Has The Market Peaked?

[RedRascal]

I've been watching a few different types of popular boats in the Pacific Northwest market. For these particular boats I am not seeing a peak yet. Here is what I've observed:
-CHB 34 - Well sorted ones seem to go in about a week or two. Saw one go next day with no sea trial and no survey other than the owners 18 month old survey.
-Grand Banks 36 - Well sorted and clean similar to the CHB 34s, they seem to go in a couple weeks. Did see one go within a day.
-Grand Banks 42 - Clean ones old or new go within about a week. One in my buddy's marina went without even going on the market. Word of mouth was enough to get it done.
-Bayliner 38s - Well sorted ones in the 50-60k range seem to go pretty quick.
-Bayliner 4788s - Seem to be up in price and they also seem to go off the market pretty quick. They use to be listed around $180-200k, then they got into the $200-220k range last year and now they are getting north of $230k.

When I see a clean well priced CHB or Grand Banks sit for a month or two then I'll declare a peak. In this group of boats it seems like a hot market.

 

[socalrider]

When I see a clean well priced CHB or Grand Banks sit for a month or two then I'll declare a peak. In this group of boats it seems like a hot market.

It makes me happy to think of a bankrupted Russian oligarch desperately bidding on my '79 CHB 41 to replace their seized 400 footer.

My hope is that these superyacht builders deploy their personnel to build boats that might actually be used by someone who could make a living doing something honest. We need more of those Turkish-built Artnautica XPM-78's and the like floating around our oceans, not these useless 400-500 foot monstrosities.

 

[Bmarler]

I've been watching a few different types of popular boats in the Pacific Northwest market. For these particular boats I am not seeing a peak yet. Here is what I've observed:
-CHB 34 - Well sorted ones seem to go in about a week or two. Saw one go next day with no sea trial and no survey other than the owners 18 month old survey.
-Grand Banks 36 - Well sorted and clean similar to the CHB 34s, they seem to go in a couple weeks. Did see one go within a day.
-Grand Banks 42 - Clean ones old or new go within about a week. One in my buddy's marina went without even going on the market. Word of mouth was enough to get it done.
-Bayliner 38s - Well sorted ones in the 50-60k range seem to go pretty quick.
-Bayliner 4788s - Seem to be up in price and they also seem to go off the market pretty quick. They use to be listed around $180-200k, then they got into the $200-220k range last year and now they are getting north of $230k.

When I see a clean well priced CHB or Grand Banks sit for a month or two then I'll declare a peak. In this group of boats it seems like a hot market.

I just sold a 30 foot sailboat in Olympia, took me 7 hours to get asking price. I could have sold it 10 times that day.
Pnw hasn’t peaked yet. Especially for boats that are economical to operate.

 

[NEtrawler58]

I agree with Hippo that emotions have a greater impact on purchasing decisions than reality. I can't speak to the luxury market but I talked with someone 2 days ago that is looking for a modest used boat. He said they still are selling in a matter of days. He went to look at one and there were 6 other showings scheduled for the same day, so I don't think we are past the market peak yet.

 

[twistedtree]

For boats in the range owned by TF members, I would guess that we are nearing the peak of the market. I think long lead times on new builds will continue to hold new build prices high, and push up the best brokerage boats. But I think the day or reckoning is arriving for the hordes of people who jumped into boating as a recreational substitute during COVID. That will push a lot of boats onto the brokerage market. Both because those buyers can now return to their preferred recreational activities, and because I expect a lot of buyers now see the less glamorous side of boat ownership.



So I think a lot of boats will start hitting the brokerage market, but I think it will take a year fro prices to really come down. Those boats will go on the market with today's shortages and prices in mind, and a lot of boats will have to sit for a while before the prices come down. Everyone thinks their boat is worth more than it is, and the current market has further inflated those expectations. I think most sellers will hold out for a while before reality sets in.


