What happens when Deeds Expire?

[Dean]

They may not, but IMO they better. With the Hawaii disaster, sales slower than anticipated at DRR, and the new one at the old river county (Reflections is it?) they can't afford the PR that will come with trying to sell new points at $230 plus and resales plummeting to $40. And once they stop buying back and the brokers/buyers see that, price's will drop like a rock.

I agree the MF's will be paid until the last year, but as of 2042 it all stops. Again, I'm not a numbers cruncher but I'm sure somebody here or on DISboards will come up with the % of DVC gross receipts that will be gone all at once.

They'll have a plan to extract as much as possible from whatever they do. Loyalty and past commitment will not enter in other than as it applies to the amount they can rake in.

 

[ljmiii]

22 years is a long ways off for the first deeds that expire, but I wonder at what point will those points become unsellable. Ten years out? Five years out? No one says value will drop off right now, but it has to happen.

"Unsellable"...2040 or so. "When will prices plateau before falling?"...my guess is around 2022. The economics of owning vs renting for stays at 2042 resorts is becoming untenable.

So buyers...or at least informed buyers...become limited to those who absolutely positively must stay at a particular time (e.g. Easter/Xmas) and want to do it at a particular resort. And have the means to make that happen while being insensitive to the anticipated loss.

BTW, '2042' is somewhat misleading since no 2042 points will be distributed (at least to current owners) and the party ends in Jan of 2042. So really 2041.

 

[ljmiii]

At some point, this discussion will need to take a serious turn, but I believe it is still too early. DVC will lose 100's of room all at once in 2042. Even if the underlying real estate is too valuable for timeshare usage, Disney can't possibly knock down that many buildings at once.

While the WDW 2042 resorts are beloved they are only 12.83% of the DVC points out there (counting Riviera). Not insignificant...but not all that significant either.

If they don't sell enough, can you picture the Beach Club with only 25% paying MF's? Disney can't fill that many rooms year round on a cash basis to cover the shortfall...

Each resort is different. BCV is but a small part of the money making machine which is the Beach Club/Yacht Club - home to corporate events, weddings, and well heeled vacationers. I don't see DVD (or WDW after 2041) having any trouble renting out those rooms. Similarly, I don't see DVD having much trouble selling new 2092 BWV contracts given the location. All they need is a new underlying lease - no need to knock down anything. BRV is more of a problem child - the MK resort not on the Monorail (nor walkable to anything). But it is tiny - only 2.55% of DVC.

All that speculation will affect the pricing for resales as 2042 gets closer. I would think Disney would have to publicize their plan by 2027 to get on top of the possible exit stampede. 15 years or less left and owners will start dumping to try and get some value if they truly believe it will all end in 2042.

For every seller there will be willing buyer through 2040-ish - the only question is price. And as we've seen, DVD has come to regard the potential of falling resale prices as a non-issue (to them).

 

[bnoble]

"Unsellable"...2040 or so.

As long as there is a spread between prevailing rental rates and dues, there will be *some* value, even if it is just someone buying for a single vacation. Just nowhere near what it is now.

 

[Dean]

As long as there is a spread between prevailing rental rates and dues, there will be *some* value, even if it is just someone buying for a single vacation. Just nowhere near what it is now.

When you factor in the time delay and uncertainty I would suspect it's going to be at least 2-3 years before the end when it's going to be not feasible to sell.

 

[Pathways]

While the WDW 2042 resorts are beloved they are only 12.83% of the DVC points out there (counting Riviera). Not insignificant...but not all that significant either.

Huge thank you for providing those numbers. That gives a much better starting point for discussions