Used boat market 2nd half 2022?

[Lake-Effect]

Originally Posted by valhalla360

I don't see being in debt as a driving force at most a compounding factor...

I suspect (without proof) that maybe over the last couple of years a lot of people stretched themselves a bit to get their dream boat now, as opposed to a bit later. And that there are folks who yielded to impulse, who now regret the purchase, for whatever reason.

We shall see...

[Mike OReilly]

Originally Posted by Lake-Effect

I suspect (without proof) that maybe over the last couple of years a lot of people stretched themselves a bit to get their dream boat now, as opposed to a bit later. And that there are folks who yielded to impulse, who now regret the purchase, for whatever reason.

We shall see...

Isn't this exactly what the BoC, and others, have been saying and warning about for the last decade; that people and corporations have been taking on too much debt. Of course, after a few years of these constant warnings, it all started to sound a bit like the boy that cried wolf.

We have nearly a generation of abnormally low interest rates. It's no wonder people have become complacent, thinking money is basically free.

[Lake-Effect]

Originally Posted by Mike OReilly

Isn't this exactly what the BoC, and others, have been saying and warning about for the last decade; that people and corporations have been taking on too much debt. Of course, after a few years of these constant warnings, it all started to sound a bit like the boy that cried wolf.

We have nearly a generation of abnormally low interest rates. It's no wonder people have become complacent, thinking money is basically free.

Opinion about the most appropriate response to inflation is all over the map right now. As pointed out here and elsewhere; when you could borrow at under 2% pa to buy property or investments that were making closer to 10%... borrowing is (or was) a no-brainer. Likewise for those fortunate to get a low-cost boat loan before the rates jumped. Many well-heeled folks, including some CFers, have done quite well through this magic period.

Yet here's a financial publication whining about our government doing the same thing.

We're on the cusp of... something. Whether it's just a downturn, a recession, or worse... who knows. But many of our previous assumptions are about to be (or have already been) upended. Like the idea that there will always be cheap oil and gas.

And the 11 yr old Honda pickup I bought last year seems to be worth $2k more right now. Strange times.

Look at the implosion of crypto, the recent spate of other tech layoffs, Musk's most recent ramblings about Twitter.... employment might be high now, but that could soon go off a cliff.

[goboatingnow]

When in danger or in doubt , run in circles , scream and shout.

[valhalla360]

Originally Posted by goboatingnow

When in danger or in doubt , run in circles , scream and shout.

Probably better than buying right now.

[Sailing Hanse37]

Originally Posted by valhalla360

Typically it would be the opposite.

If you already have a loan, your interest rate and payments are locked in.

Where it breaks down is people trying to buy. If rates go from 4% to 10% (yeah we aren't there yet). A 10yr $100k loan goes from just over $1000/month to $1350/month. This thins out the potential buyers.

Of course, there is a lot of fast moving parts to the economy right now and rates are only one part.

If I had to predict, yeah, I agree the boat market is going to get crushed in the next 6-8 months.

I wish for you… but honestly this will not be the case… the second hand market is almost empty, new boats are delivered at very slow pace. So many people i know are waiting for the market to drop… i guess this “situation” will last for at least another 5 years before the market balances. But i’m from Belgium, Europ. Here at home people don’t take a loan for a boat but just pay it cash

[SV-Viento]

First, I'm guessing, as others have noted, Many people who are new to sailing and purchased in the last 2 years will decide that the care and feeding of the boat along with changes in their economic lives will place more used boats back on the market. and Ill guess that this will happen sometime late this year or early 2023 as the inflation/recession winds of change really begin to hit.

Secondly I think it's possible that we see a return to smaller boats that require less "care and feeding" a trend we apparently saw in the financial melt down of 08/09. I like this idea as so much attention, over the last several years has been placed on boats > 40'.

In general im guessing there is not much immediate relief in the market but 12 to 24 maths from now could see more inventory of used and new boats.

Just a WAG.

[Rumrace]

I agree with debt free boating. I built equity taking acceptable losses to be boating not wishing.
I’ve seen many big debt boats parked cause the owners can’t afford to boat.
Our first boat with 2 little ones was a 190 Thundercraft Cuddy and a tent. We camped at all the lock walls on the Trent Severn.
Sold it cash bought a 260 SeaRay cash.
I bought a 18’ sunk Donzi off the insurance company and regret selling it but that and the SeaRay paid for a new 270.
So it goes.
If you’re young and being honest with us and yourself there are tons of sweet 30’ Sailboats around. Budget 35,000.00 and 10,000 upkeep repair and $7500.00 a year to park it. Increase the budget as it applies.
You can get a 1999 37’ Jeanneau in great shape for $50,000.00 or a 2020 Viko 35S tricabin for $200,000.00. The Jeanneau has reached the bottom price won’t go lower for 10 years unless damaged.
The Viko May go up in value but either are an asset to build some equity while dreaming about super yachts

[sailorboy1]

The best deals to be found in used boats is to walk a marina and take note of boats that look like owner hasn't visited in along time. As the marina for the contact info and reach out will a well researched offer.