Then new build backlogs will follow. As quality brokerage boats become available, fewer new orders will get placed. Also, I expect orders will get withdrawn in favor of brokerage boats. If you are looking at a 2024 or 2025 delivery on a new boat, and a reasonable brokerage boat surfaces, what would you do? When I look at our recent build, the biggest down side to it was the 4 year gap in cruising. Those are 4 important years as you are ageing.


But I think it will take a good 1-2 years before things settle out.

 

[BandB]

I do not look for a price drop on new builds. In fact, I anticipate continued rising in prices. As a result, I look for prices on premium quality used boats to maintain. I do look for more used boats to hit the market over the next couple of years and the price on the lesser quality ones will drop some, but quality will continue to cost.

 

[SoWhat]

My 2 cents is that you will see inventory go up and prices start to come down this fall. Many folks who purchased in the last few years will determine boating is not for them due to cost, time and availability of other options for entertainment and travel.

A recession would put the brakes on recreational boating but...

building new fiberglass boats will cost a lot more due to the EU gas shortage.
Fiberglass manufacturing requires heat and ethylene resins are derived from natural gas. You could not give a power boat away in 1973.

The semiconductor shortage may also impact production. Boats are loaded with new electronics. I do agree that the covid bump would normally level out but the energy shortage will play a bigger role in new boat pricing.

 

[FWT]

I do not look for a price drop on new builds. In fact, I anticipate continued rising in prices. As a result, I look for prices on premium quality used boats to maintain. I do look for more used boats to hit the market over the next couple of years and the price on the lesser quality ones will drop some, but quality will continue to cost.

+1. We don't have a "like" button.

 

[Hippocampus]

Al is also energy intensive to make. It’s not just the TIG welding but rather the basic manufacturing from ore. Still wouldn’t be surprised by increasing market share for Al long low displacement boats driven by MMCC and fuel concerns. Combination of fuel costs and efficiency may change peoples thinking when considering new construction. Looking at the new designs consideration to have zero footprint boat( due to solar arrays) when at anchor and increased range for each gallon of fuel have become stronger drivers when picking designs.

 

[slowgoesit]

Al is also energy intensive to make. It’s not just the TIG welding but rather the basic manufacturing from ore. Still wouldn’t be surprised by increasing market share for Al long low displacement boats driven by MMCC and fuel concerns. Combination of fuel costs and efficiency may change peoples thinking when considering new construction. Looking at the new designs consideration to have zero footprint boat( due to solar arrays) when at anchor and increased range for each gallon of fuel have become stronger drivers when picking designs.

But at least an aluminum hull can be recycled at end of it's life, vs FRG . . .

 

[sunchaser]

…and then there are the increased costs of a new build that are inevitable right now. That will result in continued support for the used market. Lots to think about. Jim

Good points JD.

As to fuel prices and availability, as of this AM, oil futures have entered a bear market in a reversal from past month. Unlike Europe, North America can within short order be in a surplus situation.

For efficient hulls the cruising future need not be grim especially with the ongoing robustness of the US and Canadian economies. The Ukrainian wheat production curtailment is potential good news to NA farmers.

Yup JD, " Lots to think about."

 

[bowball]

I do not look for a price drop on new builds. In fact, I anticipate continued rising in prices. As a result, I look for prices on premium quality used boats to maintain. I do look for more used boats to hit the market over the next couple of years and the price on the lesser quality ones will drop some, but quality will continue to cost.

Yes, this is my view too. I’ve been debating placing an order for a new Fleming, and it’s two years out. My experience has been the used ones aren’t that much less expensive, relatively speaking. The number of used ones though hasn’t changed that much either so one can’t count on finding a nice geographically convenient one.

 

[LouisG]

If you think you're gonna get a deal on a boat I've got a slip for you...in Scottsdale.

 

[Hygge]

I'd say, "yes" it has. not so much for the number of boats being listed on yachtworld (it is spring, after all) but for the number of late model boats I have been seeing various places. IE: 2019 - 2021 boats. As if folks bought during covid and now are getting back to pre-covid activities. Also, fuel prices.

But hey, if I could time the market, I'd have a Nordhavn instead of a Ranger Tug 29.