Will there be a glut of boats for sale once Baby Boomers retire from boating?

[Mike OReilly]

Not only have housing prices increased higher than the rate of general inflation ...

Prices for Housing, 1967-2020 ($100,000) According to the U.S. Bureau of Labor Statistics, prices for housing were 776.18% higher in 2020 versus 1967 (a $776,181.87 difference in value).
Between 1967 and 2020: Housing experienced an average inflation rate of 4.18% per year. This rate of change indicates significant inflation. In other words, housing costing $100,000 in the year 1967 would cost $876,181.87 in 2020 for an equivalent purchase. Compared to the overall inflation rate of 3.93% during this same period, inflation for housing was higher.

But more importantly:

Home prices are rising faster than wages in 80% of U.S. markets
“With home price appreciation increasing annually at an average of 6.7% in those counties analyzed for this report and rental rates increasing an average of 3.5%, coupled with the fact that home prices are outpacing wages in 80% of the counties, renting a home is clearly becoming the more attractive option in this volatile housing market,” ATTOM Data Solutions Director of Content Jennifer von Pohlmann said.

The latest Employment Situation Summary report released from the U.S. Bureau of Labor Statistics indicated that the average hourly earnings for all employees on private non-farm payrolls only increased by 3.2% in 2018.

The pattern is far worse for education costs, healthcare, childcare, ... Add to this the fact that retirement costs have also become far more expensive, and far less secure with the end of guaranteed income pension plans and it's no wonder "the kids today" aren't buying expensive discretionary items like cruising-level boats. Generally speaking, they can't afford the necessities.


Obviously this isn't the entire picture. Culture changes and desired activities with a culture also changes. I have no doubt that some actities are less interesting to "the kids today" than in the past, but you cannot ignore the fundamentals like costs and income.

[Island Time O25]

Redneckrob,

The activities you listed or most of them are all done with helmets, safety harnesses and other safety gear, spotters, etc. Show me a barefoot rock climber without any safety doodahs or a cliff diver just in Speedos and I'll show you a risk taker. How many of those have you seen stateside lately? All I see in my neighborhood are the pre-schoolers walked around on a thether by several nannies. Don't think it's a healthy way to raise responsible adults never mind free spirited sailors.

[ronstory]

Another aspect is the view of the importance of savings in today's society. I am fortunate to have a good job and parents that were relentless about lecturing about the importance of saving money. Dad alway told me never expect social security to be there for you, so save, save, save.

Now fast-forward 35 years, am fortunate to have a good career and now mentor a lot of younger folks in career growth and opportunities. The most of them understand the theory of saving, but don't act upon it. It's more important to have very nice cars, gizmos and rent a house/condo in the downtown cool areas. I'm happy if I can just convince them to go 'all-in' the 401k contribution, let alone reserve more for ROTH IRA or HSA accounts.

The FED asked an interesting question as part of the consumer health surveys after the 08'-09 finance crisis, "How would you handle an unexpected $400 expense?". Almost half of the american surveys said they would need to sell something or borrow the money. Yikes!

These are not the folks that can own a boat, which causes at least 2-3 of those events a year.

Here is a columnist rant on debt, but has a lot of numbers from respected surveys in a single article.

https://www.theatlantic.com/magazine...-shame/476415/

[Mike OReilly]

Originally Posted by Island Time O25

The activities you listed or most of them are all done with helmets, safety harnesses and other safety gear, spotters, etc. Show me a barefoot rock climber without any safety doodahs or a cliff diver just in Speedos and I'll show you a risk taker. How many of those have you seen stateside lately? All I see in my neighborhood are the pre-schoolers walked around on a thether by several nannies. Don't think it's a healthy way to raise responsible adults never mind free spirited sailors.

I think you may be on to something here IT -- at least I think the evidence supports your assertion that our culture is increasingly getting more safety conscious, or as I would say, safety paranoid.

Of course, this is nothing new. We've been on this trajectory for many generations now. Seatbelts anyone? How about speed limits? Food standards? Vaccines... etc.

I think there is an argument that we in the rich societies are not only getting more safety conscious, but are therefore increasingly unable to accurately assess a lot of life's real risks. We are protected from so much now that we can't really measure some dangers. And at the same time we are over-exposed to certain less risky events through our tunnel vision via the TV and now the Internet.

