Collapsing brokerage market for Monohulls

[Cotemar]

Originally Posted by Shrew

@Cotemar

I saw the new rig a few times down in the anchorage at the bottom of the river along with your mooring up the river. We're just a little further up-river from you.

Beautiful new boat.

Hi Shrew,

We have a good thing going in that beautiful area. Would love to meet you guys next season. Stop by we can have a sun-downer together.

[Island Time O25]

Also a big problem is the marine industry view of and approach to refits, etc. In reality there should be no significant difference prices wise refitting a 30 year old boat of one brand vs another. But we all know that exactly the opposite is the case. A refit of 80s Swan will probably be twice as expensive as a similarly sized and aged Catalina, if both done by a yard. Just because one is a Swan and the other is Catalina. So the market for older Swans is squeezed by this reality as few potential buyers can justify forking out $150K for purchase + another $100K for a refit of a 30-35 year old boat vs. "only" $30-50K Catalina purchase price plus another $30-50K for a thorough refit as you can get a 5-7 year old production boat for around $100K-$120K and have no need of any refit for the next 10-15 years.

No matter ho wit plays out some segments of the boating crowd will be hurt. Lower end if we price or legislate the old, pre-derelict boats out of existence. Or upper end if we introduce draconian luxury/disposal taxes to encourage re-use and refitting old boats to help with the environment issues and some such.

BTW I recall in my college days in the early 80s an economic study of the effects on environment of making from the scratch a brand new gas saving small car vs. continuing using an old gas guzzler. The results were astonishing. The gas guzzler would only lose to new car if the new car was to be used no less than 20 years (which was never the case for such cars back then). That included mining the ore for that new car, energy required to make it into steel, produce the car, transport it to point of sale, plus whatever gas it would still use, etc. and comparing these totals to the extra gas and repairs required for the old guzzler. Meaning that to really help the environment a person would be better off just continuing driving the old car rather than getting a new supposedly "more eco-friendly" one. Basically whatever pollution the old gas guzzler will be spewing for the next 20 years was significantly less than the pollution required to make a new "eco-friendly" car from the scratch + whatever the residual pollution such small car would still be making in the next 20 years. I believe the same result can be presumed with the boats. And if true is a good way to get the boating public to accept older boats as a really eco-friendly alternative to new ones.

[Polux]

Originally Posted by Brooderman

...

The fact that the mid range market isn't selling will at some point change - those boats will start to sell for cheaper and cheaper - putting a downward pressure on the lower price ranges as those boats will soon appear to be overpriced.

And then the low end will collapse as well. ...
And at the very bottom of the market, what happens to the 40' boat that is for sale for $35K that needs a 20K refit. How far from being not worth the effort is it? ...

Any way you look at it, there is opportunity out there.
....

Yes, that is already happening. There are boats out there that nobody wants because they know the price of refitting them decently is about the same as the boat value and they would never recover the money put on the boat.

Yes, as in any market there are always opportunities but there are also a lot of deep holes waiting for dreamers, the kind that will buy a 45ft offshore bluewater boat for 40 000 USD because it is all the budget they got for it, because they want a 45ft boat and because they want an offshore boat.

Dreamers buying boats for little money thinking they will be able to bring them to former glory to learn later, at their own cost, that they have no money for it, no money for maintenance, no money for a marina and it will be another boat littering some sheltered shore. There are so many of those that legal measures are being taken to prevent that.

[CarinaPDX]

As noted earlier, the market for cruising boats is anything but transparent: the brokers keep the selling prices to themselves in order to try to keep prices up. Actual selling prices are often much lower than asking - watching thousands of dollars in slip fees, insurance, and maintenance go down the drain every year forces sellers to eventually accept the reality and come to terms. I don't think the market has changed all that much since the real estate crash - it is a buyers' market.

The fundamental truth of our world, or at least the US part of it, is that over the last 4 decades 40% of the wealth of the US that once belonged to the middle class has moved to the top fraction of 1%. Cruising has been a middle class endeavor, and the market for used cruising boats has suffered as middle class wealth has evaporated. Simply put, the population that in the past who could buy a $200k boat is a lot smaller today. I don't see that changing anytime soon. So demand is way down.

On the supply side, fiberglass boats die very slowly and builders are still pumping out new ones. And older boats, particularly over 30 years, are very difficult to get financed so the buyers for older boats often have to pay cash, limiting the potential pool of buyers. And those who can pay cash often prefer to finance a newer, more expensive boat. Add to that the inevitable updates required (new engine, electronics, sails, upholstery, canvas, plexiglass, etc) and problems such as rotten balsa cores and it is easy to see why old boats are hard to sell.

A few years ago old Pacific Seacraft 37s were widely offered for $120k. The first hull (technically a Crealock 37) sold last summer for less than $20k. Some of the wood interior was rotten and the deck coring was failing, plus several other more modest problems existed. Who is going to buy that? Someone who can put it in a yard and work on it themselves - not a lot of folks like that anymore. Anyone else will avoid the risk, cost, and delays of paying for professional repairs and just buy a boat in good condition.

