What Do You Think Is the Current State of the Sailboat Market ?

[dave777]

Originally Posted by jordanship

From what I am seeing there's kind two markets. One is made of people looking for a deal. The other is people who just want a boat. The second group is increasing, but it is still a tough market.

Both of your groups want a boat. But it's likely that only the 'deal' group has people knowledgeable about markets to have had the foresight to avoid getting overextended during the credit and housing bubbles. There are simply just fewer people today with the boating desire AND cash.

For the second group who just wants a boat, I don't understand how they get an easy loan from a bank to buy a boat. It's darn near impossible for most to get a loan for a house now. Or will they use their home equity? Oops, game over. They've still got their home mortgage, and the fact that their home may be worth 40% less. And why should housing depreciate more than boats, when land will always be there and boats will always end up being worse less than zero?

But you've only described demand so far. What about supply?

There are several sometimes overlapping groups. Owners who are 'underwater' because they owe more than the boat is worth. There are owners who believe or hope that we will have some sort of dramatic recovery. There are owners who are not getting enough out of their boat to justify the total of insurance, maintenance, storage, docking, as well as finance or opportunity costs. What if they had bit the bullet and sold 3 years ago at a loss, but put that money in gold?

Then there are owners who are enjoying their boats regardless of the cost. They are the only ones who should own a boat. Period.

Everyone else should sell, at auction or on eBay if a regular listing doesn't get you a bid. The only reason to wait to sell at a higher price is if you believe you can predict the future. But if you're so smart, why not use that power to pick stocks or racehorses? Any future sale will need to compensate you for waiting with the ongoing costs of finance, maintenance, storage, insurance, etc.

[CharlesFCook]

Originally Posted by dave777

Everyone else should sell, at auction or on eBay if a regular listing doesn't get you a bid. The only reason to wait to sell at a higher price is if you believe you can predict the future. But if you're so smart, why not use that power to pick stocks or racehorses? Any future sale will need to compensate you for waiting with the ongoing costs of finance, maintenance, storage, insurance, etc.

Amen Brother

[ViribusUnitis]

At least the boats I watch on yachtworld.com don't seem to be moving.

I've got some listings that I've saved for close to 2 years now. Granted not all of the listings, but many of the boats I was looking at in the listings 2 years back are still for sale. (and I still can't afford them, but it's nice to dream.)

[Richard Jordan]

As to supply, most yacht owners I know, especially sailors, are pretty well off. There's not really a big group of people underwater. Most deals that I have been part of have come about simply because the owner is tired of the sale process and liability of owning a yacht - not that they have to sell because of financial constraints. But there are still these type of deals out there, and it is a buyer's market.

[martinjrichter]

One of the major issues is the lack of financing for boats over twenty years old. Most banks won't touch these boats no matter how much the buyer wants to put down. So buyers have to come up with nearly full price to purchase the boat.

If you want to sell your boat, seriously consider lowering the price and carrying the loan. The cost of storage for you boat over the winter (or in one case several years) can be deducted from the price, no loss to you and an incentive to a buyer.

[David_Old_Jersey]

Originally Posted by denverd0n

I know a guy who had an absolutely beautiful Catalina 34 for sale. He first put it on the market almost 4 years ago for $60k. Then he lowered it to $50k. Then he lowered it to $40k. Then he convinced himself that the market was looking up, so he repriced it to $45k. He recently sold it for $32k.

That's $32k less 4 years dock fees, and maintainenance. IMO with boats a quick sale is a good sale, even if you have to price for that.

[sailorboy1]

Originally Posted by dave777

For the second group who just wants a boat, I don't understand how they get an easy loan from a bank to buy a boat. It's darn near impossible for most to get a loan for a house now. Or will they use their home equity? Oops, game over. .

I don't really understand why I keep reading that you can not get a loan. I got a house and a boat loan this year and it was not harder than it was 20 years ago.

Now it is probably (hopefully) harder for people who never should have gotten a loan in the first place to get a loan.

[Boracay]

I have it from a reliable source that the boat fairy has been reassigned from its current task (keeping cruising kids happy) and is hoping to be able to assist boat owners with their boats in the near future.

As soon as she has finished fitting out my boat I'll send her over to assist the tree sprites in getting buyers out of the woodwork.

[dave777]

Originally Posted by Don Lucas

I don't really understand why I keep reading that you can not get a loan. I got a house and a boat loan this year and it was not harder than it was 20 years ago.

Now it is probably (hopefully) harder for people who never should have gotten a loan in the first place to get a loan.

You must have your finances in order, good for you. Don't need a loan myself.

But the fact is, the majority of Americans now can't get housing or boat loans. This comes just after a 10 to 20 year stretch of an overextended credit bubble. Towards the end of the credit bubble, all you had to do was fog a mirror to get a loan.

Too many houses and boats were built to feed that demand. Never before seen numbers of "ordinary" people with more than one boat, and more than one house. It will take a long while for that excess supply to sell off, in part because the next generations have even less money with student loans like we've never seen before. And the loans won't become available so easily again, probably not even in our lifetimes.

Simple supply and demand has swung the other way for houses and boats.

And for those trading up, houses or boats, expect the same sort of discount selling your old as you hope to get on the new one.

[Mr B]

Give it another five years, The Boom will be back, Ten years, It will crash again,

This is the fourth recession I have been through, 71 84 90 08. Give or take a few years, on average 10 years to a Boom crash.

The rich buy boats, because what else can you spend a $100,000,000-00 pay check on.