Ironically, sailing and cruising are some of the safest things one can do. The real risks to body (if not soul) are minimal, especially compared to other activities most of us routinely undertake. Yet the perceived risk of sailing off beyond the horizon is likely far higher than the reality.

[skybolter]

It is sad...a good boat can be had for a reasonable price these days, but the bleeding has only begun with the purchase... slip fees and upkeep are sick!!! I figured it was costing over $1k per month in slip fees, insurance and maintenance.

[HeinSdL]

Originally Posted by Mike OReilly

I think you may be on to something here IT -- at least I think the evidence supports your assertion that our culture is increasingly getting more safety conscious, or as I would say, safety paranoid.

Of course, this is nothing new. We've been on this trajectory for many generations now. Seatbelts anyone? How about speed limits? Food standards? Vaccines... etc.

I think there is an argument that we in the rich societies are not only getting more safety conscious, but are therefore increasingly unable to accurately assess a lot of life's real risks. We are protected from so much now that we can't really measure some dangers. And at the same time we are over-exposed to certain less risky events through our tunnel vision via the TV and now the Internet.

Ironically, sailing and cruising are some of the safest things one can do. The real risks to body (if not soul) are minimal, especially compared to other activities most of us routinely undertake. Yet the perceived risk of sailing off beyond the horizon is likely far higher than the reality.

I am not sure if it's safety related. I feel the intrusion of the internet, especially social media, has left a lot less room for simply getting out there and doing your own thing. Like sailing/racing a dinghy on a dull grey Sunday. Unobserved and (perhaps) on your own, because there is (used to be) nothing else to do. Now there is pressure to be seen to be doing something, like eating an icecream and taking a selfie, while many of the really worthwhile activities simply bring along too much 'boredom' which therefore don't play out well on social media.

[redneckrob]

Originally Posted by Island Time O25

Redneckrob,

The activities you listed or most of them are all done with helmets, safety harnesses and other safety gear, spotters, etc. Show me a barefoot rock climber without any safety doodahs or a cliff diver just in Speedos and I'll show you a risk taker. How many of those have you seen stateside lately? All I see in my neighborhood are the pre-schoolers walked around on a thether by several nannies. Don't think it's a healthy way to raise responsible adults never mind free spirited sailors.

And that just goes back to my overall points. First, we all spend far more time with our age cohort then those of other ages. I'm willing to bet based on your comments that you spend far less time with far fewer 20-40 year olds now then you did when you were 20-40. As a result, you've decided on a pejorative "kids these days are all a bunch of wimps on teathers with nannies" world that in no way matches actual reality. Which is that literally no-one age 15-50 decides not to sail because they're worried its somehow "dangerous", that's simply patently absurd if you spend any time with people of that age group. And directly contradictory with the other assertion in this same thread that "kids these days" don't sail because it's boring!
Which brings me to my second overall point. Again, do you think maybe, just maybe, when current sailors sling out a bunch of pejorative and frankly laughable comments about "kids these days" and their entire generation that they might decide they don't want to spend any time in either the sport/hobby or with those people? You're really proving that point in spades with your comments! Maybe, I know this is crazy but maybe, if we just stop with the "kids these days" pejorative comments, stop with the stereotyping, and maybe commit to spending more time with that group and being more inviting we'll find what the crux of the issue really was all along. We've met the enemy and he is us.

[Montanan]

Originally Posted by Joe Deepwater

When is a good estimate of when that will be? What is the average age to retire from boating? The Baby Boomers are a substantial mass of people. Future supply/demand will seem to be out of balance unless there are a large new demographic of buyers. Are boat builders preparing for this?

Do recognize that the demographic chart displayed below are just for the USA and thus a rather limited data set appropriate to that local market.

1) As the Baby Boomers age, so generally do their boats, both that subset of sailors and their boats sail off into the respective sunsets.

The demographics by age subcategory is leveling, one does not see the surge of middle aged persons as occurred in the 1990s and early 2000's. If one assumes that generally it is middle age or older persons that can afford recreational boating then one will not see another resurgence of growth of such demographic influx of wealthy clients.

