Boat sales and the coming reccesion.

[poopship]

Noticed the Amel 50 listings. That kind of serves as a pre indicator in my mind. They are for sale for around 1.1 mil usd part of this is because the dollar vs euro is strong. Crazy to see that many for sale at same time. Kind of want to go in offering 850k and scoop one up, sail it to san diego and sell it for 1.4 mil. arbitrage?

- also technically the US is(or was) in recession (negative economic growth for 2 consecutive quarters 1q and 2q)

[goboatingnow]

Originally Posted by TiPegleg

This only really tracks with “normal” boats. I’m a metal French-type centerboard guy and even though I have my boat, I still track the market. These boats are at record prices and in incredible demand. A single vague post to the Ovni Facebook group with a possible boat for sale creates an instant storm. If I wanted to sell my boat right now I’d easily see twice what I paid a year ago not counting recent upgrades. From what I’ve seen, interest in “rugged” cruisers is on the rise… I don’t think this ties at all to the mainstream commodity boat market since the buyers of these boats are maybe more “serious” and have the means to go without YouTube?

I think causation and correlation come to mind here.

In niche markets recently demand has outstripped demand , this is true also in mass market boats. Too many buyers have bought up the production schedule , resulting in potentially new boat buyers trawling the 2nd hand marketplace with more cash then sense.

But really you can’t draw anymore conclusions then that. There’s no evidence buyers are favouring “ rugged” types anymore then anything else. Mass market boats monohulls and Cats have been and remain in demand. I see asking prices for my Bavaria nearly double what I paid two years ago.

What I do know is in the high end ( over 500,000) asking prices have become soft because in that rarified markets buyers have become cautious and reticent.

So I don’t think we can say the boat market has shifted. Two years of excessive demand has lead to a lack of new boats and excessive 2nd pricing across almost all categories.

That this will unwind is almost inevitable , as to who will be revealed wearing nothing remains to be seen. I do think that high cost brands will be subject to a double whammy of inflated build costs and buyer reticence to spend large dollops of discretionary income on a wasting asset.

It may be that some of those buyers will migrate to the higher end of mass production boats temporarily inflating that sector but this may not happen. Middle group buyers typically either buy or drop out of consideration as there is not many places they can go.

[argosail]

But I mean is there any chance that the "unwinding" of mass-market boats will be more of a soft landing to still higher than pre-pandemic prices due to "inflation"?

Bottom line if you find a boat you really like that is even a "decent" deal, I would go ahead and buy her pending surveys and be happy. Unless that boat is 6 figures maybe...

[goboatingnow]

Originally Posted by argosail

But I mean is there any chance that the "unwinding" of mass-market boats will be more of a soft landing to still higher than pre-pandemic prices due to "inflation"?

Bottom line if you find a boat you really like that is even a "decent" deal, I would go ahead and buy her pending surveys and be happy. Unless that boat is 6 figures maybe...

It largely depends on the flood of used boats. If that is large then prices will fall and 2:1 losses could be possible

Hopefully that won’t happen and the market will throttle back softly, this assumes a reasonable number of buyers are active. I think this will be a function of how sustained the “ recession “ is and how it affects incomes and finance ability.

I agree at present , if you find your boat , buy it. No one’s getting any younger.

It’s all to play for at this point.

[lestersails]

I am a small potato sailor compared to you all. Pocket cruiser (more like a pup tent). But it is still real money to me. My experience at the boat show last year in Annapolis was totally deflating. The staff at the booth of the manufacturer that I was most interested in made it 100% clear to me that they could not care less if I bought a boat or not. Basically told me that it was going to cost 2X the advertised price kitted out with at least a 6 month wait, take it or leave it.
So I went used and still paid waaaaay to much for my boat (in Dec 21), especially since it turned out to have a non-working, unrepairable motor.
Down at my end of the market it is/was an unbelievably overheated market (just like my motor!)

[CaptTom]

Originally Posted by argosail

This is another problem, you'll have a glut stored on the yard but the people that own may not be in financial dire straits to sell and will be content to let it languish for years sadly....

This has always been the case with boats. Yards full of "broken dreams" that owners can't let go of. I suspect the hot market will only add to the yards full of neglected vessels. But that will take years. Meanwhile, inflation continues, especially for slips as venture capitalists buy up all the marinas.

