Boat prices after Covid 19

[Lake-Effect]

Originally Posted by hpeer

Lake Effect,

Late comer to this discussion and not looking to buy as we are happy with our boats. That said, I’m thinking that in some months you may see deep discounts on boats. Why?

I imagine some guy who is part way into a charter boat purchase. He has a mortgage/loan he expected to pay off via the chartering income. But the situation is now different. He has taken some personal income hit from the virus, there is no charter income for the foreseeable future, he has dockage and maintenance and insurance fees. So there will be a strong incentive to dump the boat and stop the bleeding.

Is this scenario common enough to drive the market down?

It's certainly looking ugly for chartering right now. That will hinge on travel restrictions.

We have done one BVI charter (last year... heavenly ), but we have never been in a tax bracket that could consider ownership of a charter boat. I imagine the answer there is how far along in the program the owner is. If they are within the last couple of years of the program, they could likely just pay off the balance of the loan, or refinance, and take possession.

[Navicula]

back to the original post......when will "after covid " be???

[barnakiel]

Originally Posted by Navicula

back to the original post......when will "after covid " be???

When the governments decide they have deployed a sufficient amount of citizen monitoring technology under the pretentions of monitoring covid active shooters.


Version beta deployed in Australia now. Europe to deploy a 'digital health passport' that will monitor your location and contacts.


They say it will all be fueled by Google, Facebook and something called Cambridge Analytica. I looked the last name and it says it is an offshot of Israeli intelligence company.


Sounds like pretty good conspiracy theory, something I used to ridiculize yesterday.



Clockwork Orange 2020?



b.

[barnakiel]

Alas, back to THE ORIGINAL QUESTION ;-)


I have just read European Tourism Bureau expects drop in tourism between 35 and 80% of 2019 levels. Depending on which area is considered. So I know the Med is the 80% zone, NO?



Some countries not opening till July at least.


This implies many new and some old and heavily leveraged charter companies in the Med will go bust pretty soon.


Expect a good number of flimsy plastick boats size 40-50 to flood the second hand market towards the end of this summer.


Some will be picked up by competing companies, others will burn to the waterline (an insurance money is always better than no money).


Some will be available for grabs, as long as this situation lasts.


I expect even more AUS and NZ buyers to be booking flights to the Med towards the end of the summer.


Good for me as they make an excellent company when they visit my humble island. ;-)



Cheers,
b.

[ixnax]

Originally Posted by Lake-Effect

My current guess is that different boat market sectors will be hit differently. The market that most here seem to be interested in - the bigger, late-model offshore-capable monos and cats - I believe that it won't sag much, because most who own such boats are sufficiently well-off that they won't be forced to sell at fire-sale prices to keep a roof over their heads. Might even be a surge in this market as people in that bracket decide to get out of the rat-race and just play.

The biggest threat in this high-end market is a multi-year restriction on international cruising.

I think you're right. The percentage of Cruising Yachts that are higher end is not high. That market will be vastly less affected than charter investment and lower end yachts. The carnage there might be awful.

[OldSailors]

I've been looking on Yachtworld, and several other places, for several months. I also have heard from several brokers about boat sales on the Gulf and Atlantic coasts of the US. I acknowledge that my information constitutes nothing more than anecdotal remarks and personal impressions, but here is my impression.


If there will be a drop in yacht prices, it has NOT happened yet. If anyone expects marine sales to drop, that hasn't happened yet, either! What IS happening is occasional sellers, anxious to sell their boat, have dramatically reduced the listing prices (mostly for boats that appear to have been priced at the top of - or well above - their expected sale range). The majority of those "reduced price" boats are snapped up by excited buyers within days. In addition to the limited number of "price slashed" boats, brokers do appear to be busy handling inquiries about existing inventory and closing sales on a larger than average number of boat sales.


The OP may be right. The market may sink after the immediate boom is over, if the long term impact of this economic collapse dries up buyers and enough sellers get hurt enough to be desperate for cash. If that day should arrive, it is not today, is will not be this month or next, and probably won't be seen this summer.

