Boat sales and the coming reccesion.

[Anders]

Originally Posted by contrail

So I take all of these analyses with a grain of salt, and suggest we sit back and see what actually happens, without being quite so certain regarding our predictions!

This thread is an interesting read but will not affect my boat buying/selling decisions.
There's an infinite number of scenarios but my lifespan is finite.

[Gerrit Coetzee]

Originally Posted by Anders

This thread is an interesting read but will not affect my boat buying/selling decisions.
There's an infinite number of scenarios but my lifespan is finite.

And here is a touch of realism. Well done.

Money and values are monetary concerns. Value of life, and joy of the moment is what memories are made of.

I easily burn through money. Sometimes riding high and sometimes low.

Beware also of market manipulators who feed the market information full of fear to push sellers on the scene, or the reserve who stifles the market with interest hikes.

People at times are so busy making a living, they forget how to live.

Screw the prices. Chase your dream, and then start over again.

[valhalla360]

The original post is correct but can be stated as simply: When the market is up, people have money to spend on toys.

Most of the rest of the discussion comes down to old fashioned supply & demand...the only wrinkle is when you start looking at specific boat types and/or models, the market is so small you can find outliers that buck the trends...at least for a while.

[Celestialsailor]

Originally Posted by Gerrit Coetzee

People at times are so busy making a living, they forget how to live.
Screw the prices. Chase your dream, and then start over again.

There are about as many personal situations as there are grains of sand...meaning some people are affluent in terms of finances and some live paycheck to paycheck. Some born into money and most not. I say this as I see regular blue collar people selling everything to "Chase the dream". I have met many during my 3 year cruise, who sold the house and piled there family on a boat to go voyaging. Eventually they have to come back to civilization to "start over". What will it be like finding a job in their 50's? So they bought a boat a 45' boat for $150K and when the market drops will be worth less. While they were gone, their house they sold for $400K is now worth $500K. I think they'll figure out quickly they had the dream before they bought that boat.

When I read a post about selling the house and going cruising, I try to suggest finding a way of modifying that decision to some how keeping there house, renting it out and investing in a "less valuable boat" and fix it up on the way. I suggest it because that was my reality. I worked too hard to buy the house to try and do it twice.

[dcondit]

In my range (somewhere around USD $500K) it seems people either finance or pay from some type of fund (long term investment, real estate sale, etc.) With interest rates creeping up, the amount an individual can leverage is significantly decreased. For example, I bought a house at 2.5% interest. At 6% the market shrinks considerably, and my current house would not be on the list if i were shopping today.



I'm not really affected that much by the general economy. Things like auto fuel and groceries could go way up and I'd still be looking at the same boats. Certainly unemployment is binary for me - I'm either employed or unemployed so stats in that area don't matter personally. I'm secure through my nearing/early retirement. However, interest rates and financial markets make a big/immediate difference when buying something big like a house or an expensive boat.


My boat fund performance over the past eight months means the same boat is now just out of reach. Either the prices have to come down or I'll buy something else. If I'm not unique then I suspect boat process will come down a bit without a lot of lag. I'm already seeing evidence of the movement.

[sailingharry]

Originally Posted by CaptTom

These are the real indicator to watch. The reality is, boat ownership is moving from middle-class recreation to a status symbol for the very wealthy.



What does this mean for boat prices? Older boats will have no value at all. New and late-model used boats will be enormously expensive, relative to where they've been in the past. There will be more dock queens and massive, over-powered and over-priced day-use fishing boats. There will be fewer cruisers.



These things are already happening. It will only accelerate.

Interesting mix of predictions. On the one hand, boating will become a status symbol for the uber rich, which leaves out the rest of us. On the other hand, the price of older boats will plummet to near zero, which in theory would make them exceptionally affordable to the rest of us. And as the price of a boat drops, the urgency of insurance drops as well. My 24-year-old Saga 43 value is more than I can afford to replace, but if its value were to fall by half I would most likely cancel insurance.

