Buying on hold - better market ahead?

[goboatingnow]

Boomers are the last generation with reliable defined benefit pensions , boating will not be the same when they leave the marketplace

[EngineerRetired]

Originally Posted by goboatingnow

We’re out of boating at 65. I better run down the pontoon and tell 4 boats ( 68 yo , 70yr 72yo, 74yo ) that they shouldn’t step on their boat again

I expect to be good to 80.

Kids are clueless, I'm 68 and looking at buying. I plan on at least another 20 active years. All the men in my family have been.


This attitude that people over 65 are at deaths door or physically unable to do things is just plain silly.

[Mike OReilly]

I think you need to combine Val's correctly-cited demographic reality, along with GBN's observation about wealth and financial security diminishing with the generations beyond the Boomers. Taken together they lead to a declining number of cruisers, and therefore an increasing glut of boats.

But this is a bigger trend which is overlapping the more current Covid trend. Notwithstanding Thin's possible scenario, I really doubt enough people will truly change their ways once the world returns to some semblance of normal.

[goboatingnow]

I think we are most likely past peak boat ownership. Certainly around me the increase in charter fleets suggests an attraction to immediate spending rather then asset acquisition.

When I was in my 20s an aspiration to own a home was mediocre. No one saw it as problematic. These days kids are either resigned to ignoring it or obsessed with saving everything towards it.

Hence today’s young professional often have significant disposable income but little long term capital. Hence I believe the rise of the charter market.

Given the stratospheric new boat pricing even for boats of modest size and the difficulty in securing marine loans, I see millennials struggling with boat purchases, couple this to longer working hours , lack of job security , poor pensions and low investment returns generally I don’t see this market attracting a younger demographic any day soon.

Remember 30 year olds have seen two financial depressions in their short lifetimes and their feeling of financial security is low. They live in the minute not aiming at capital acquisition

I know loads of young professionals at 35 on big money who don’t even own a car. !!!!

[alaskanviking]

There are major economic issues, housing issues, big changes to the labor market right now, some of these issues have been going on a while, but COVID and the shutdown has only exacerbated it. Despite what MSNBC and FOX news says, these are all multi issue, complicated and intertwined issues, that don’t have many easy solutions. I have not seen any political will to address these issues, and the boating season is almost over already. COVID and the shutdown trapped everyone inside which I would expect that to continue this winter Since the numbers are spiking again and everyone will start to congregates indoors in the next few months as it gets colder. that means more work from home and you tube sailing channels.

I suspect it’s hard to resist captain jack sparrow’s theory of boat ownership and dreams of tropically areas when you’re mostly trapped inside your house, which is a good part of the current boat market boom. There will be older boats priced out due to insurance and I suspect you will start to see some buyer’s remorse as people start getting the full realization of the true cost of ownership. Realistically boat service companies are so busy there is several months to get an electrician or plumber out for simple repairs, and people won’t be able to sell as easy without a loss if they can’t get the boat worked on. For people with loans it would be too soon to sell. So I would expect the boat market to cool down slightly but it will probably still be a seller’s market this winter.

For the current sellers’ market. I suspect that there is a lot more “spending just to spend”, than there are calculated purchases. Simply people were starting to see a little freedom and normalcy again after being trapped in their house watching youtube cruising videos and dreaming of perfect boating trips. That means there are a lot of non-boaters entering the community and waterways for the first time. The labor shortage and COVID has reduced boating services, and it’s difficult to get into the que to even have your boat looked at right now. My neighbors have a really nice newer45ft, they are very new to boating, and didn’t realize the amount of maintenance and work that goes into even the newest boats. They are having projects/maintenance backlogs because they don’t know how to fix this stuff in their new world. he makes good money and is more than willing to throw money at the problem but can’t get anyone out to their boat, months at the earliest. I’m hearing a similar theme from others.

