Question(s) for older boaters...

[CarlF]

I remember in the ‘70s and 80’s when you could buy a brand new boat and sell it in five years for more than you paid for it.

Of course, inflation was running over 5%.

Maybe we’ll see that again too

 

[TollerTrawler]

Other trend indicators

Some other macro shifts that may affect the popularity of boating:

1. Canadian boat purchase tax. The proposed luxury tax on boats over $250,000 is 10% of the full value of the boat. Intended to come into effect in January 2022.

2. Moorage. In my 20 years of boating I've never seen such a lack of annual moorage on the Westcoast of Canada. Marinas are quoting 3 -5 year waits (completely arbitrary number!) for 30'+ slips. There appears to be no new marinas planned.

3. Cost of service. Professional services have never been higher, and will only climb as the pool of skilled workers is trending down. A haul-out, spray, and 3 nights at Van Isle this summer for a 30 footer incl. tax was $750. Mechanical work during that was $125 an hour; more than GP doctors are paid in the province per consult.

4. Quality of experience. Desolation Sound was temporarily glorious and reminiscent of a decade ago without the American boats due to border restrictions. However even with just local boats the Gulf Islands are jammed: marinas, mooring buoys, hidey holes.

It will be very interesting to see how boating unfolds. We're hedging against: sold our boat last month after 4 days on Craigslist for a pretty crazy price. Time will tell whether we come back to the lifestyle.

 

[OldDan1943]

Hint: a GP doctor is paid by the Canadian govt. The boat mechanics are "free market".
A few years back, Canadians were coming to the US, cash in hand, for medical procedures. Generally, no waiting.

 

[Captain DJ]

I am doing just that...

I'm curious about the fate of the big cohort of boats from the 1970s and 1980s. Many are at the point where they could be reconditioned and provide another generation of service, but without major investment will be scrapped in the not-too-distant future. Their fate is largely based on the broad-based demand level. I've seen a few recent sailboat restoration projects that were undertaken as an alternative to new. Maybe it's a blip, but it's an encouraging sign.

I am doing just that, having bought a 1974 Cheoy Lee that is on the verge of being a ¨project boat¨. The last owner did NOTHING to maintain it over the last three years, but the owner before him (27 years) loved her and kept her up.
We like the value found in older trawlers.

 

[Nick14]

I've been actively searching for a boat for about 2 1/2 years. Last year I constrained myself due to the pandemic and wasn't willing to fly or stay in hotels, which limited me to boats I could get to in a day trip. I missed out on some that sounded good, but then, everything sounds good and looks good in internet photos - until you see it in person. I've seen about 30 boats, all but 2 of which were not in the condition they were represented to be in (and in hindsight, I should have bought one of the 2 that were in genuinely good condition, but I underestimated how fast they would sell).

The excess of demand over supply is clearly at work right now in the boat market. Prices are up, inventory is down, and demand is high. Boats in decent condition sell fast. It's frustrating.

Many brokers I've interacted with are letting it go to their heads. A boat came on the market a couple of months ago that I was seriously interested in. I called as soon as I saw it appear on yachtworld (which I check twice a day). The broker acknowledged I was the first one to call about it.

I wanted to see it ASAP. The broker was reticent, complaining that it would take him a whole day to get to the boat and back, required a drive plus a ferry ride, etc. etc. etc. He was planning to move the boat to his brokerage office to let him show it more easily. I reiterated my willingness to happily travel to where it was (the owner's home), but the broker wasn't interested. He promised he would let me know when it was expected to be at his dock.

A week later I still hadn't heard from him, so I called him. He said, 'we have 5 cash offers on the boat, 2 are over asking, do you want to get in on the bidding'? Under those conditions, no, I wasn't.