[SV-Viento]

Originally Posted by Anders

This thread is an interesting read but will not affect my boat buying/selling decisions.
There's an infinite number of scenarios but my lifespan is finite.

THIS! Balance your own risk reward equation while considering the last three words of the above post carefully.

Fun thoughtful polite thread

[Baby tug]

I get emails five days a week from brokers and all I’ve seen is prices falling like a rock , I can think of two examples off the top my head where prices have fallen by more than 50% there’s a boat for sale on this forum that the person put $350,000 into a refit and is now trying to get 150 for it and can’t get it , the boat is absolutely Bristol like brand new , a complete refit at the manufacture , sail boats are especially cheap , I don’t see how it even could be a debate , There are so many very nice boats For under 30,000 how can you get any cheaper

[goboatingnow]

Originally Posted by Baby tug

I get emails five days a week from brokers and all I’ve seen is prices falling like a rock , I can think of two examples off the top my head where prices have fallen by more than 50% there’s a boat for sale on this forum that the person put $350,000 into a refit and is now trying to get 150 for it and can’t get it , the boat is absolutely Bristol like brand new , a complete refit at the manufacture , sail boats are especially cheap , I don’t see how it even could be a debate , There are so many very nice boats For under 30,000 how can you get any cheaper

Maybe this is a US thing , but here in the med , buyer demand is still evident , with the exception of Mobo sales which seem to be faltering. Certainly in the popular sub 200k market , the biggest issue is lack of choice , new builds have very extended lead times and many new boat buyers are therefore active in the 2nd hand market.

Note that refit sales are always a disaster , a boat in good condition is worth a price based on age , brand reputation and buyer demand , you won’t get a penny more cause you refitted it.

Perhaps the US market/ economy has scared more buyers away then the European one. I can’t say , but certainly demand remains strong ( at present ) and if anything , people are trying to get a jump on inflation and buy now.

( I do note that many US buyers are influenced by stock market movements , an issue of less importance to non US buyers )

[goboatingnow]

Around me and within my peer group , I think the biggest group of potential buyers exists. These are mainly financing boats via

(A) lump sum retirement payouts , typically 150k or less
(B) house sales , typically 2nd homes or houses left in a will
(D) business sale or windfall money

What’s not usual is any form of financing being brought to bear.

This demographic is aged >55 , some have been in boats for decades , some have taken a big leap

Their day to day living is quite modest as often their are on state and modest occupational pensions

These groups , while influenced by overall macro economic fears , are fairly immune to interest rates or stock market movements.

[CaptTom]

Originally Posted by sailingharry

Interesting mix of predictions. On the one hand, boating will become a status symbol for the uber rich, which leaves out the rest of us. On the other hand, the price of older boats will plummet to near zero, which in theory would make them exceptionally affordable to the rest of us.

Ahhh, but will "the rest of us" be able to afford slips? Marinas are being snatched up by venture capitalist-funded corporations at an alarming rate. Not only are fees going up, but rules against living aboard and DIY'ing are increasing. Of course you can cruise full-time, but even anchorages are being replaced by mooring fields. I am already seeing a dramatic change in the face of boating. I see no reason it won't continue.

Originally Posted by goboatingnow

...These groups , while influenced by overall macro economic fears , are fairly immune to interest rates or stock market movements.

That certainly has been the cruising demographic for a long time. Many people buy their cruising boat when the kids are older, their careers are stable (or over) and they've got some resources tucked away.

That's also the demographic which is being squeezed out (see above.) Marinas want shiny new boats owned by people with unlimited resources who don't really use the boats much, and pay the marina staff or partner contractors to maintain them. If those customers are available, why would they want anything to do with the more traditional boater?

[macieknan]

Originally Posted by dcondit

My boat fund performance over the past eight months means the same boat is now just out of reach. Either the prices have to come down or I'll buy something else. If I'm not unique then ...

There is something to this. Vast majority of folks looking to purchase a cruising boat have a "boat fund" in mind. Those who are willing to compromise yet unwilling to wait will buy down, supporting the secondary market.