The labor issue is complex set of issues, not a simple black and white issue the news would have you believe. So expect getting work done on your boat to continue to be a problem. I haven’t seen any signs of real solutions being made here, and with the logistics issues nationally and globally on top of it, my prediction is this will continue for another year or more. How things pan out this winter will show us better the direction things are going. New boaters have little clue about the costs and amount of work required to maintain the boat. Many are like my neighbors and think a newer boat is like a newer car, little to no maintenance. That reality hasn’t really set in yet for these new boaters. You tube channels and other internet content about this do not really address this, and it’s not necessarily easy to communicate. When you see people doing more of their own work/maintenance that will be the signs to look for that the market is changing. I would expect a lot more online content on boat repair and maintenance, and descriptions of the real cost of boat ownership as well as a corresponding increase in the demand and logistics issues for boat parts/supplies.
Spring 2022 should return to a robust sellers’ market especially if they start to get a better handle on COVID. People are chomping at the bit to go do stuff so spring and summer should be decently hot. 2022 is a voting year. If they start to address the economic, housing, logistics/manufacturing, and labor issues ie cost of living goes down, better paying jobs ect we should expect to see a fairly strong market into the fall. However if any of those issues start coming to a head where it affects paychecks than you will see the boat market start to go the other way. By winter 2022 there should be a full realization of the cost of boat ownership and id be surprised if the boat market wasn’t flooded with boats, however I don’t see anyone wanting to take major losses so prices probably won’t drop till winter 2023. This will be more drastic if they can’t get the logistics and manufacturing issues figured out. Boat parts and equipment are expensive already comparatively to other industries, so if stock on hand doesn’t increase and prices lower, this will really impact the cost of boat ownership and boat market.

For 2023 I would expect all of this to continue, elections in 2022 will be the first sign of how things will go, and likely our best predictor. A split congress and house that continues to not get anything done will have little impact on the economic, housing and labor issues that directly or indirectly affect the boating community and market, which would mean little change and the expectation would be for the cost of boat ownership to go up. I would believe we should be in a mostly post covid environment then but there will be a lot of desperate people and organizations running in or close to the red. Don’t be surprised if taxes, fees, and fines all go up.

The COVID shutdown has shown people they can work remotely and I can only see that continuing. Combined with a high cost of housing it will only increase the alternative housing lifestyles tiny house/boat/rv/van life/homesteading ect. It’s the jobs that pay more that make sense to remote work so that should mean the high end and newer boat market should maintain decent levels. If the cost of boat ownership continues to increase and slip space gets more competitive, the I expect it will affect the older, lower cost boats the most.

[goboatingnow]

A fine analysis

I’m not in agreement with your last paragraph.

While certain workers may desire to work from a remote location , the indications are that their employers are much more hesitant.

Then even 3/2 working demands a solid internet connection typical of a fixed abode.

There is no indication that residential boating is having any sort of materially significant boom in interest , if anything the stock of suitable conversions is drying up , high end marinas are as expensive as renting and the comfort expectations of the modern generation are hard to reconcile with living on a boat.

Boats need financing and new boats need lots of financing , that’s needs collateral and long term financial standing , neither of which , high earning young professionals have.

Residential boat living is becoming increasingly difficult to access ,increased focus on the environment , costs , anchoring restrictions , urban planning issues mean that activities then flew under the radar in the past are now more difficult to access. The rose tinted romance of sitting on the water in dappled summer light gets replaced by freezing condensation , poor heating and dodgy Wi-Fi.

I do agree that more cost constrained existing owners will feel the ownership pinch first. It really depends on its cash flow demands. The days of low cost boat ownership are coming to an end.

( however for those on guaranteed pensions , with freedom of relocation , plenty of cheap locations are still available )

As You said COVID driven boat purchases will play out to around 2023. However intervening inflation , global financial stability etc will play a greater part in deciding to keep or sell ones boat in my opinion.

I also think the difference between a buyers market and a sellers market is largely illusory. Often if prices get “ soft “ those sellers that can withdraw from the market, do so, resulting in a glut of undesirable boats and few decent ones. A “buyers market” isn’t necessarily in the benefit of a buyer

[thinwater]

Originally Posted by goboatingnow

We’re out of boating at 65. I better run down the pontoon and tell 4 boats ( 68 yo , 70yr 72yo, 74yo ) that they shouldn’t step on their boat again

I expect to be good to 80.

I very much hope so! Keep it up until it isn't fun anymore.



Remember, those numbers were for ALL boaters. The average age of sailors is greater... which is good and bad (too few new sailors).

[goboatingnow]

Originally Posted by thinwater

I very much hope so! Keep it up until it isn't fun anymore.



Remember, those numbers were for ALL boaters. The average age of sailors is greater... which is good and bad (too few new sailors).

I don’t think young men ever where the mainstay of cruising

Remember mass boat ownership is largely a post ww2 development and arguably not till the 70s. In reality the Boomers /early Gen x popularised the activity

Yachting was historically the preserve of the landed or very wealthy classes. Hence the early proliferation of “quality “ ( read expensive ) brands of yachts. Most of which arnt made anymore.

Boomers are the last generation to have significant house equity , defined pensions , yet also benefitted from ( in most places ) good government supplied healthcare etc. This has ensured they are typically living longer then their patents ( the same can’t be readily said for their children )

This means that young people are not in this market ( they never were , it was just younger Boomers ) of course they never were.