Another boat I liked popped up a couple of weeks ago. Again the broker (a different one) said I was the first to call. I wanted to see it ASAP. He got back to me later in the day and said there were two other full price offers coming in. I immediately sent in a full price offer contingent on my seeing the boat (and survey and sea trial). When I saw it two days later, I found problems I wasn't expecting. Not for me.

Another boat came on the market beginning of this week. Again I was the first one to call, and asked for a showing ASAP. By the end of the day the broker called me and told me there were already 2 full price offers, and the seller had raised the price by $25k - above what it was listed at just that morning.

Talked with a broker today about a boat that might be coming on the market. The buyer paid $200k for it 4 years ago, and plans to list it for $399k.

One broker I like and respect told me that some brokers are putting in full price or above asking offers on multiple boats at the same time, just to give their clients an opportunity to see them.

It's an absolutely insane time. As others have said, this is a bubble, and all bubbles eventually pop. The only question is, when?

Many have been expecting and waiting for the stock market bubble to pop for several years now. Time and time again 'experts' have called it over-valued and a correction overdue. Yet it still continues to soar and defy the laws of economics, gravity, and common sense.

I'm debating waiting it out vs. just putting in an order for a new boat (that would be smaller and more expensive that I'd like, and will take a year and a half to build). The bubble could pop at any time, driven by many potential forces such as the world finally acknowledging that the pandemic is not going away any time soon. But then again, it could be like the stock market, and 3 years from now, there could be another thread here about how the used boat market is insane.

It's all enough to make me seriously think about retiring from boating a little earlier than I'd expected.

 

[Frank60]

This is a great question. We were just ready to make the move to a slightly larger boat and probably a trawler ourselves when the market went crazy. We've delayed our plans hoping that things will at least settle down. Even if prices don't come down much, it would be nice to have a more balanced market.

As we've thought about this, we think there's another factor to probably consider here. I'm seeing a lot of folks that got into boating for the first time in response to the pandemic and wanting something to do. As we all know, lots of first time boaters have no idea what they're really getting into. It's more expensive and difficult to maintain than they expected. The grandkids aren't that interested after a couple of times out. The romantic ideal doesn't live up to expectations. Often the Mr or Mrs will want a boat but the other isn't that jazzed about it. Those don't usually last either.

I wouldn't be surprised if a lot of the first-timers start putting their boats on the market within the next 2 years when reality sets in. I see it all the time. That should help supply.

I always tell folks walking the docks fantasizing about that first boat that it's not worth it unless you (both) love it. I suggest that they get on forums like this to get themselves more educated first and get a better understanding of the realities of boat ownership.

 

[Nick14]

I wouldn't be surprised if a lot of the first-timers start putting their boats on the market within the next 2 years when reality sets in. I see it all the time. That should help supply.

LOL, you're right! I've heard several brokers say the same thing. Right now they have no inventory to sell, but they predict in a few years they'll be overwhelmed with newbies selling their boats and not enough buyers for them.

Some of the things I've heard about are downright scary. People who have never boated in their lives buying 40-50 ft boats - as their very first boat! Situations like that seem like there are an infinite number of ways they could go wrong.

There may well be a greater supply of boats in a couple of years, but I can only imagine how some newbies will treat them in the meantime. It doesn't take long for negligence and lack of maintenance to ruin a boat. Two years is also a significant portion of the time I probably have left for boating, and waiting that long, by that time might not be enough time left to be worthwhile for me.

 

[BandB]

Two years is also a significant portion of the time I probably have left for boating, and waiting that long, by that time might not be enough time left to be worthwhile for me.

Two years is significant for all as none of us know the time left or what the future holds. To parents with kids, waiting could be missing great boating experiences with their kids. To a young couple it can be missing out while they had the opportunity. To older, it can be failing to take advantage while still having good health. I have no idea when the boat market will change or how or what will be available. Perhaps those new to boating will love it and their enthusiasm even get more to jump in. The collapse of prices after 2008-09 had a very short term impact and eventually led indirectly to higher prices on late model used boats because new boat production was so drastically reduced.