Meanwhile folks who dont need to compromise and are willing to wait will look at elevated secondary market and order new instead or postpone, which may explain why late year models are first to see some signs of softening, which may still take coupe of years before it swings the boat sales into a buyer market.


In last recession it took two years for the used boat market to bottom. See https://www.statista.com/statistics/...2000-and-2009/

[NPCampbell]

Originally Posted by goboatingnow

Around me and within my peer group , I think the biggest group of potential buyers exists. These are mainly financing boats via

(A) lump sum retirement payouts , typically 150k or less
(B) house sales , typically 2nd homes or houses left in a will
(D) business sale or windfall money

What’s not usual is any form of financing being brought to bear.

This demographic is aged >55 , some have been in boats for decades , some have taken a big leap

Their day to day living is quite modest as often their are on state and modest occupational pensions

These groups , while influenced by overall macro economic fears , are fairly immune to interest rates or stock market movements.

I'll be converting tax sheltered retirement funds to be purchasing a boat. Depending on the interest rates at the time I'll either A) finance the boat long term or B) just long enough to straddle 2-3 tax years to reduce my marginal tax rate.

[goboatingnow]

Originally Posted by NPCampbell

I'll be converting tax sheltered retirement funds to be purchasing a boat. Depending on the interest rates at the time I'll either A) finance the boat long term or B) just long enough to straddle 2-3 tax years to reduce my marginal tax rate.

What I was pointing out is the demographics I mentioned are not engaging in “ finance “. Finance makes very little sense for people not in day to day employment who have across to cash. Of course in many jurisdictions marginal income taxes cannot be offset against private borrowings so little be done to mitigate that situation.

I think the finance orientated market will be hit by recessionary fears and inevitable interest rate hikes. The other markets , ie cash buyers will dominate and continue to generate buyers interest and help shore up pricing.

Large scale price movements are not a good idea as they usually result in a dearth of choice as sellers decide to hold on.

I agree one of the concerning factors is definitely marina costs. But this is driven by demand and will increase only if demand continues. Also new marinas are getting built and secondary marinas are seen as competitive. I could move and save30% but my wife likes where we are.

As for diy , lots of issues are driving that. Insurance , environment restrictions etc. this means that marinas want professional doing the work. Equally marinas don’t want the never ending DIY yacht in the corner of the yard. The DIY boater is a dying breed. ( the hull for fit out market is all but gone)

I think boating will grow through the next few years. The great unknown is whether Covid purchases are long or short term decisions. I tend not to subscribe to the view that there will be a glut of boats returning to the market. Some yes , but most seem committed to several years of ownership and in fact around me many existing boaters are trading up.

In fact the remote working ability these days has provided many sailing couples the ability to extend their sailing dreams whilst restocking their cruising kitty. I know one couple who were resigned to sell up and return to the rat race where delighted now to work remotely from the boat. Yet another sale of a boat that isn’t going to happen.

[glenvk]

[QUOTE=Celestialsailor;3660234]I'm posting on a thought provoking topic with the recent increase in boat sales since Covid hit. But with most concerns of the economy, it's not all that simple. In the chart below you can see how the S&P is closely tied to boat sales...

In 2010 at 50 years old, and very little cruising experience I was blessed with the great fortune of being able to buy a yacht in the Caribean and spend a year learning the ropes whilst continuing to work, fly in fly out. Then we, my wife and our 2 young kids went through the Panama Canal and sailed to Australia via the Pacific Islands over 12 months.

After that it took me a long time to get back in to a good job. But, I had dreamed of sailing across the Pacific since I was 15. That trip was and is and always will be one of the most memorable times of my life. Maybe the most memorable. I am so greatfull. I can only say, if you have the chance now, don't put it off waiting for better times. The best time is now, if you can. In the future you may regret not doing it when you could have done it. You will never regret doing it.

Got me getting all emotional now. My warmest regards to all.