[edthec]

Originally Posted by Paul Howard

Debt held by the public is expected (Congressional Budget Office Outlook) to rise from 78% of GDP ($16 trillion) at the end of 2018 to 96% GDP ($29 trillion) by 2028. That would be the highest level since the end of World War II.

The United States surpassed Italy on Saturday as the country with the most coronavirus deaths in the world, according to data from Johns Hopkins University.

So you think the U.S. is not in a debt and pandemic crisis?

Please do not take this statement as preliminary to aa political discussion. I think the word "known" is missing between ".....most" and "coronavirus....." in your statement. The most likely record holder for deaths from the virus is China.

[larrymac]

WOW!! What a lot it gloom and doom! Anyone seen a sunset lately? Spent some time with a favored grandchild? If we spend our time predicting the end of the world as we know it, we’ll stand a real chance of missing the roses, the love of families, and the promise that God is in control!
It HAS been traumatic, and the recovery, supported by those who are capable of looking at a half filled glass as half Full, will not only reap the ultimate benefits, but enjoy the positive aspects of their lives!
Let’s think on the optimistic side - and realize that if we are wrong, we will STILL have extracted some positivity from the journey.

Guys - I’m 74, have not one, but THREE life threatening diseases, and just found out my whole blood count is way low. HOWEVER, I arise with the sun, enjoy the companionship of my bride, try to be of service to those in my community and church, and am planning a cross country drive to officiate at the memorial for my just deceased mother in law - at which time I will see many family members I have not seen for years! Sure, we’ll be careful, and wear masks, but we need to enjoy the time we have left!
By the way, I hope that when I die, it will be by falling off the sugar scoop (either side is fine!) while relieving myself into the Gulf of Mexico!

Get a grip! Life’s too short to bemoan every little (or big) thing that comes along! Gather the lemons and make lemonade!
Just two cents from an old man!4

[Happ]

Originally Posted by chakil

Hi fellow sailors,

I hope you are all fine and ready for a great season which seems cloudy right now.

I wish to hear your valued predictions about this situation on boat prices..

I have a few thoughts which I would like to share with you and wonder if you may agree ;

The boat prices will crash at least %40 on monohulls and %30 on multihulls, anyway there was a bubble on multihulls after the hurricanes , you may say it will be back to real value

Most of the charter companies will downsize or bankrupt ..

Sailing will not be so attractive for a period of time as the quarantine rules will be on practice until there is a vaccine

Charter companies or individuals who made some downpayment for new boats will burn the deposit and never deliver their boats, these boats will be overstock in the companies and will be on sale with big discount to create cashflow

Second hand market will try to keep the value until the flow from the big charter companies

At least 2 of the big 5 will close or change hands..

EurUsd will crash to 1 or 0,75 by the end of the year , where the real discount will occur

What I am seeing is prices are dropping already. The ads on Yachtworld are showing more boats with “just reduced” on them. I’ve seen a Hallberg Rassy offered at below last sale and it is in beautiful condition. A Beneteau 373 was just reduced 5% more. A new boat dealer just put a 2 year old demo up for sale asking 75% of new.

If enough people need to sell it will drive prices down. In addition there will be less buyer’s due to the virus / less places to go. I sold my last race boat in January 2020. I was in the market for a cruising boat. Last week a friend called and asked me how the search was going. My response was I’m still watching but I’m in no hurry as there is nowhere to go. The islands are shut down.

I have some urgency due to my age but I certainly don’t want to buy a boat just so I can sit at a dock. I hope this virus will quickly be a thing of the past but I’m not real confident in that happening.

[Dave9111]

My perspective is from the Great Lakes. I have a sailboat at what is considered a "high end" marina on Lake Erie. The marina has been suffering from high water levels and a general loss of customers over the years. Now this pandemic has hit. I just launched last week and I noticed a number of nice boats up for sale that used to be docked near me. The number of boats for sale is WAY up for this time of year. Not what I expected.