This is a great time to buy a cruising sailboat (and a terrible time to sell). I don't see it getting any better. So if you want to buy, make an offer for a used boat in good condition. If you want to sell then set a reasonable price based on recent selling prices, not asking prices, get out from under the slip, insurance, and maintenance costs, and get on with life.

Greg

[nautical62]

Certainly Catamarans are more popular, but a quick look at sailboats listed on Yachtworld indicates only about 5% of sailing vessels for sale are cats. I don't think this is devaluing monohulls.

I think the bottom line is the supply of used monohulls keeps increasing but the demand for them isn't increasing. This dictates lower selling prices.

I no longer own, not because of boat prices, but because of the great increase in all the other associated costs and headaches.

[robert sailor]

Originally Posted by Island Time O25

Also a big problem is the marine industry view of and approach to refits, etc. In reality there should be no significant difference prices wise refitting a 30 year old boat of one brand vs another. But we all know that exactly the opposite is the case. A refit of 80s Swan will probably be twice as expensive as a similarly sized and aged Catalina, if both done by a yard. Just because one is a Swan and the other is Catalina. So the market for older Swans is squeezed by this reality as few potential buyers can justify forking out $150K for purchase + another $100K for a refit of a 30-35 year old boat vs. "only" $30-50K Catalina purchase price plus another $30-50K for a thorough refit as you can get a 5-7 year old production boat for around $100K-$120K and have no need of any refit for the next 10-15 years.

No matter ho wit plays out some segments of the boating crowd will be hurt. Lower end if we price or legislate the old, pre-derelict boats out of existence. Or upper end if we introduce draconian luxury/disposal taxes to encourage re-use and refitting old boats to help with the environment issues and some such.

BTW I recall in my college days in the early 80s an economic study of the effects on environment of making from the scratch a brand new gas saving small car vs. continuing using an old gas guzzler. The results were astonishing. The gas guzzler would only lose to new car if the new car was to be used no less than 20 years (which was never the case for such cars back then). That included mining the ore for that new car, energy required to make it into steel, produce the car, transport it to point of sale, plus whatever gas it would still use, etc. and comparing these totals to the extra gas and repairs required for the old guzzler. Meaning that to really help the environment a person would be better off just continuing driving the old car rather than getting a new supposedly "more eco-friendly" one. Basically whatever pollution the old gas guzzler will be spewing for the next 20 years was significantly less than the pollution required to make a new "eco-friendly" car from the scratch + whatever the residual pollution such small car would still be making in the next 20 years. I believe the same result can be presumed with the boats. And if true is a good way to get the boating public to accept older boats as a really eco-friendly alternative to new ones.

I disagree with your concept on refit. An older budget boat will never be worth refitting so it will die a slow death. A boat like a Swan is worth refitting for certain buyers as they have a following much like Hinkleys and the like. You might consider putting a chunk of cash into an old Porsche but you'll throw the old Ford Fiesta out when the first major repair is required.

[Douglas L Hale]

What a great read, thanks everyone❗️[emoji41]✌️️

[Elie]

All these comments and opinions are interesting. I think that mass production of boats, by very large builders, Europeans mostly, created a new situation. First, the design if outstanding and like cars, there is a continuous process of remodeling and changing features that distinguish new boats, and render older models a bit outdated: Wide stern, dual wheels, contoured windows modern living area good looks are the norm now. deck harware is somptuous. And all this at an impressive low price that drives the brokerage market down accordingly. But, when you look ad important structural and inherent quality, there you see the where the savings are made. Grids that are just glued, decks that are not trough bolted, and keels that tear off in a seaway during a blow are common occurence with some of theses boats. I Made a passage from Norfolk to Porto Rico on a recent French boat, I was surprised to see how the doors opened by the twisting of the hull in 35 knots of wind , to the point that water was squirting from a through hull. Impressive, and I was glad to arrive!.
The ferocious competition of the big builders, has automatisez and robotized the productions, not for the real benefit of the buyers on the long run.
By the way cruising catamarans are not made for the offshore passage when its blowing.

[Island Time O25]

Originally Posted by robert sailor

I disagree with your concept on refit. An older budget boat will never be worth refitting so it will die a slow death. A boat like a Swan is worth refitting for certain buyers as they have a following much like Hinkleys and the like. You might consider putting a chunk of cash into an old Porsche but you'll throw the old Ford Fiesta out when the first major repair is required.

I was using these as examples of what does not make sense. Neither actually does. Buying a 30-35 year old Swan in need of a total refit for $150K, putting another $150K into it and in the end having spent $300K for a boat that is now worth $200K, may be $250K makes as little sense as getting an old Catalina for $50K, plus another $50K for a budget refit and wow, she's now worth all of $60-70K. Both situations are nuts. But in a Swan example it's probably a rich nut who can afford to sit on a $200K boat for which he ended up paying $300K.

[n13L5]

Originally Posted by Caribbeachbum

So my question is, well, there are two questions, actually. And I'm especially interested in hearing brokers' thoughts on this.

