"Everyone is buying boats'"during the pandemic, and it's causing a short supply

[rslifkin]

There's been plenty of increase in boating at the cheap end of the spectrum as well. That 20 year old pontoon boat sitting in Bob's back yard has now sold to someone for a few grand and is being used again.

[tomfl]

I am reminded of another thread about boat prices dropping. So far I must have a dozen posts about how I have been looking for some flavor of an fboat since the first of the year and so far no real deals I can find.

Also have to point out there seems to be a real increase of what use to be called white flight where peeps want to move away from peaceful demonstrations that seem to turn into riots, looting, and arson and into a more rural (read beach house) setting.

[Lake-Effect]

Originally Posted by tomfl

Also have to point out there seems to be a real increase of what use to be called white flight where peeps want to move away from peaceful demonstrations that seem to turn into riots, looting, and arson and into a more rural (read beach house) setting.

It's happening with or without rioting. ThumbsUp and smj have nailed it - the pandemic is a wake-up for many to not wait to reward themselves, and that with the sudden explosion in work-from-home, one can trade that expensive big-city home for a secluded retreat (and some spending money) without taking a career hit.

[DeValency]

Sorry to offer a little gloomy pout of view here.

Just note that in most market reports “boats” are anything from jet skies and up. Yes, the numbers on the low end motor boats are temporarily increased (based on actual deliveries, financing etc., NOT on bookings) as many buyers had to stay home over the recent months.

As for larger, mainly sailing, cruising boats, this isn’t the situation. The overall industry situation is quite alarming with Beneteau closing of their US production, Bavaria going out of business in Europe that just continues the industry downturn over the recent years. This probably created a supply shortage in some segments that will soon be flooded with the charter companies standing inventory and even more in the fall and next year.

As we all know, purchasing a 30’+ sailboat, can’t be an impulsive seasonal decision at most cases. Furthermore, the world is getting to one of the most serious economic recessions. At situations like that, even based on expectations, logical people tend to minimize commitments and risks, delay decisions etc. - including those that can presently afford to pay $50-600K for a new or used boat.

That’s how the economy works and unfortunately, the boating market can’t behave differently.

[Tetepare]

Originally Posted by Afrakes

Which means in a couple of years there will be plenty of deferred maintenance boats on the market which will drive prices down.

Which means we have to wait two or three friggin years now, and will have lots of refit to do. Dammit!

[Island Time O25]

People who are buying boats in the middle of pandemic are similar to $12/hour cleaners who were buying $300-500K houses just before the 2007-2008 real estate meltdown. The more things change...

[tomfl]

Originally Posted by Island Time O25

People who are buying boats in the middle of pandemic are similar to $12/hour cleaners who were buying $300-500K houses just before the 2007-2008 real estate meltdown. The more things change...

I am still waiting for a guaranteed CRA loan to buy a boat. If you don't know what CRA is you really should not be posting what you did.

[zamber]

Originally Posted by DeValency

Sorry to offer a little gloomy pout of view here.

I agree with you. There were bankruptcies that you did not even mention. If things were so good, there would not be one bankruptcy after the other. I read also about how people are supposedly buying boats instead of a vacation. So instead of spending $3000 on vacation they spend $30,000 on a boat?

[wolfgal]

i agree with quite a few here but would like to throw in -
fear and trust, the importance of clean air, the need to feel free - into the mix

fear and trust:

many (esp those who are obese, with type A blood, and/or underlying conditions.... SO MANY!!!!!) need to social distance, and this, perhaps, to stay alive.

and in a masked population, people are conscious of the fear we live in

wearing a mask is uncomfortable and confining.

on a sailboat, you are not only away from people distance-wise, but you can fill your lungs. you can TRUST the air.

Freedom: freedom from being cooped up inside, freedom from the growing social unrest (the looming red sky), freedom from the fact that so many of our real individual freedoms are on the "compromise list" these days...

some may feel safer having a bug out boat...

[valhalla360]

Originally Posted by smj

Same with resort housing, demand and pricing is way up.
What bad economy? To me this shows the income inequality problem we are having? The rich seem to get richer and poor/lower middle class have record unemployment and evictions.

Since the article is focused on the USA....What evictions? In most areas, there has been a moratorium on evictions.

Yes, some people are having financial issues but the "inequity" is usually those who plan ahead have emergency funds and backup plans, so when the poo hits the fan they recover quicker and farther. This time, we are likely to see a lot of middle and upper class bankruptcies particularly among business owners but govt programs are masking a lot of what is happening to real finances.

There was a thread a while back expecting boat prices to drop. I thought they would also but as things played out, if this went on for more than 3-4 months. But money that would have went to vacations and the like has shifted to Boats and RV's (pools are also selling like gangbusters). Keep in mind for a family of 4 a vacation can easily run $10-15k, so if you still have a job and seem secure, buying a $50-75k boat, looks a lot more promising especially if you have it in your head that there is equity in a boat (yeah, I know). My guess is most haven't thought things thru but are looking for something...anything to get out of the house.

So reassessing the situation I now expect by late next year or the following year at latest, you will see a lot of these boats getting dumped as people realize the cost to feed and house a boat is not insignificant and at the same time traditional vacation options open back up.

