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Old 05-04-2012, 11:51   #1
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Is there really a buyer's shortage?

Some people say there are so many boats on the market that nowaday one can get real bargains and I am not convinced of this. And here is my reasonning:
- This year and next year, millions of babyboomers will retire and a lot of them have not yet decided between the RV or the boat.
- For boats similar to mine, prices have on average gone up, even though some are selling for very cheap mostly because they have not been upgraded, but those in good shape are selling for more than anyone could have hoped to sell 6 or 7 years ago when I looked for mine.
- The economy does not bring a lot of opportunities for those looking for good businesses, major executive positions, etc. Some have decided to drop out, at least for a while, and go off sailing and see the world while they have the chance to do it.
- Due to the huge number of boat seekers, people with diffucult to sale boats are putting them on the market at bargain prices, still too expensive for the condition of the boats, this give the effect that there are many "bargains" out there.

Am I out to lunch or is there a little bit of thruth in this? Your opinion?
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Old 05-04-2012, 12:36   #2
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Re: Is there really a buyer's shortage?

people are not seeking boats as there is a lil problem with the money and jobs and the economy sucks eggs and lil insignificant things like htat. is a buyers market as the few who can afford boats are buying new ones. too many fiberglass boats haven't sunk or broken apart -- as did wooden ones, so there is a glut in the supply of oldies. have fun shopping for an oldie-- they are dirt cheep unless the owner thinks he owns platinum.
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Old 05-04-2012, 12:37   #3
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Re: Is there really a buyer's shortage?

I think there is a good bit of truth in your theory. I shopped for 2-3 years after the crash for a very similar boat, around 40' center cockpit, well built cruiser. In fact the Whitby was on my short list.

In the whole time I found no fire sale, super discount, fantastic deals on good boats. Let me add that I have owned a number of boats and used to be a yacht broker so was not an amateur newbie at buying a boat.

I have occasionally seen or heard of a really good deal but so far, always they were smaller boats or serious fixer uppers.

Not to say that it can't happen but I think a well maintained, good quality boat is going to hold value. May not sell as fast in a down economy but if you can wait I think you can get a reasonable price for it.
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Old 05-04-2012, 12:47   #4
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Re: Is there really a buyer's shortage?

Quote:
Originally Posted by rolandgilbert99 View Post
Some people say there are so many boats on the market that nowaday one can get real bargains and I am not convinced of this. And here is my reasonning:
- This year and next year, millions of babyboomers will retire and a lot of them have not yet decided between the RV or the boat.
- For boats similar to mine, prices have on average gone up, even though some are selling for very cheap mostly because they have not been upgraded, but those in good shape are selling for more than anyone could have hoped to sell 6 or 7 years ago when I looked for mine.
- The economy does not bring a lot of opportunities for those looking for good businesses, major executive positions, etc. Some have decided to drop out, at least for a while, and go off sailing and see the world while they have the chance to do it.
- Due to the huge number of boat seekers, people with diffucult to sale boats are putting them on the market at bargain prices, still too expensive for the condition of the boats, this give the effect that there are many "bargains" out there.

Am I out to lunch or is there a little bit of thruth in this? Your opinion?
As someone trying to buy a boat, there's no shortage of boats being listed for sale. It's supposed to be a buyer's market, but most sellers haven't gotten the memo.

There are some buyers, but I'll extrapolate that there aren't too many. My data points are the boats I go see. I went and looked at one two days ago that has been on the market for at least a year, there are three guys showing boats in the office. Not only did it look like no-one had been onboard in a while, the guy showing it claimed not to have been on it at all. I went and looked at one a while back, and it was obvious that the broker hadn't been aboard in some time, because he was shocked at the state of the interior when he opened it, and it had obviously been in that state for some time. Thus, I postulate that they aren't showing these boats that often, thus there must not be that many people looking to buy them. I ran into the broker who represented the seller of my current boat, and he's working nights as a security guard, having given up selling boats entirely. Ergo, there must not be that many boats changing hands.

Unfortunately, the prices people are asking are very high. We could argue all day long about why, but basically because what I've found is that people don't really have to sell. If they do have to sell, they've got paper on the boat, and they won't sell short. I've set a minimum price I'm willing to take on my current boat, and I'll be lucky to get it. The reason I've set is that I figure I can part it out and make $X, and pay $200 to put the rest in the dump. So, if in a year, I haven't found someone willing to pay more than the sum of the parts minus the expenses to keep it a year, I'm going to take a chainsaw to it.