First, do you agree? I know I could have this all wrong.

And second, do you think sellers are interested in hearing what would be quite low-ball offers?

-

Don't expect brokers to agree with you no matter what

Self preservation is still commonly practised among life forms on this planet,
including those bound into that ponzi scheme we've been taught to call "capitalism"
during better times past, when our owners still felt the need to make an effort
to deceive us about its real nature.


Also, without knowing anything else, I do detect, that your overall thought construct somewhat conveniently follows your wish for getting a better than good deal on a monohull.

The same exact reason I came to your thread...

[Polux]

Originally Posted by robert sailor

I disagree with your concept on refit. An older budget boat will never be worth refitting so it will die a slow death. A boat like a Swan is worth refitting for certain buyers as they have a following much like Hinkleys and the like. You might consider putting a chunk of cash into an old Porsche but you'll throw the old Ford Fiesta out when the first major repair is required.

Yes, I agree. Very high end top boats that were not made in great numbers will have a luxury market, specially the ones that were advanced designs in their time and that still sail reasonably well, the Swans are a good example.

There is in Italy a shipyard specialized in recovering and maintaining Swans and they don't have lack of work, at least when I had there my boat, some years ago.

And it is not only Swans, beauties from the past, namely between the 30's and 60's, high end boats at the time and mostly on off are also being recovered. That has nothing to do with money in a sense of being a good investment but all with money in a sense that only a guy with lot's of money can have a boat like that in pristine condition. They are beautiful boats that bring prestige to the owner.

This year in St. Tropez:

https://www.youtube.com/watch?v=rVU_48aVoN8

Regarding the American market a thing that has not been emphasized enough is the large amount of boaters that go for a motorboat or a motor cruiser instead of a sailing boat. The percentage in Europe is much smaller.

[Symphony]

the loan/mortgage market is really open now - banks are coming back to the marine market aggressively. Easy loan terms will eventually lead to more sales of boats that are good collateral: new boats and quality-name-brand used boats.

the US middle class is gaining disposable income and job security now. they will be or are in a position to buy a boat.

it's a buyers market for classic plastic of the 1970s, but then it always is for those boats. As young people become interested in DIY projects and self-sufficiency the older boats will gain in appeal, as long as the boat was quality-built with ways to fix and repair internal wiring, plumbing, tanks, etc.

the cat market is filling with ex-charter boats (bought for tax-credit) that are economically unfeasible to refit even after 7 years of use.

high end cats are hanging strong on price. high quality monohulls have gained in price over the past 4 years, and continue to gain in selling price.

the sail boat market will not likely even be as big as it was in the 1980s. people are not generally inclined to learn new physical skills.

[ramblinrod]

Very interesting thread.

We are still seeing boats move well and for good prices in Ontario.

Why?

1. Not deteriorated by salt water.
2. Not deteriorated by intense sun.
3. Seasonal haul out.
4. US$ exchange rate.
5. Strong housing markets.
6. Financial stability.
7. No charter business sell offs.

Presently, boats in good condition are annually depreciating by 10% of the prior year's value, and that hasn't changed since the crash in 2008.

[Polux]

Originally Posted by ramblinrod

Very interesting thread.

We are still seeing boats move well and for good prices in Ontario.

Why?

1. Not deteriorated by salt water.
2. Not deteriorated by intense sun.
3. Seasonal haul out.
4. US$ exchange rate.
5. Strong housing markets.
6. Financial stability.
7. No charter business sell offs.

Presently, boats in good condition are annually depreciating by 10% of the prior year's value, and that hasn't changed since the crash in 2008.

That's about right even if the depreciation is not a flat line (first year depreciates more and than it starts to depreciate a bit less each year).

That would means, for instance, that a Bavaria 46, would sell in 5 years for half the price of a new one. That seems about right, maybe the Bavaria can even have a smaller depreciation, if the owner did not bought a lot of extras.

[n13L5]

Originally Posted by Polux

Yes middle class paid for most for the crisis and that situation is more prevalent on Spain, Portugal and Italy were the market (new and used) really come down making for more offer and less demand bringing the used boats price down. But the worst of it has already gone and if a recuperation is yet very slight, things are now a bit better, following the economic recover of those countries.

If you believe there's any kind of "recovery" in either the U.S. or Europe, you aren't seeing the drastically increasing difference between money in circulation vs goods produced. The leaders among the ~150 families controlling all banks and major corporations world wide (see Swiss university study) are just optimising the altitude for the other shoe to drop.

Banks earn ok during ordinary times, but if they can generate booms and busts, they do even better - privatised profits and socialised losses aren't some kind of accident. Its engineered that way. There has been no currency collapse in history, where Governments didn't cover the bankers at the expense of their population.

But what really gets their profits flowing is war. Lend money to all sides for weapons and suck the remaining populations of all involved countries dry with interest payments for decades afterwards.

.

I don't see any prices on 'luxuries' of the (former) middle class recovering any time soon, cause all the money the central banks are "printing" is not going to Joe Public. Deflation will continue until "they" are" ready with whatever events they're currently trying to set up.