Demand will probably fall, but it's hard to see that impacting boat or marina costs anytime soon.

[Celestialsailor]

Originally Posted by TPG

Interesting graphs. The catamaran market is still crazy at least here in the U.S. and some monohulls are experiencing the same high demand from what I see.
And I can second other comments here in FL regarding marinas, all of them appear to be full and waiting lists are growing.
Where all of this will lead is a great question.

I think there will be a 6 month lag. First came the inflation and we are at the beginning of that. Then unemployment will creep up and then the toys will go up for sale, listed at what they paid for them. Months will thunder by and Marinas will still be collecting their $700 a month slip fees. Reality will set in and the boat will sell for much less and lets not forget the deferred maintenance during that selling time, since they won't want to loose any more money. These will be the future ex-boat owners telling everyone that "a boat is a hole in the water you throw money into."

Originally Posted by goboatingnow

Almost everyone I know believes the purchase frenzy post Covid is a bubble and will unwind. This is now helped along by the financial uncertainty around us.
What many cant predict is the timing and extent of the unwinding. Wishful thinking purchasers are not good judges unfortunately.

Depends what other stupid $#it happens in the world. I just saw that the UK hiked rates 1.75%. That should send a ripple through the markets.

[goboatingnow]

Originally Posted by Celestialsailor

I think there will be a 6 month lag. First came the inflation and we are at the beginning of that. Then unemployment will creep up and then the toys will go up for sale, listed at what they paid for them. Months will thunder by and Marinas will still be collecting their $700 a month slip fees. Reality will set in and the boat will sell for much less and lets not forget the deferred maintenance during that selling time, since they won't want to loose any more money. These will be the future ex-boat owners telling everyone that "a boat is a hole in the water you throw money into."



Depends what other stupid $#it happens in the world. I just saw that the UK hiked rates 1.75%. That should send a ripple through the markets.

I don’t think base rate rises will actually have much effect. It’s all about consumer confidence really , those with buying power will continue to have buying power and in fact softening prices will actually spur them to buy.

Also what tends to happen in softening prices is sellers who don’t need to sell withdraw from selling and choice dries up.

The big unknown is really the effect on the “ Covid “ purchases. Are these people in for the short or long term, we don’t really know. ( yet ) many of these people are now partially working from home and have increased disposable income and have realised the value of having an alternative “ escape “ , most are dinkies , and hence have considerable discretionary income , inflation in food and other such items have little effect on these types of households.

It remains to be seen , people have a certain schadenfreude over predicting bust bubbles , but we really are dealing with something new this time.

Boaters tend to be from high income sectors, those sectors are doing ok , so unemployment is not seen as a big risk here.

[Lake-Effect]

Originally Posted by goboatingnow

The big unknown is really the effect on the “ Covid “ purchases. Are these people in for the short or long term, we don’t really know. ( yet ) many of these people are now partially working from home and have increased disposable income and have realised the value of having an alternative “ escape “ , most are dinkies , and hence have considerable discretionary income , inflation in food and other such items have little effect on these types of households.

One thing we noticed over the COVID lockdowns: the parklands behind our house were more heavily used, by more people. But now, we still find that there are many people enjoying the parks.

So, maybe, many of the COVID boat-buyers will stick with it, and there won't be so many COVID-boats back on the market...

[Fatbob]

Interesting discussion.

I read an article (forget where) that was talking about how some older (i.e. mid-80's / 90's) well-maintained, higher quality boats (i.e. Morris, Baba, Southern Cross, Pacific Seacraft, etc...) might hold their value well due to the fact that as the fleet ages, many have/will fall into disrepair. As the number of "good" used boats decreases, the price will hold because the cost of building a similar new boat will (already has) increase beyond reach of the average guy.

A similar thing happened with light aircraft. With a new single-engine plane costing $500K+, a well-maintained SE plane from 60's/70"s (peak of production) increased in value as the used fleet of good planes got smaller and smaller. If you buy a good 1970 airframe, update the avionics and rebuild the engine....you can have a "like-new" aircraft at a fraction of the price of a new one. The Cessna 172 airframe/engine hasn't changed much since the 1960's....GRP hulls are similar.

[goboatingnow]

Originally Posted by Fatbob

Interesting discussion.

