Is the Market Really this Bad ?

[Wavewacker]

And in any market, when prices are depressed many owners,unless hard pressed to sell, will hold on to an asset, even a depreciating asset. I've seen several power boats sit for sale by owners who have dug in thier heels on price and they sat for ten + years, wasting away in the weather. When a seller has an intrinsic price, it's not really for sale.

Luxury items (boats, an additional or specialized car, fur coats or jewlry) will have intrinsic values from both sides of the transaction. I'll put a well equiped boat in this category as many are priced according to its possible utility nature, what the possibilities are rather than to the market value of its componets. Plain to see that one 80's Pearson 30, a basic boat sells for 10K, one similar loaded to cruise is asking 35k, but if you look at ebay for the equipment may only add 15k. The end result is the owner is asking 10k simply because it's on the boat and ready to go. Simply a fluff amount based on a preceived functionality. (I don't pay for that).

While there may be a "market value" clearly established by the market with newer and more expensive boats, I'd say older boats really won't establish a market specifically to a make so much but rather to its functionality, having a boat capable of doing X,Y and Z is worth XX dollars. At least that's how I see it.

[Kettlewell]

Hey, I read in Soundings that sailboat sales were up in November by 18 to a whopping 78 boats sold!

[ArtM]

Originally Posted by Wavewacker

While there may be a "market value" clearly established by the market with newer and more expensive boats, I'd say older boats really won't establish a market specifically to a make so much but rather to its functionality, having a boat capable of doing X,Y and Z is worth XX dollars. At least that's how I see it.

I agree with your assessment. A boat complete, clean, and ready to sail with all desirable equipment does cost more.

I diagree that it is is worthless though. I think there is value in having a boat delivered ready to run - though that value will vary from one person to another. A high income earner, for example, who suddenly gets the opportunity to sail will gladly pay an extra 10k to avoid several weeks or months of preparation work - and plan to get it back on resale.

[Celestialsailor]

People are interesting. Whether it's boats or houses, there seems to be a certain group that get stuck with a "look and see" attitude. I hear how the economy is bad or going to dip again, we're going off a cliff or some other doom and gloom scenario.
All you have to do (if you were really going to buy instead of kick rub-rails) is to look at quarterly trends. In my area the surplus of houses has disappeared the last 4 quarters. Housing starts up 11%. Unemployment in the sevens and falling. More people are working and beginning to spend. They are smart enough to buy now.
The same doom and gloom people will say a house or boat is too expensive when the prices are back up. Seems to be an endless cycle with them.

[SURV69]

A boat is only worth what people are willing to pay . . . plain & simple.

Top it off with what people are willing to pay(for the boat), along with what they're needing to pay to "have", the boat, which is usually substantial.

With plastic boats from the 1960's still around along with all the other used boats since(50 years of used boats is a lot of boats) and a shortage of disposable income, there's no place for the price of a boat to go, but down.

Even a boat that's no longer used, is going to cost the owner thousands of dollars a year to keep it on blocks while it sits and deteriorates into a less and less valuable commodity.

Eventually, unless an owner(seller), has a lot of disposable income, the boat becomes an anchor around the neck and the continuous payment of storage makes that anchor heavier and heavier.

If you want to get rid of this boat, which is really what you want to do, then you've got to stop treating it as an investment on your future.

[Sailor_Hutch]

1-"A boat is only worth what people are willing to pay . . . plain & simple."

2-"You've got to stop treating it as an investment on your future."

Rarely are used goods an investment, by my reckoning. That includes cars, boats, and these days - houses. So I'd agree with the statement, but it boils down to what a person needs to live. If you live on your boat, then it's not an investment, but it's not necessarily a poor financial choice. Living costs money.

I would add to the aforementioned quote that, "A boat is only worth what people are able to pay ..."

When I was younger, I fancied antique automobiles. I always wondered why they were all priced at $4900 or less. Finally, I asked one of the sellers why all the great cars at the show seemed to be similarly priced. These were commoner cars (not the Duesenberg or Auburn variety). He said it was because most banks would not loan on a fifty year old "commoner" car. The price was set by what most people had in their checking accounts ....

[Celestialsailor]

Originally Posted by Sailor_Hutch

1-"A boat is only worth what people are willing to pay . . . plain & simple."

2-"You've got to stop treating it as an investment on your future."

Rarely are used goods an investment, by my reckoning. That includes cars, boats, and these days - houses.

I would disagree...Especially with a house. My house in Hawaii tripled in price from 2000 when I bought it to 2005 when I sold it. then waited until 2009 to buy back into the California market. I have been mortgage-less ever since.
Certain models of cars steadily increase in price...like my 1960 Thunderbird. I kick myself for passing on a stock 1949 Harley in 1978 that was for sale for $3500. It is now worth close to $40,000. Boats?...a little more difficult given that there are so many and some of mediocre construction. I have chosen a Hallberg Rassy for that reason. Will I make money on her?...Maybe not but I will break even. I have kept track of my bills into her and still come out on top.
I personally feel 2014 will be a game changer in the economy. But we'll see. I keep an eye on quarterly trends and react accordingly.