This thread has touched on the many other societal factors of the boating market, the data shown below is related to USA age distribution.

[cyan]

Originally Posted by redneckrob

do you think maybe, just maybe, when current sailors sling out a bunch of pejorative and frankly laughable comments about "kids these days" and their entire generation that they might decide they don't want to spend any time in either the sport/hobby or with those people? You're really proving that point in spades with your comments! Maybe, I know this is crazy but maybe, if we just stop with the "kids these days" pejorative comments, stop with the stereotyping, and maybe commit to spending more time with that group and being more inviting we'll find what the crux of the issue really was all along. We've met the enemy and he is us.

Nah. I think it's something else. I spend more time with 20-somethings than any other age group because my work is mostly staffed with that demo and my kids are in that group. Among the snowboarding, camping, mountain biking that we all do... the least favorite is a day sail. Never mind cruising. My son's girlfriend complained all (beautiful) day on her first and last sail with us on a 36' Bene. Spotty cell reception, "nothing to do" (except enjoy the beautiful view and look for dolphins). There is a big group of 21-26 yo friends than hang at our place on the weekends. They are all interested in wakeboarding or another houseboat trip or borrowing a beer... but none seem too keen on a (free) leisurely sail on Santa Monica Bay or a weekend in Catalina. The guys in the group would rather spend their time online gaming with headsets. The girls mostly do stuff on their phones- not sure what exactly. We throw no pejoratives or stereotypes. On weekends, we simply encourage anyone who wants to tag along for a sail and a margarita made with real lime and a sunset. "Thanks, not my jam" is a common response.

I suspect there is something going on here beyond grumpy old sailors chasing away perfectly willing youngsters by displaying bad attitudes.

[letsgetsailing3]

Originally Posted by Mike OReilly

Not only have housing prices increased higher than the rate of general inflation ...

But more importantly:
The pattern is far worse for education costs, healthcare, childcare, ... Add to this the fact that retirement costs have also become far more expensive, and far less secure with the end of guaranteed income pension plans and it's no wonder "the kids today" aren't buying expensive discretionary items like cruising-level boats. Generally speaking, they can't afford the necessities.

Obviously this isn't the entire picture. Culture changes and desired activities with a culture also changes. I have no doubt that some actities are less interesting to "the kids today" than in the past, but you cannot ignore the fundamentals like costs and income.

The reason housing prices go up faster than incomes is because of the availability of government-backed loans.

If you don't need to have the money to buy the product, the prices go up. The same phenomenon is occurring with college tuitions and health care. For example, students who can't really afford tuitions getting a masters degree in German Literature at an Ivy league school with a government-backed loan. Or people buying a house with a 5% down payment. A reality check could, and should, be done when the policy is developed.

Well-meaning government programs destroy markets in a capitalistic society. While some government intervention is good in terms of regulating and supporting markets, when the government gets too involved, costs go up and the market becomes inefficient. Folks without the funds end up consuming what they can't afford.

I disagree that the current workers can't afford necessities. I have a lot of young relatives who bought houses this year. Now it's true that they're buying houses instead of boats, but I also think that's a better use of their funds.

[cyan]

Originally Posted by Mike OReilly

Prices for Housing, 1967-2020 ($100,000) According to the U.S. Bureau of Labor Statistics, prices for housing were 776.18% higher in 2020 versus 1967 (a $776,181.87 difference in value).
Between 1967 and 2020: Housing experienced an average inflation rate of 4.18% per year. This rate of change indicates significant inflation. In other words, housing costing $100,000 in the year 1967 would cost $876,181.87 in 2020 for an equivalent purchase. Compared to the overall inflation rate of 3.93% during this same period, inflation for housing was higher.

Mike, I get suspicious when someone quotes a fantastic apparent difference like $100K versus $875K without using normalized dollars, when the real point is only the difference in 4.18% versus 3.93%. That 50-year data shows a slight housing increase over inflation. Cool. The 40-year data I linked shows that since 1978, the average price per square meter of housing in the US is STEADY at just under $130, in 2017 dollars. Constant. Steady. No increase. I don't see the point in stretching the truth, which is simply that the US housing price per square meter is roughly constant for 4 decades, in 2017 dollars.

