the member from the buy now and sell later or rent for a profit scam that has been so common in the past. Obviously part of the investment is in none financial arenas like qualify of life but there is always a financial component. If not, no one would ever buy any timeshare including DVC.

 

[pilferk]

Let's see if we can end this discussion with some basic agreement.

You and I both agree that the difference isn't 100% years. I think, but don't know, the other factors are small. You don't have an opinion on how much the other factors are worth, but just want to emphasize that what I think might be wrong. Again, I'll agree with that. So is there anything we disagree on?

I think that's a fair depiction. Though it's not all about pointing out you're "wrong".....it's about pointing out different scenarios.

I just want to explain why I take the bent I do:

There are going to be LOTS of people deciding to take a pretty risky gamble, no matter what path they choose to take. When I see "absolutes" asserted, based largely on opinion, I think it's prudent to point those out.

Again, my original comment was to Mtnman, basically to point out why there MIGHT be differences between OKW and SSR that were NOT simply contract length. That way, those reading this thread...in hopes of finding some well reasoned discussion to aid their decision making process...see both sides of the coin.

 

[pilferk]

Given my experience with others timeshares, including RTU of differing expirations, I don't see any way that OKW will make up the $15 per point until fairly near the end of the contract. I think the only reason to extend at the rumored amounts are if you think someone you care about will benefit those 15 years OR you think the market will be depressed coming up due to the rumors. And that's my concern at present for all the 2042 resorts, esp if DVC holds back on ROFR. We shall see.

Without knowing what will happen with both 2042 and 2057 "versions" of OKW contracts out there, it's near IMPOSSIBLE to tell that. Can you give examples of "other timeshares" that have the SAME product out there with different expiration dates? I'm NOT well versed with other timeshares, and would like to see what the difference in resale prices are like...though even then, given DVC's performance in the market in comparison, it's probably not a GREAT indicator. But it's better than what we have now.

Also, we have no earthly idea what Disney is going to do with ROFR in relation to the two products. That's going to go a LONG way toward what type of difference we see, at least in the short term.

As for timeshares being an investment, they certainly are, and often they are a very bad investment. The reasons that the POS states they are not an investment is to set expectations and to protect the member from the buy now and sell later or rent for a profit scam that has been so common in the past. Obviously part of the investment is in none financial arenas like qualify of life but there is always a financial component. If not, no one would ever buy any timeshare including DVC.

When I say "investment", I think it's clear I mean "a financial investment with the goal of financial profit", rather than "a financial investment in a useable product with the goal of improving quality of life". So I think the point above is more about semantics than anything meaningful.

 

[tfc3rid]

As far as I am concerend I bought into DVC because I love Disney, love visiting and wanted to have a place to take my family, force me to take a vacation someplace other than my home and somplace to just 'get away'.

 

[salmoneous]

When I see "absolutes" asserted, based largely on opinion, I think it's prudent to point those out.

Again, my original comment was to Mtnman, basically to point out why there MIGHT be differences between OKW and SSR that were NOT simply contract length. That way, those reading this thread...in hopes of finding some well reasoned discussion to aid their decision making process...see both sides of the coin.

I don't think you give the other readers enough credit. Pretty much everybody who reads this sort of post understands that it's just one person's opinion, and that the person might be wrong.

 

[pilferk]

I don't think you give the other readers enough credit. Pretty much everybody who reads this sort of post understands that it's just one person's opinion, and that the person might be wrong.

Fair enough. Not right, but a fair opinion.

But pot, kettle, black.

My initial response was not to you, but to Mtnman.

So, if what you say is true....why comment on my response? I mean, if "Pretty much everybody who reads this sort of post understands that it's just one person's opinion, and that the person might be wrong", what's the point in pointing out why YOU think I'm wrong?

It's a discussion board. We discuss. Right?

It's not that I don't give readers credit...it's that I think discussing all the aspects is productive. It brings out all the nuances of the issue we're talking about. It explains not just that "it's an opinion", but what the opinion is based on. That lends insight into WHY someone is thinking what they are, not just offering up a blanket assertion that has little context to bolster it. If you disagree...simply don't read or respond to my posts.

Notice Mtnman ASKED A QUESTION in the post I initially responded to.

And we're WAY Off topic....lets drag this back on topic, eh?

 

[salmoneous]

It's a discussion board. We discuss. Right?

Of course. Have fun. If you want to follow up every one of my posts saying I might be wrong, go right ahead. But I'm pretty sure that anyone who's read any of my posts has figured that out already.

So, if what you say is true....why comment on my response?

My point has never been to comment on someone's opinion, but to offer my own opinion which sometimes disagrees with others.

 

[calypso*a*go-go]

I'll I know is that I will be too old to truly enjoy the contract if I pay for the extension and I don't want to burden my children with the who-knows-how-high maintenance fees that will be in effect...so it's a definite "no" from me!

 

[pilferk]

Of course. Have fun. If you want to follow up every one of my posts saying I might be wrong, go right ahead. But I'm pretty sure that anyone who's read any of my posts has figured that out already.

Um, just a quick point:

Note that my initial response wasn't to you. YOU, in fact, jumped on my post to Mtnman. I simply responded when you "talked" to me.

Ditto on the rest of it, though.

 

[CarolAnnC]

Ok this is a warning. This thread needs to stay on topic. We are only discussing the 15 year Extension at OKW for $25. We are not discussing who said what to who....

If you want to address anyone individually, take it to email. This discussion is open to all here at the DIS, and anything posted further not on topic will be dealt with. Thank you in advance for your cooperation..