I have the money, the pre-approval, everything ready to go. I just can't find an owner of a boat I like that's willing to value it realistically. There's the rub. The boats that are in good care and being used are in good care and being used, thus not really likely to need disposal. The boats that "need" to be sold are sitting rotting, getting less valuable every day, and yet the owner's are being told they maintain unrealistically high values. It's really hard to put a value on a boat, but the insurance folks and loan folks seem to do a pretty good job. Best as to be found, anyway.

What I've found is that almost all of the boats I've looked at are priced significantly above what they could be financed for, I'd say half over the absolute max they can be insured for. I'm not buying a boat for more than I can insure it for, thus it's pointless to offer. I had one broker start yelling at me when I told her what the insurance company valued her client's boat at. Don't yell at me lady, I didn't just pull that number out of a hat, I got it from the insurance agent. Yell at him.

There's a Beneteau 435 down in So. Cal right now for $150k. The financial world seems to think that's about an $80k boat on the high end. Everyone else looks at the listings and says, "hey, if that old thing is worth $150k, then mine should be worth at least that." Thus the high price perpetuates. Those of us with a decent down payment, but not a huge wad of cash, can't buy any of those boats because we are limited by the BUC value the bank assigns. Brokers aren't limited by that reality, only greed. It does no good to tell them, either. I got one to reply with, "well that's ridiculous, that's just ridiculous" when I divulged what Essex (not exactly inexperienced in boat lending) valued the boat at. That was the end of conversation, they just kept repeating, "that's ridiculous."

That's a really long winded reply to say that no, it isn't a buyer's market unless you're on the very high or low end. Either the boat is so expensive that it has to be sold, or you have the cash to cover the difference between what the bank/insurance value is and the sales price. The rest of us will just have to wait until reality sets in a bit more.

JRM
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Old 05-04-2012, 14:15   #5
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Re: Is there really a buyer's shortage?

Yup. That's the way it is. Not such a buyer's market as far as I can tell. Which is to say -- sellers are not dying to sell, any more than buyers are dying to buy -- so the market is in a kind of equilibrium.

I bought mine after the crisis, hoped for a great deal. Deal after deal fell through as my offers -- which were not ridiculous lowball offers -- were laughed at. Ended up paying full asking price for the right boat when I found it, despite the crisis. Definitely got a good deal -- but because the boat turned out to be really good, not because the price was super cheap.
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Old 05-04-2012, 14:30   #6
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Re: Is there really a buyer's shortage?

There is a certain "down economy" but you have to look at those that are in it and many are the middle class in the 25 to 45 year old age bracket..
and those normally have a family with kids still at home, and arnt in the percentage to own larger boats, of say 30 feet or larger..
Now there are exceptions, as always are, but our business is directly related to boating, both sail and power, and we have seen a large increse in work over the last couple of years..
And those having work done are in an upper age bracket of 50 plus..
at the present we're booking work about 6 weeks out, and just this-morning I took orders on two complete sailboats, dodgers, sailcovers, biminis, wheel covers and all new stainless.. Of over 4k on each boat and both set times to come in and put down deposits.
In the past year, I can only think of One project where the boat was owned by a person of middle age, and he owned his own business..
My personal openion,
You might get a deal if its a small boat under 27 feet, but the larger boats are owned by those that are more of a seasoned individual whose financial ability is stable and not at the mercy of the trends of the market.
Using myself for example, we are just about to retire, our home is paid off, we have rentals paid off, and even without the business, we're in a positive cash flow, and our future is stable.. If we were to put our boat up for sale, we'd be asking top dollar and would not settle for anything less, .. we dont have to..
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Old 05-04-2012, 14:52   #7
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Re: Is there really a buyer's shortage?

I feel that there is a major shortage of good boats that are well maintained. There is no shortage of good boats in poor-derelict shape. The problem is that the owners still want top dollar for them.
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Old 05-04-2012, 15:01   #8
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Re: Is there really a buyer's shortage?

Quote:
Originally Posted by Randyonr3 View Post
Using myself for example, we are just about to retire, our home is paid off, we have rentals paid off, and even without the business, we're in a positive cash flow, and our future is stable.. If we were to put our boat up for sale, we'd be asking top dollar and would not settle for anything less, .. we dont have to..
Guess I should have bought it when I had the chance

Too bad I wasn't in a position to do so... Ah, to everything there is a season...

