Interesting Boat Market Video

[mmullins]

Interesting take on the current boat market.

 

[Judy at JWY]

Wow - what a bummer guy! And I disagree with much of what he had to say. Ok, so his assessment of the COVID market was fairly accurate, but we have moved beyond that.

My take as relates to trawlers and fast trawlers: there is a shortage of inventory, particularly of (1) reasonably priced later model boats and (2) for boats in the $200,000-550,000 range in good condition. Sellers are negotiating, but not "fire-selling." Buyers are looking for fairness and not expecting bargains.

I had a survey yesterday on a mid-40s semi-displacement boat in a Southern state. I have an upcoming survey in FL on a full displacement "larger" trawler and have had trouble booking available quality surveyors due to their busy schedules. Am showing a full displacement boat to a client this weekend in FL. I am holding escrow funds on a trawler that didn't survey well on the West coast and buyer is continuing to search. A new listing on a special expedition yacht is being signed. This is not my average week historically, but nor is it the picture Mr. Bummer paints with his black brush.

Trawler on!! And be happy

 

[READY]

Contains some valid points but most are reflecting the adjustment from the Covid bubble.

My perception is we are in a normal market. Well cared for boats priced right sell within a reasonable time on market. If you bought post Covid you may need to reset expectations.

 

[SteveK]

@Judy at JWY What is your opinion on the seller getting a survey and having it available for buyers v. going through the buying process making an offer, survey, renegotiating price due to previously not known issues.

IMO, A buyer should still survey, but seller having one may speed up a sale.

 

[ancora]

Here in San Diego the problem is an acute shortage of slips, especially for older boats. Safe Harbor came in and bought some marinas changing their boat age limits, with other marinas following suit.

 

[Mac2]

Here in San Diego the problem is an acute shortage of slips, especially for older boats. Safe Harbor came in and bought some marinas changing their boat age limits, with other marinas following suit.

Isn’t that age discrimination? I hate when people beat around the bush. Just have a “no piece of ****” policy.

 

[Mambo42]

Here in Europe we also see a much larger influx of boats for sale. Apparently in my part of the world the number of boats offered is up 200 % from last year. Boats are not selling that fast anymore, some being offered for sale for over a year, no takers.
Prices are dropping rapidly, I have seen many boats dropping 50.000 - 100.000 in price and that was not on a price tag of over 1 million, that was on prices of 400.000 - 500.000 or even less. Am getting the idea many owners just want to get rid of their boats and stop the bleeding.

 

[tiltrider1]

Right now, there are few buyers for big ticket items. We are in a frozen state of mind. Whether it's a house, car, boat or plane, buyers are afraid to commit. This is not a surprise with all the Tec layoff warnings, government shut down and general winter pull back in most markets. There are trillions of dollars locked up in home equity that would normally come into the market for big ticket items. These properties have 4% mortgages, and no one can wrap their head around 6%. Never mind that 6% is actually on the low side of normal.

When will this mind set change? Don't know but it will change at some point. Now is the time to be buying if you have the money, everyone is hungry for a sale.

 

[Endeavor GB 32]

<<What is your opinion on the seller getting a survey and having it available for buyers v. going through the buying process making an offer, survey, renegotiating price due to previously not known issues.>>
We listed and sold our Grand Banks this past summer. Our broker, who we have known for over 20 years, asked to do this. He said the same thing, it eliminates most of the things that cause a sale to go sideways. I paid for the haul and survey, (needed the haul for bottom paint anyways) and the broker refunded half the survey cost at closing. It gave me the opportunity to correct 95% of the survey items myself. It did save time and the sale went smoothly. I for one think that it's a great idea all the way around.
Regards,
Scott

 

[Jeff F]

I didn't watch more than the first couple of minutes. Not a video person. But his points about dealer inventory were right, I thought.

There is a big difference to me between new boat sales and used boat sales. Inventory and production management is always a challenge for all involved in the new build and sales process. I completely get how the COVID whipsaw could cause huge financial strain on relatively small operations. When the order book is empty everyone scrambles to readjust, and whoever is holding inventory is quick to discount.

So for new boats a sudden slackening in demand almost guarantees discounting in the short term. Savvy buyers recognize this and may not feel any urgency to make a deal. It feeds on itself.

For used boats I think it's a lot less direct and more multifaceted. For older trawlers the market isn't really pegged to new boat prices, and sellers are generally under a lot less pressure to sell. I'd expect price movements in general to be less volatile as long as there is some movement in inventory. I could conceive of a few scenarios where new boat sales go off the cliff and the market in older trawlers remains static.

 

[Mac2]

Interesting how I just got an email from Kadey-Krogen advising me their planned 50th anniversary is cancelled for a minimum of 12 months due to the economic climate.

 

[Delta Riverat]

Yeah, hard to throw a party when you have layoffs.

 

[hollywood8118]

Right now, there are few buyers for big ticket items. We are in a frozen state of mind. Whether it's a house, car, boat or plane, buyers are afraid to commit. This is not a surprise with all the Tec layoff warnings, government shut down and general winter pull back in most markets. There are trillions of dollars locked up in home equity that would normally come into the market for big ticket items. These properties have 4% mortgages, and no one can wrap their head around 6%. Never mind that 6% is actually on the low side of normal.

When will this mind set change? Don't know but it will change at some point. Now is the time to be buying if you have the money, everyone is hungry for a sale.

Excellent summary.

As we just went through the purchase process I will add the following.

Most of the quality boats that are stagnant on the market currently seem to have issues of one sort or another. We searched for a specific model for well over a year and while last year there was more selection of this model on the market the last 6 mos. it was slim pickings. I'm am sure we paid at the higher end of value of the boat we bought, but it had the right gear, the right upgrades, the right condition, location etc. We are approaching our mid 60's and in great health and wanted to get the ball rolling on the next step in our lives so we accepted the cost of this boat as part of the big picture. Could we have waited a few more years .. sure but who knows what the future brings.
HW

 

[BroadCove]

I just received the attached from the Sterling Acceptance Corp (major boat loan broker) newsletter: what's selling and what's sitting. Sterling obviously has an interest in the market, but the narrative fits with my recent purchase / sales experiences (bought and sold last year). Also noted that rates for boat loans from $200k - $1million are a bit under 6%, for what that's worth.

 

[Judy at JWY]

@Judy at JWY What is your opinion on the seller getting a survey and having it available for buyers v. going through the buying process making an offer, survey, renegotiating price due to previously not known issues.

IMO, A buyer should still survey, but seller having one may speed up a sale.

GB 32 Scott gave an excellent response that I fully support. However, be prepared for the interested buyer to ask what you fixed.

 

[bumpkin]

The Wynn's, a youtube couple recently posted a video about them buying a new 50 foot expedition motorboat for half price at auction. The owner had been trying to sell the boat for 2 years at 1.8 million Euros. At auction they paid 850,000 US. It is quite the boat.

All markets, boat, housing, RVs seem to be softening, at the moment.

On edit.
It seems that there was a long thread about the Wynn's and what they are/were looking at. The point I thought that was relevant, they chose a new boat over an older boat because of the renovation costs. I agree most boats for sale are tired old boats that need a bunch of money to be brought up to today. The sellers are still counting on the hey day with their pricing.