You only lose money if you sell in a crash period, if you wait another 2 or 3 years, The market is up and running again,
Thats when you sell, when the market is at its peak, not when it is going backward,

The boat market prices here are over the top. But the owners are dropping 50 grand off a 300 grand boat and still not selling,
Thats means they were way over priced to start with,

The internet is bringing world wide selling to your Chair in front of the computer,
So you know what a boat is worth, Every boat for sale is right in front of you.

The only travelling you do, is to get another cup of coffee, EGad, you have to walk to the kitchen for that,

Not any more, You just bought that coffee machine off the internet and its sitting beside you.

Sorry, You still have to get up for a leak, Hahahahahahaaha

[nautical62]

I think mostly it's just slow. I know x-charter boat prices are down and moving very slow. I suppose it could be called a buyer's market, but with so many potential buyers short or cash, it's just slow.

I think increasing insurance rates due to storms and increased storage and dockage have also helped slow things down.

[BoxerOne]

We are actively looking for a boat but it is hard to read what is really going on.
We have a preapproved loan and down payment in hand for the type and year boat that we believe will suit us (5-10 year old, 40ish production boat) but haven't seen a large number of boats on the market yet that suit our needs. Perhaps folks are sitting on these boats enjoying them waiting for the market to improve before they trade up or sell?
We have been researching this for over a year and are ready to purchase. Hopefully the end of the season here in New England will bring more boats on the market.
I don't expect to steal a boat but like the housing market, sellers have to understand the market has changed. If they hold out too long, by the time the market picks back up, they will be competing with newer and many more boats on the market.

[dave777]

Originally Posted by Mr B

Give it another five years, The Boom will be back, Ten years, It will crash again,

...

You only lose money if you sell in a crash period, if you wait another 2 or 3 years, The market is up and running again,
Thats when you sell, when the market is at its peak, not when it is going backward,

The boat market prices here are over the top. But the owners are dropping 50 grand off a 300 grand boat and still not selling,
Thats means they were way over priced to start with,

5 years until another Boom? Not likely. We are not in any sort of traditional boom and bust, and the historical record has nothing to compare with today. There has been no other ordinary business cycle in the 20th century plus in which the u.s. dollar was on such incredible shaky ground as it is today. Furthermore, the U.S. has never been in the Ponzi Scheme business like it is today, the U.S. has never funded it's operating costs with another credit card.

The media is not reporting it, but we are selling treasuries to Goldman Sachs. The Chinese and Europeans stopped buying. Then Goldman Sachs sells them back to a different government agency, yes at a mark up. That government agency is not printed paper money, it just prints electronic money. We are paying our national bills by adding lines to a spreadsheet. No increased GDP, production, natural resources, etc. just I.O.U. which are somehow going to be paid in the future. There were a dozen workers to every SS recipient at the start, now it's something like 2.4 workers and shrinking. Poniz scheme - Madoff scheme. Politicians promise cheeseburgers today that they will gladly promise someone else will pay for Tuesday.

No, we ain't getting out this like an ordinary business cycle.

And you are wrong about only losing money selling in a crash period. If your money makes 5% in one investment and -10% in another 'investment' then you lose money. Just think as a boat as an investment losing 10% per year. Could be more percentage wise. How much is insurance alone, plus maintenance, storage, your time. Plus the boat is depreciating, getting older. You lose money waiting.

But I do agree with you about boats not selling are overpriced.

Market price is the price that a boat sells at. The market price during the bubble years or when someone bought a boat are not the market price today. If a boat doesn't sell, it is priced too high.

[Cheechako]

Most Brokers have never been realistic about pricing. It's not uncommon to wait a year or more in a good economy when you start with their first price. A good example is the Hans Christian 38 I had. It was probably the premier one on the market. (full canvas, recent sails, new decks, wind gen, dingy, multiple anchors etc etc) They were all priced at about $135k at that time. None were selling. I priced mine at $138k going with the brokers recommendation. 1.5 years later I came to my senses and sold it for $90k.

[JRM]

Originally Posted by Cheechako

Most Brokers have never been realistic about pricing. It's not uncommon to wait a year or more in a good economy when you start with their first price. A good example is the Hans Christian 38 I had. It was probably the premier one on the market. (full canvas, recent sails, new decks, wind gen, dingy, multiple anchors etc etc) They were all priced at about $135k at that time. None were selling. I priced mine at $138k going with the brokers recommendation. 1.5 years later I came to my senses and sold it for $90k.

This is the hard part for us. I've found a boat that really talks to both of us, but she's terribly overpriced. Like double. Got an insurance quote on her and BoatUS will only even insure up to a max 40% of asking price. Thus, we wait, and continue looking. The waiting is the hard part. At some point the seller is going to figure it out and dump it, hopefully it'll be us that gets it. But that may be a year or two down the road.

Until such time I'll just have to keep making my estimated boat payments to myself. I figure every one I make now is one less I make later to the bank. We're blessed in that we already have a smaller boat, so we aren't completely missing out on sailing. It does make it much harder to spend money on the current boat, knowing that it's money that could be spent on the bigger boat later...

In an eerie parallel, we're having our seven year old buy his own Halloween costume this year. He's been agonizing over the decision of which one to get, trying to figure out what he can and can't afford, and whether it's really worth twice the price to get a popular character (Valiant, anyone). We've set him up with a "second job" (OK, now it's getting scary similar) doing pet care so that he can make up the difference for the one he really wants (and before the PM's start... yes, his first "job" is school). Luckily for him the costume catalog isn't run by people with emotional attachments to their costumes, nor does it have agents telling them that the costume market is heading back up and they should price accordingly!

JRM