[smj]

Originally Posted by valhalla360

Since the article is focused on the USA....What evictions? In most areas, there has been a moratorium on evictions.



Yes, some people are having financial issues but the "inequity" is usually those who plan ahead have emergency funds and backup plans, so when the poo hits the fan they recover quicker and farther. This time, we are likely to see a lot of middle and upper class bankruptcies particularly among business owners but govt programs are masking a lot of what is happening to real finances.



There was a thread a while back expecting boat prices to drop. I thought they would also but as things played out, if this went on for more than 3-4 months. But money that would have went to vacations and the like has shifted to Boats and RV's (pools are also selling like gangbusters). Keep in mind for a family of 4 a vacation can easily run $10-15k, so if you still have a job and seem secure, buying a $50-75k boat, looks a lot more promising especially if you have it in your head that there is equity in a boat (yeah, I know). My guess is most haven't thought things thru but are looking for something...anything to get out of the house.



So reassessing the situation I now expect by late next year or the following year at latest, you will see a lot of these boats getting dumped as people realize the cost to feed and house a boat is not insignificant and at the same time traditional vacation options open back up.

Obviously if there’s a moratorium on evictions then evictions are inevitable? Whether there’s a moratorium or not on evictions people can’t afford to pay their rent, and if the rent isn’t being payed then the landlords are taking the hit.

[wolfgal]

Originally Posted by valhalla360

... but govt programs are masking a lot of what is happening to real finances.

...My guess is most haven't thought things thru but are looking for something...anything to get out of the house.

So reassessing the situation I now expect by late next year or the following year at latest, you will see a lot of these boats getting dumped as people realize the cost to feed and house a boat is not insignificant ... .

you bring up good points Valhalla. the cost to "feed and house a boat" may take quite a few spontaneous buyers by surprise.

there is something else happening though as well: people are getting out of cash as most understand what is happening to the purchasing-power of their currencies. they may be spending what they have before it is worthless.

and maybe folks are redefining their role as consumers. isn't it nuts how a "good consumer" is one that spends a max? i think many have finally woken up to the point of having savings. the problem now is that there is/will be less and less financial incentive to save. there is very, very little incentive to save where i live. neg interest rates is how the EU keeps the debt serviceable. the thing is, the harder it is for me to actually save, the harder i try, to the point of becoming a full-fledged consumer-rebel.

and what about what Powell said the other day? to me, the averaging bit means that the fed is going to let inflation (when it does finally hit) run hot for a while before attempting to rein it in, and this, so to be able to make the debt manageable. in the same vein, i wonder if the fed is opening the door to negative rates... in any case, they shifted the focus (the role of the fed) to getting people back into jobs..., something i thought the government was more inclined to do... makes me wonder the fed owns a bit too much (a few too many flailing assets) in the states...

and are you seeing inflation over there? i do, at the grocery store, it is phenomenal!!! a year ago i spent 70 euros but now spend nearly 120 euros for the same exact stuff/amounts. believe me, staying thin is so easy in europe!

anyway, yes, people are hopping into boat ownership and surely driving up mooring prices. i think many are thinking they could use the boat to get out of Dodge (and hence the seeming fascination with blue water boats), but my feeling is Dodge is being redefined (as in, getting smaller) by the virus as well...

red sky in morning... i do hope not but am watching that horizon like a hawk!





wolfie

[rslifkin]

There's also some effect from people who were already thinking of buying a boat and could afford it (even if it's a cheap/small one). Out of that group, at least some of those that haven't gotten hammered financially have taken this as the reason to just buy it now instead of waiting and deciding later.

[gonesail]

Everybody knows umbrellas cost more in the rain - Tom Waits

[DefinitelyMe]

Originally Posted by DeValency

Sorry to offer a little gloomy pout of view here.

Just note that in most market reports “boats” are anything from jet skies and up. Yes, the numbers on the low end motor boats are temporarily increased (based on actual deliveries, financing etc., NOT on bookings) as many buyers had to stay home over the recent months.

As for larger, mainly sailing, cruising boats, this isn’t the situation. The overall industry situation is quite alarming with Beneteau closing of their US production, Bavaria going out of business in Europe that just continues the industry downturn over the recent years. This probably created a supply shortage in some segments that will soon be flooded with the charter companies standing inventory and even more in the fall and next year.

As we all know, purchasing a 30’+ sailboat, can’t be an impulsive seasonal decision at most cases. Furthermore, the world is getting to one of the most serious economic recessions. At situations like that, even based on expectations, logical people tend to minimize commitments and risks, delay decisions etc. - including those that can presently afford to pay $50-600K for a new or used boat.

That’s how the economy works and unfortunately, the boating market can’t behave differently.

This is definitely the case here in Bermuda. Yacht prices have remained the same. High-end prices have perhaps increased a touch. The price of a center-console between 13 and 28 feet has doubled. Nobody is interested in fixer-uppers. If it needs an engine, or even something as basic as a steering cable people aren't interested, in part because every marine contractor on the island (myself included) is booked solid for months to come. But if you have a runabout that is turn-key you'll have no trouble selling at the moment for a hugely inflated price.