A LOT of people like the idea of owning a boat more than they like boating. So the boat sits around and they know they should sell it, but believe they wouldn't get a reasonable price so instead hold on it. This is all stupid of course, but most boats are rarely used.

[valhalla360]

Originally Posted by Sailing Hanse37

I wish for you… but honestly this will not be the case… the second hand market is almost empty, new boats are delivered at very slow pace. So many people i know are waiting for the market to drop… i guess this “situation” will last for at least another 5 years before the market balances. But i’m from Belgium, Europ. Here at home people don’t take a loan for a boat but just pay it cash

Sure the market is currently empty but that wasn't the question.

The world govts pumped trillions of dollars into the economy. For those who kept their jobs (most people), there was a big surplus and they had limited recreational activities to spend it on. That translated into buying boats, caravans and other big ticket toys and it drove up the prices.

The govt money is mostly run out and alternative recreational activities (such as international travel) have opened back up. At the same time, inflation is thru the roof. It's also been enough time that people are seeing the long term costs of owning a big boat.

The question is do we see the market suddenly flood as people try to reset to the new economic situation. If it floods, used and new boat prices will take a hit.

[Mike OReilly]

Originally Posted by valhalla360

Sure the market is currently empty but that wasn't the question.

The world govts pumped trillions of dollars into the economy. For those who kept their jobs (most people), there was a big surplus and they had limited recreational activities to spend it on. That translated into buying boats, caravans and other big ticket toys and it drove up the prices.

The govt money is mostly run out and alternative recreational activities (such as international travel) have opened back up. At the same time, inflation is thru the roof. It's also been enough time that people are seeing the long term costs of owning a big boat.

The question is do we see the market suddenly flood as people try to reset to the new economic situation. If it floods, used and new boat prices will take a hit.

Exactly...

[goboatingnow]

Originally Posted by valhalla360

Sure the market is currently empty but that wasn't the question.

The world govts pumped trillions of dollars into the economy. For those who kept their jobs (most people), there was a big surplus and they had limited recreational activities to spend it on. That translated into buying boats, caravans and other big ticket toys and it drove up the prices.

The govt money is mostly run out and alternative recreational activities (such as international travel) have opened back up. At the same time, inflation is thru the roof. It's also been enough time that people are seeing the long term costs of owning a big boat.

The question is do we see the market suddenly flood as people try to reset to the new economic situation. If it floods, used and new boat prices will take a hit.

Governments with sovereign currencies don’t “ run out “ of fiat currencies. But the last thing you need in an inflationary period is cheap money. Hence QE has stopped .

I think people will sit on the fence and wait awhile before taking decisions.

New boat prices can’t fall, if anything they are going to go through the roof, resulting in company failures.

[valhalla360]

Originally Posted by goboatingnow

Governments with sovereign currencies don’t “ run out “ of fiat currencies. But the last thing you need in an inflationary period is cheap money. Hence QE has stopped .

I think people will sit on the fence and wait awhile before taking decisions.

New boat prices can’t fall, if anything they are going to go through the roof, resulting in company failures.

It's "run out" as in the govts have largely stopped dumping massive amounts of money into the system. Certainly they could turn the proverbial printing presses back on but that doesn't look likely with high inflation.

As Rush put it, “If you choose not to decide, you still have made a choice.” Sitting on the fence and waiting a awhile is an action that will drive the market down.

I wouldn't be surprised is some boat manufacturers fail but with the recent glut in demand, many probably got sloppy in terms of finances, so there may be room for cost cutting. Also, they may discount playing the cash flow game thinking if they can get enough cash coming in to get thru the next X months, it will magically get better (I've seen dumber things done).

[BBill]

What I'm currently seeing in Florida is the sailboat market is getting soft for used sailboats under 100k. Can't say what is happening for higher priced boats as I don't keep track of them but money is tightening up all around. Boats are staying on the market longer and advertised prices ARE dropping...no ifs, ands or buts about it.

Same with real estate...less buyers and homes that normally sold in 2-3 days over and above listing price are staying on the market longer. This was an unusual year due to many moving here from the northeast for early retirement due to covid but the flood gates are closing. On any typical day my RE agent always had 8-9 contracts on the table in late 2020 through early 2022...now he is doing 2 a week.

[Jfjunior]

Originally Posted by sailorboy1

A LOT of people like the idea of owning a boat more than they like boating. So the boat sits around and they know they should sell it, but believe they wouldn't get a reasonable price so instead hold on it. This is all stupid of course, but most boats are rarely used.

I have just such friends, but for them to lose a boat means to lose a certain designation. Something like this