JRM

-- we're coming up for the sailboat show in two weeks. The admiral has never been in the delta. Any decent boats for sale up there worth looking at?
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Old 05-04-2012, 15:51   #9
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Re: Is there really a buyer's shortage?

IMHO, I think there is a buyers shortage but perhaps more importantly, a lot of inventory. A boat costs money to own and maintain so folks have to be optimistic that they are going to have money to spend on a boat beyond just the initial purchase price. Boomers may be retiring but with their stock portfolios and property prices wiped out, many might not have the disposable income or confidence in future income to invest in and keep a boat. Downsizing plans might be on hold since it takes a while for properties to sell. In our wage slave world today, many younger people don't have the time or disposable income to get into boating - think dirty 30's because that's where we're headed...not a lot of recreational boating in those days.
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Old 05-04-2012, 16:48   #10
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Re: Is there really a buyer's shortage?

Lot of boat inventory does not equal a lot of desirable boat inventory!

So there is a an overstock of the less desirable boats. Its' just like in houses!
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Old 05-04-2012, 17:09   #11
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Re: Is there really a buyer's shortage?

I think like always, it depends on what you are looking for and what is out there. Just for example, I have a friend who is looking at older boats in the low 30-foot range that need some work but are basically structurally sound. He's capable and willing to do almost any kind of work on the boat, and expects he will have to. The prices he's rejecting are less than what I bought a used 20-footer for back in the 1980's! The people I hear complaining that it really isn't a buyer's market are the ones with set ideas on exactly which boat they want, what condition it must be in, and where it must be. Each time you add a parameter like that you narrow your choices drastically, meaning that you end up paying a lot more. Plus, there are a ton of people out there who bought when the economy was rolling and prices were high. That makes their price very sticky. It is really, really hard to sell something for 35-50% less than you payed for it only a few years earlier. And, despite the boat's not selling, there are a lot of people, rightly or wrongly, who feel if they can just hang in there the market will come back and they'll get the price they want. I'm not saying they are wrong, but it definitely distorts the actual value of boats on the market.
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Old 05-04-2012, 17:36   #12
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Re: Is there really a buyer's shortage?

Maybe there is no buyers shortage, maybe there is sellers excess.

Anyways, if one can buy an Ohlson 38 at 27k, this is a bargain market.

Our marina is full of boats with 'for sale' banners.

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Old 05-04-2012, 17:56   #13
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Re: Is there really a buyer's shortage?

When a house sells any real estate agent is able look up what the house actually SOLD for whereas we, the general public are only able to see what it was listed for. Does anyone know if the prices that boats actually sold for is available to brokers, this would be good info to know to buyers and sellers alike i think.

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Old 05-04-2012, 17:58   #14
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After about two years of looking for a boat and about the same time trying to sell an oceanfront condo, I have seen this from both sides(60's song?).

As a buyer, I missed pulling the trigger on one good deal on ONE Tartan 37. After that one I looked at other 36-38 footers and felt they were priced more than they were worth. This assessment was confirmed by the NADA price guide and the fact that the boats had been on the market for a while. Having a set budget for a boat, I started looking in the 33-34 size. Many of those boats were, in my opinion, over priced. All were marketed as "clean", one had alleged engine work done, but on sea trial blew oil (confirmed by mechanic) the boat I finally bought was listed as Bristol condition. To say they took artistic license with that label is gracious. The final prices was significantly less than the asking price, but that was a painful process. The difference is that the buyer wanted to sell the boat and after a lot of talking we reached consensus.

On the other hand as a seller, I am willing to wait out the bottom of the market and wait for what I feel is a fair price. So in many ways I am like the folks who were selling the boats I felt were above the market. It would appear that we are both interested in selling, but do not need to sell and will wait for the price I want.

Bill
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Old 05-04-2012, 18:22   #15
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Re: Is there really a buyer's shortage?

Maybe what you say is true about the market, but all I know is Im getting calls from folks I made and offer to a year ago, and was laughed at !! wanting to see if Im still looking !! I have had brokers tell me that the average time is 2 years to sell a boat and the prices have been as much as half the original asking prices !!so maybe your looking at things a little askance ?? Ive told the 3 folks who called me I would only offer less now! as the market is even softer now then last year !! So maybe if your looking at the boats we are you can get something at a really good price right now !!just my 2 cents from a cash buyers outlook!
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