I run a small business and via online small business forums have found that many small businesses in my area think they can last 1-2 months more at the existing sales rate. That is not long. Fortunately I should be good for at least a year, maybe longer, although my business is off by 90%. The number of virus infections is still rising in my area and they have decided to reopen everything. Probably a mistake. This will not end well.



In order to keep a 40-60 ft boat you need a serious income. Many of those boat owners are small business owners who are in trouble. If it comes down to selling the boat or keeping the business afloat for 4 more months, you know what they will do. The boat will be sold. In 6 months you will see discounts of 25% or more on some existing boats for sale and they won't sell at that price. The market will continue to decline for some time. I don't think anyone knows where the bottom is yet.



Another perspective:

A lot of boat owners use their boats as a social platform. They are club members and enjoy the social life of the yacht club. Most yacht clubs can't do 6 ft social distancing in any circumstance. Why pay the dues and the boat slip fees when they can't do what they want. The boat goes up for sale and they cancel their membership and do something else. Yacht Clubs go broke, boats go up for sale since their docks are gone, etc, etc.



This pandemic is like a snowball going downhill. Its still picking up speed and getting bigger and there is no place to hide for most of us.



The name of the game is survival. My business survived 2008-2010, but just barely. This is a lot worse.

[Lake-Effect]

Originally Posted by Happ

What I am seeing is prices are dropping already. The ads on Yachtworld are showing more boats with “just reduced” on them. I’ve seen a Hallberg Rassy offered at below last sale and it is in beautiful condition. A Beneteau 373 was just reduced 5% more. A new boat dealer just put a 2 year old demo up for sale asking 75% of new.

Partly because of the anticipation of dropping prices as expressed in threads like this, I suspect that there's a mini sales boom at the moment, and sellers and their brokers are all claiming "just reduced" and "must sell, new price" to tempt the impatient. I'll bet too that there's a lot of mutton being dressed up as lamb right now, with tempting prices, in the hopes that these turkeys can be unloaded ASAP.

If there's going to be a real drop in boat prices, it will develop over the summer, and reach its peak (depth?) in the fall.

I have some urgency due to my age but I certainly don’t want to buy a boat just so I can sit at a dock. I hope this virus will quickly be a thing of the past but I’m not real confident in that happening.

If we manage this carefully, COVID-19 and the economic fallout from combatting it will gradually fade back to just another issue in about a couple of years. In the meantime, limited sailing is permitted now in many places, and I don't see that it will be shut down again even if there's a serious second wave, as long as boaters continue to behave responsibly with social distancing etc.

So, speaking personally, I'd rather have a boat now than not, even if it's just something to futz with, and take the occasional daysail in, or even just hang out at the dock in. Maybe some could pass the time with a cheaper smaller boat, while they wait for their dream cruiser to go on sale?

We have just been permitted to start prep on our boats last week, and launch will be possible in a month or less, so I'm currently a happy camper.

[timb7734]

“Boat prices dropping” is a Covid fueled hysterical fantasy of someone who is not going to buy a boat anyway. There are always dropping prices and must sells. The economy will rebound royally as soon as these power grabbing governors are forced to end their unconstitutional government by decree and the economy reopens. I just left Florida which is almost entirely open, and went to Michigan which is full of the hand wringing people terrorized by the mismanagement in Michigan, Illinois, NY, NJ, and California, and still on lockdown.

[arsenelupiga]

my investment model is flashing - sinking into global depression - there will be sellers of all sorts and very few buyers for boats and houses. chinese have problems of their own so wont be saving hand this time.

only way to make something out of it is timing. right time to sell A, right time to buy B.

[letsgetsailing3]

I read today that the stock market is 3% higher today than it was 12 months ago.


So the rumors of pristine boats selling at a significant discount may be a bit premature.

[Mexdon]

barnakiel "I expect even more AUS and NZ buyers to be booking flights to the Med towards the end of the summer"

I doubt it...neither citizen can leave their country and they may be allowed in time to travel between OZ and Kiwiland...to Europe is out of the question for quite some time...maybe years.