I read an article (forget where) that was talking about how some older (i.e. mid-80's / 90's) well-maintained, higher quality boats (i.e. Morris, Baba, Southern Cross, Pacific Seacraft, etc...) might hold their value well due to the fact that as the fleet ages, many have/will fall into disrepair. As the number of "good" used boats decreases, the price will hold because the cost of building a similar new boat will (already has) increase beyond reach of the average guy.

A similar thing happened with light aircraft. With a new single-engine plane costing $500K+, a well-maintained SE plane from 60's/70"s (peak of production) increased in value as the used fleet of good planes got smaller and smaller. If you buy a good 1970 airframe, update the avionics and rebuild the engine....you can have a "like-new" aircraft at a fraction of the price of a new one. The Cessna 172 airframe/engine hasn't changed much since the 1960's....GRP hulls are similar.

The truth is , any fiberglass boat , maintained in good repair, will last almost indefinitely , this is as much true of older Bavs, and Bennys , as it is HR, etc. Ive been on 25 -30 year mass production boats that look great.

I think the major factor against very old boats is a combination of “ fashion “ and snobbery. Many boats are seen as statements of “ success “ just as much as they are as a means of leisure transport. No different to cars etc. As I’ve said before people want a modern contemporary aesthetic, this is harder to achieve in an old boat then an old house , so demand for newer looking boats will trump I think.

Hence I don’t forsee older boats gaining any material long term pricing advantage and insurers tend to penalise very old boats anyway.

You don’t live in a light aircraft , but you often do in a boat , hence interior aesthetics pay a big part in purchase decisions , ask any boat salesman or broker. Hence dated designs will always suffer price wise. Also , most boat equipment irrespective of boat brand tends to come from the same suppliers , a 40 year old Harkin winch looks the same on a HR as it’s does a Jeanneau , and it’s as equally tired too.

I think we can assume that the mainstream production builders will survive , so new boat demand will must likely remain good , we need that cause otherwise we’d have a constricted used market.

I don’t think in 2-4 years we will see dramatic changes in the leisure boat market. Some boaters/players will exit , other new ones will enter.

[old pirate]

We have just bought. Amidst all the talk of recession , falling prices, etc the truth is we are not getting any younger and “quality boating time” is certainly not going to be greater for us at any time in the future.
Sad to say my old school notices and social webs that I follow do not have much positive to say of my era or the shrinking circle of friends and acquaintances.
I agree with a lot of the comments above re the economics and effects of supply and demand. Benefits of waiting ? But for many of us if you are going to live the dream you have to be part of it ! Our window of opportunity is diminishing and will close. Like some above comments I urge readers to take the step while everything still works. Be sensible. Don’t recklessly give up everything to move aboard !
A book that influenced us in the 80’s was “Sell up and sail”, forget the author. We did that in the 90’s and had a blast till into the 00’s then returning to work shoreside. Luckily we’ve been given the opportunity again
Maybe a little off topic, but had to have my 2c worth !

[contrail]

When reading all of these well reasoned (and divergent) opinions, I am reminded of the start of Covid, and the numerous threads we had that basically predicted the end of boating. Almost no one disagreed. About a month or two in, one of our posters, maybe Chotu, reported that a broker friend of his was experiencing the opposite and selling boats like gangbusters. 99% of us ridiculed this, until a month or so later, it became apparent that we were in the biggest boating boom in memory. Surprise, surprise!



So I take all of these analyses with a grain of salt, and suggest we sit back and see what actually happens, without being quite so certain regarding our predictions!

[Lake-Effect]

Originally Posted by contrail

So I take all of these analyses with a grain of salt, and suggest we sit back and see what actually happens, without being quite so certain regarding our predictions!

Spoilsport.

[Baby tug]

Originally Posted by TiPegleg

This only really tracks with “normal” boats. I’m a metal French-type centerboard guy and even though I have my boat, I still track the market. These boats are at record prices and in incredible demand. A single vague post to the Ovni Facebook group with a possible boat for sale creates an instant storm. If I wanted to sell my boat right now I’d easily see twice what I paid a year ago not counting recent upgrades. From what I’ve seen, interest in “rugged” cruisers is on the rise… I don’t think this ties at all to the mainstream commodity boat market since the buyers of these boats are maybe more “serious” and have the means to go without YouTube?

There are two pages of them on yacht world , they are priced pretty high though