[wolfenzee]

Anything is only worth how ever anyone is willing to pay....though you can find someone willing to pay more/sell for less....if you are in the right place at the right time.

[SURV69]

Of course the banks and money lending changes what people are willing to pay.

But this is with relatively newer boats.

So now, a person who might be capable of of paying $8,000 "cash", for a boat, might . . . now . . . be willing to pay $12,000.

I've never owned a boat newer than 1975, so the idea of bank financing of the boat is not an option, unless one gets a "personal" loan.

As far as land values from 2000-2005, increasing as they did . . . that's fine and well, but we're presently paying the piper for the bubble you successfully road on.

[Celestialsailor]

Originally Posted by SURV69

As far as land values from 2000-2005, increasing as they did . . . that's fine and well, but we're presently paying the piper for the bubble you successfully road on.

There was no riding it...I had no intention of selling initially. When my house was amortizing 20% a month and GDP is 3% a year, something was wrong. It had to collapse. All I did was get out. I rode nothing. It was greed that allowed people to stay in. When the dust settled, I bought back in. If it goes crazy again, I'll do the same thing. This has also happened in the stock market a few times.

[Randyonr3]

Originally Posted by Celestialsailor

There was no riding it...I had no intention of selling initially. When my house was amortizing 20% a month and GDP is 3% a year, something was wrong. It had to collapse. All I did was get out. I rode nothing. It was greed that allowed people to stay in. When the dust settled, I bought back in. If it goes crazy again, I'll do the same thing. This has also happened in the stock market a few times.

I agree.100% with your decision. I for one.did ride the bubble and sold at the peak, and do you think I have any remorse, HELL NO, I played the market and won. And anyone that didn't pay attention to their investments had their head up their bung.
My boat, a FIRST 42, is also an investment, bought for 100k about 10 years ago. Still selling for about the same price, some higher, some lower, but average about the same.
Now the gain, we've lived on it for 10 years. It's paid for itself and if I walked.away today, I'd be ahead.
The market will rise and fall, its what you do with it that counts.

[Nessus]

Originally Posted by Randyonr3

I agree.100% with your decision. I for one.did ride the bubble and sold at the peak, and do you think I have any remorse, HELL NO, I played the market and won. And anyone that didn't pay attention to their investments had their head up their bung.
My boat, a FIRST 42, is also an investment, bought for 100k about 10 years ago. Still selling for about the same price, some higher, some lower, but average about the same.
Now the gain, we've lived on it for 10 years. It's paid for itself and if I walked.away today, I'd be ahead.
The market will rise and fall, its what you do with it that counts.

I hate to break it to you but if you account for inflation you're down about 45K. However if you invested the money you saved on a mortgage you might break even. You've got to live somewhere. However in the future the First 42 will begin to lose value where as a few acres somewhere will certainly gain value.

EDIT: This is all academic. You only live once.

[savoir]

100+ for a First 42 ? Only one thing to say there " Yer dreamin' ".

Anything over USD75 should be looked on as manna from heaven.

[Doodles]

Originally Posted by savoir

100+ for a First 42 ? Only one thing to say there " Yer dreamin' ".

Anything over USD75 should be looked on as manna from heaven.

Six sold in the US in last two years per soldboat.com (plus two project boats) and they went for $66K, $115K, $70K, $110K, $125K and $175K. Average was $110K which is exactly what the most recent one sold for (7/12), so $100K see about right to me.

[TomandAnitas34]

We are in a situation here. The national economic picture is grim. The printing of money in the trillions to fund debt will have a gradual impact on the sailboat market. If you have savings of any kind, its value in purchasing power is being reduced daily. At the same time, new boat prices must continue to rise to offset increased labor and materials costs. So here, the two trends are going opposite directions. Now if you have saved and invested those funds in a mutual fund or some other financial instrument, you will be lucky to get a return of 5% ( which will be taxed ) and that is in the face of an 6-8% inflationary headwind. The message is clear. If you can buy, and your income is stable enough to support the on-going costs associated with boat ownership, this probably is the time.
The ugly downside is fear. The, "yeah, my income is good today, but....". Its hard to imagine where we are headed. ( My best guess is a cross between Japan and Argentina. ) Your guesses will be different. Each of us can find many documents to back up our perspectives and the one certainty is, that none of us actually know. So. If you are on a fixed income, in an economic environment like this, that "boating retirement" thing may be perceived as nothing short of financial suicide. That is fear. Real substantial fear in the boat market place. Its keeping hundreds of buyers out of the market.