Let's imagine people decide in 202X to stop buying new boats at current prices. Well, not going to mean a price drop on new boats unless raw materials and labor prices drop, which is highly unlikely. Simply going to mean fewer boats produced and some builders shutting down. Also, not likely to mean a drop in used boat prices as many who said "no" to new boats will be looking to buy used.

Now, if a total collapse in the world economy, used boat prices may eventually drop tremendously but then few will be in any better shape to afford them then. Jobs will pay less or be less secure, stocks will be losing value.

There have always been those predicting collapse and one out of every 20 years or so their predictions have been true. My father had a client with a safe in his home who was convinced that saving silver in it was the only way to be prepared and when the dollar was useless, he would be protected. My father told him it would then take a wheelbarrow load of silver to buy groceries, that he best start farming if he really wanted to be protected and able to eat. I was first aware of all this around 1990 after my father died and the man was bemoaning that while silver was only $8-9 in the 60's it has risen to over $120 and now dropped to around $20. I then pointed out inflation and the fact the dollar had risen during that time so the silver actually lost against it. I don't know if he held on when it dropped to $7 or sold when it rose over $50. I do know that a strategy predicated on an economic collapse rarely succeeds and benefits very few.

I'm not wise enough to predict. I am wise enough to know I'll be wrong most of the time.

 

[OldDan1943]

I wear my tinfoil hat proudly as I visually scan my year's supply of dehydrated food, checking the dates because they say it will last for 30yrs and tow it behind my boat in hermetically sealed containers.
Maybe next year new boat will become more available, maybe not.
Maybe the prices will settle on the down side and remain constant as the new owners' of boats realize, boats cost money and a poor investment. Maybe not.
If we live our lives based upon 'maybes', maybe we need to get a different life??
Yes, we can plan, we can research and we can search but at some point, we have to 'pull the trigger', actually making a decision.
The used boat market is at a high point, so while you are busy researching and making plans, someone else will buy the boat then you will have to start the search all over.
You have a written list of 'must haves', now find the boat that satisfies most of the list.
Yes, a full survey and oil test. Then make a reasonable offer realizing there maybe someone willing to make a full price offer.
More than one person in here recently and quickly sold their boat for the full asking price.
Sooooooo, don't over think the process, you might miss out on your dream or 'maybe' not.

 

[FWT]

I'm not wise enough to predict. I am wise enough to know I'll be wrong most of the time.

Those who follow finance carefully may know the name Nassim Taleb. Maybe not. But you have probably heard his ideas repeated. If you have heard of a "black swan event", he's the guy who coined the term.

He makes the point there are way too many variables in the world to predict anything reliably. The best you can do is recognize when pressures have built up to an extreme in something at unsustainable levels. That pressure has to find release, somehow, at some point. Be it a fast crash, or events somehow work to slowly release air from the balloon.

The best you can do is take advantage of high prices as a seller, and low prices as a buyer. When they appear. You won't know if its a top or bottom until well after the fact, look back and say "yep, that was it."

Work with what you see. Not what you forecast.

 

[Pocoron]

This is a very interesting thread with a lot of thoughtful posts by a number of people with significant experience in both life and boating. My wife an I boat our very first boat last year after talking about for the past 35 years. We did this despite knowing the following:
-Boat will probably be worth substantially less in a year or two
-It would be relatively costly to own a boat (moorage, insurance, maintenance and then usage costs)
-Didn't know a whole lot about operating a boat this size
-We didn't know a whole lot the systems on a boat
-One or both of us may find it isn't our cup of tea

What we do know is:
-If everyone else in the boating world learned how to operate their vessels safely, why couldn't we? Yes, I realize I am opening myself up for a verbal beating on this point. We are simply running out of time with respect to going through the traditional steps of boat ownership and I believe we are going about things the 'right way'.
-We are in our late fifties, active, healthy and have the means. If we don't do this now when are we going to?
-Life is short. We have had a number of friends/relatives/acquaintances get sick/injured/old or just plain dead.
-My biggest fear is missing my opportunity to do or try some of the things I have long wanted to do (see 'Life is short').