[slug]

Originally Posted by cyan

Mike, I get suspicious when someone quotes a fantastic apparent difference like $100K versus $875K without using normalized dollars, when the real point is only the difference in 4.18% versus 3.93%. That 50-year data shows a slight housing increase over inflation. Cool. The 40-year data I linked shows that since 1978, the average price per square meter of housing in the US is STEADY at just under $130, in 2017 dollars. Constant. Steady. No increase. I don't see the point in stretching the truth, which is simply that the US housing price per square meter is roughly constant for 4 decades, in 2017 dollars.

Sounds correct nationwide

Some areas...particularly on the coast ...are eye watering expensive

A normal person can no longer live in the neighborhood I grew up in

You could say that folks who live on the coast also make a much higher salary

[Mike OReilly]

Originally Posted by cyan

Mike, I get suspicious when someone quotes a fantastic apparent difference like $100K versus $875K without using normalized dollars, when the real point is only the difference in 4.18% versus 3.93%. That 50-year data shows a slight housing increase over inflation. Cool. The 40-year data I linked shows that since 1978, the average price per square meter of housing in the US is STEADY at just under $130, in 2017 dollars. Constant. Steady. No increase. I don't see the point in stretching the truth, which is simply that the US housing price per square meter is roughly constant for 4 decades, in 2017 dollars.

You mean like the report I referenced earlier which used normalized dollars, showing the great disparity in wealth between generations?

I've never heard of this kind of square meter measure, which simply obfuscates the point that housing costs have increased disproportionately beyond people's income growth (which has largely stagnated for the last 40 years when looked at in normalized dollars). No one buys a square meter. They buy a house. Average house sizes have also increased over the same period. There's no need to ignore the truth.

But the point here is not to debate rising housing costs. The point is that one of the core reason "kids today" aren't buying boats like their grandparents is because the face much harder economic realities. There are other reasons, of course.

[letsgetsailing3]

Originally Posted by Mike OReilly

But the point here is not to debate rising housing costs. The point is that one of the core reason "kids today" aren't buying boats like their grandparents is because the face much harder economic realities. There are other reasons, of course.

You're joking, right?

Because my parents weren't born to wealth. They lived in shared houses with multiple siblings. My dad got wading boots for Christmas one year that were the wrong size. He was mad, slipped and fell and tore them. That was his Christmas.

My grandparents lived through the Great Depression. They weren't out buying yachts. And my parents house, the one I grew up in, would be too small for starter houses these days.

Yes, it matters that over the last 42 years, the average new US house has increased in size by more than 1,000 square feet, from an average size of 1,660 square feet in 1973 (earliest year available from the Census Bureau) to 2,687 square feet last year. Yes, houses cost more partially because they are bigger, and have bigger bedrooms and baths. That they have more features and nicer kitchens as standard features. That every kitchen has to have hard stone countertops. And it matters than fewer people live in those houses, on average. These things affect affordability.

[Mike OReilly]

Originally Posted by letsgetsailing3

You're joking, right?

Because my parents weren't born to wealth. They lived in shared houses with multiple siblings. My dad got wading boots for Christmas one year that were the wrong size. He was mad, slipped and fell and tore them. That was his Christmas.

My grandparents lived through the Great Depression. They weren't out buying yachts. And my parents house, the one I grew up in, would be too small for starter houses these days.

Yes, it matters that over the last 42 years, the average new US house has increased in size by more than 1,000 square feet, from an average size of 1,660 square feet in 1973 (earliest year available from the Census Bureau) to 2,687 square feet last year. It is a factor in making housing cost more that houses are bigger, and have bigger bedrooms and baths. That they have more features and nicer kitchens as standard features. That every kitchen has to have hard stone countertops. And it matters than fewer people live in those houses, on average.

So glad we agree. Housing prices have gone way up -- disproportionally compared to wealth and incomes.

But just to be clear, unless you're a millennial, I wasn't referring to you. The "grandparent" in my previous post is the Baby Boomer generation, not the Greatest Generation of which your grandparents belonged.

And individual anecdotes, while interesting, prove very little with regards to broad societal matters.