Gen x,y,z millennials will get older hopefully they will accumulate capital , I’ve no doubt they will buy boats. Many will have grown up on the Boomer parents boats. An experience few Boomers had. The sea will call them back too.

[David B]

Originally Posted by laird

Can you let me know when the prices plummet ? I'm not a wealthy wannabe boat owner

I'd just like a nice 37 ft mono in a couple of years

Careful - the multihull people might hear, and come trying to brainwash you

[Jolly Roger]

If EngineerRetired is not going to buy a boat now, (assuming he can afford one now), in order to speculate that he can perhaps buy the same type of boat for less in two years’ time, he will most likely have the same reticent then. “l think I’ll wait a bit longer until the market drops a bit more.”
We’ve all seen them, strolling the marinas, wishing they could be like us, but they never will be…

[valhalla360]

Originally Posted by goboatingnow

Boomers are the last generation with reliable defined benefit pensions , boating will not be the same when they leave the marketplace

Might be different in Europe but in the USA, pensions peaked back around 1980 at 38% of jobs...and most of those folks never actually cashed in because they changed jobs prior to vesting and even among those who did collect, it was a small amount because they only had 10-15yrs with the company.

The guy who cashed in a maxed out pension after 40yrs at one company was very much the oddball.

Of course, I would argue the modern retirement system is more conducive to cruising. Cruising has always been a rich man's game (at least in relative terms). If you have a $1500/m pension and $1500/m social security...that's $3k/m...kind of hard to buy a $250-500k boat with $3k/m. But if you've saved up a big nest egg, it's surprisingly easy to have a goal of $1mil and blow by it to hit $1.3mil plus you still have SS. And if you hit the $1.3m at age 50, you have the option to retire early. With an extra $300k, suddenly, buying a big boat is much more feasible.

As far as aging out...No the cruising police don't show up on your 65th birthday and take away your boat keys but if you plot out the age people sell the last boat, I bet you find a nice bell curve and the center of that curve will be within a couple years of 65. Yeah, you will see the tails go out in both directions but few make it very far beyond.

Keep in mind, we are talking about the market on this thread. The market is much more interested in the averages as opposed to the exceptions.

[valhalla360]

Originally Posted by alaskanviking

The COVID shutdown has shown people they can work remotely and I can only see that continuing. Combined with a high cost of housing it will only increase the alternative housing lifestyles tiny house/boat/rv/van life/homesteading ect. It’s the jobs that pay more that make sense to remote work so that should mean the high end and newer boat market should maintain decent levels. If the cost of boat ownership continues to increase and slip space gets more competitive, the I expect it will affect the older, lower cost boats the most.

I do believe remote work is going to be far more common going forward...but other than possibly extended vacations (where they work while on vacation), I don't see a lot of people moving into tiny spaces.

Lots of companies have broken thru the management resistance and now that workers have been given the option, taking it away will be more challenging. Plus there are big financial advantages in office space savings. Too many things make it completely viable for office workers to do so remotely at least part of the time.

But the lifestyle of living in a tiny space goes far beyond simply where do you work. There are a lot of non-work challenges that many won't be interested in pursuing.

[valhalla360]

Originally Posted by goboatingnow

I don’t think young men ever where the mainstay of cruising

That makes Boomers aging out a bigger issue to the market. If 70% of boats are owned by folks in their 60's and if 50% will age out in the next 5 years, that will put huge pressure on boat prices as they unload them in the market.

[MultiCountryDon]

The cat market will be a seller's market for years to come because:
1) The monohull drivers will be forced to go multi by the admiral.
2) The builders are 1-3 years out on deliveries.
3) It only takes one furious hurricane to reduce the inventory significantly, and a high % of cats are based where hurricanes visit frequently.

The used monohull market may go to balance in a year or 2 , but not the cat market.

Don

[Ms J-37]

To the person looking for a nice 37ft monohaul, my husband and bought a spectacular J37 in 2015. We had to sell in 2017 due to his serious illness. He has since passed. But he would agree it was THE best purchase we EVER made. Maybe our buyer is ready to sell.
If you find THE boat you've been dreaming of, my advice is, "Buy it." You can complain forever that you "paid too much," but you'll have your boat and you'll be living your dream!
In 2006 we bought our Florida condo at the height of the market. We rented it out until 2018, when we moved in. Maybe we "overpaid" by $30,000, but it was the right residence for us, and I love living there. I wouldn't trade it for any other one.