The boat ownership experience, to this point, has been everything we had hoped for. It has also been a good dose of the work required to get to the good stuff. As much research as we did prior to the purchase, there is a lot to learn about owning/maintaining/operating a boat that we just didn't know. It has very much been like drinking out of the proverbial fire-hose - overwhelming at times. But it does get you to the good stuff.

Not sure that I am actually adding much to the dialogue but hopefully you will see some of the 'newbie' perspective in my post.

PS - I think this boating thing is pretty cool!

 

[Nick14]

Two years is significant for all as none of us know the time left or what the future holds.

.....

I'm not wise enough to predict. I am wise enough to know I'll be wrong most of the time.

That's the problem. Two years is a significant amount of time (especially at my age), and a substantial portion of the time I likely have left to go boating. Therein lies the dilemma.

I'm not looking for a 'bargain' on a used boat (though would be happy to receive one as a gift). Money is not limitless, but time is more important right now than saving a few bucks. I'm just looking for a good boat, in good condition and not a project that needs six figures of work. Right now for the kind of boat I'd been looking for, they have been few and far between and the ones that come up end up in bidding wars.

The dilemma is what would be faster - locking in delivery of a new boat in a year and a half, or hoping that a good (and affordable) used one would come up (and could be bought) in that time? The new boat timeline is a certainty, both for delivery time as well as missing out on the rest of this and the entirety of next season. A used boat might appear tomorrow, or never. Two years from now I could still be searching.

I think I'll cut my (time) losses and lock in a new boat (and hope I live long enough and have enough time left to use it and make it worthwhile).

I'm on the same page as you - I'm not smart enough to predict anything, except that whatever I predict will turn out differently than I think.

 

[SteveK]

Predictions, ha!
Two weeks ago gas was $1.63L so I waited for it to go down. Now it is $1.71L Never been this high before.
Like everyone says, if you can, do it today.

 

[OldDan1943]

Years ago, I thought I had locked in a new model smaller Nordhavn, even made a small down payment. Turns out, I got a call saying they could not sell the boat at the agreed price so I got my downpayment back, gave up my place in line, went on about my life.

 

[FWT]

To paraphrase the punchline of an old joke:

There is a reason boating is so expensive. Because its worth it.

 

[Peter B]

To paraphrase the punchline of an old joke:

There is a reason boating is so expensive. Because its worth it.

I like that.
Certainly more accurate than those ghastly cosmetic ads urging people to splash out on expensive cosmetics... "because you're worth it..!"

 

[Nick14]

Like everyone says, if you can, do it today.

I'm on board (no pun intended) with that!

If I could do it today, I surely would. The problem has been so few boats on the market, most of them not in the condition advertised, and the few good ones sell instantly, sight unseen with no conditions, in a bidding war insanity often for over asking price.

As much as I'd love to go boating today, and acknowledge that remaining time is limited, my money is also limited. I'm not going to pay near-new boat prices for a 15+ year old used boat that needs work.

Ah, well, the resurgence of COVID will keep me in self-imposed lockdown in my house for a time, while I wait for a new build. No place to safely go right now anyway.

 

[gt7834a]

The market is crazier now but I remember reading very similar threads 4-5 years ago. Prices don’t go up always, but over the long term they do. People are still scarred from the 08-09 downturn and seeing nice boats sell for nearly nothing and while we will have another recession it’s unlikely to be like that.

 

[FF]

"The dilemma is what would be faster - locking in delivery of a new boat in a year and a half, or hoping that a good (and affordable) used one would come up (and could be bought) in that time?"


Many new boats still need to be outfitted after delivery, depending on your desirements that can add 3 months to a year.