Sailboat Prices

[Cheechako]

I think the only "amazing" prices for boats are going to be: Sellers who dont have the money for moorage etc any more, or possibly new boats that have to be sold just to keep the factory open. The Independence 31 that sold a couple of weeks ago for 17500 may have been an indication of the first scenario. North River Aluminum powerboats just had one huge auction and another is soon, that may be an example of the latter scenario. Healthy companies will continue to want to sell at a profit and will just wait it out I would imagine.

[Jolly Roger]

Jezz! You’ve got a lot more sorting out to do without worrying about boat prices! If you have $180,000 to spend and are that concerned about boat prices and interest rate fluctuations, my guess it you are just dreaming - and will probably remain that way.
How can anyone help you, with so many variables? It sounds like you don’t know whether you’re drilled, bored or countersunk? First decide whether to buy a boat or not. Then decide when – and if it’s not ‘till next year, forget it until then. Then decide what sort of boat – why are you going on about power boats, if you want a sailboat? Then start looking for the particular type, and get on with it.
I can’t help thinking about the people chatting to me as I sat in the cockpit of my live-aboard in Gibraltar years ago. They said they would just love to do what we were doing, but they had two young daughters in school. Just then my two came trotting down the marina in their school uniforms, and jumped aboard. I just smiled and said, “yes I understand perfectly.”

[bencoder]

At least here in the UK, looking on ebay, which should give you a good idea of the "market price", they are just not selling - none of them are even meeting the reserve price - small sailing boats(25-30ft) are reaching no more than about £1500 and not selling because of the reserve. I even saw one advert that said "small reserve set because I'd rather see her rot than give her away" which astounded me.

So it seems that until things get more desperate and mooring fees really cannot be paid, people aren't willing to let go of their boats for the market price. Hopefully(from a buying perspective, sorry if you're on the other side) this will change and they will start selling at the bargain prices, as I'll be looking to buy in 6 months to a year.

[deluxe68]

Jolly

I never said I was looking for a powerboat, please read my post again. Banks are tightening credit on ALL boat loans even though power boats may consist of a majority of bank boat loan repos. This is resulting in ALL buyers not paying cash for a boat having a harder time getting financing. The end result is a buyers market. We ARE buying a boat this year.

[TaoJones]

Originally Posted by bencoder

At least here in the UK, looking on ebay, which should give you a good idea of the "market price", they are just not selling - none of them are even meeting the reserve price - small sailing boats(25-30ft) are reaching no more than about £1500 and not selling because of the reserve. I even saw one advert that said "small reserve set because I'd rather see her rot than give her away" which astounded me.

I would argue that what is happening (or not) on eBay proves nothing, really, except that those who are supposedly "in the market" to buy a vessel are not willing to meet even the modest reserve prices set by some sellers. It's probably more a reflection of the state of mind of potential buyers, or the state of their finances, or perhaps both.

The so-called "market price" of anything is exactly what a buyer, of his own free will, and a seller, of his own free will, agreee to consummate a transaction at on a particular day. Nothing more nor less. Until such a meeting of the minds occurs, there is no sale and therefore no "market price."

It is a moving target that changes moment-by-moment and merely reflects the perceptions of individual buyers and sellers. An equally important aspect of establishing price is the negotiating ability of the interested parties. A smart buyer can convince a motivated seller to sell for less, and a smart seller can convince a motivated buyer to pay more.

'Twas ever thus.

TaoJones

[bencoder]

all true, but I'd argue if there are considerably less buyers willing to pay the sellers 'modest' reserve prices than there are sellers then the prices will go down. We'll see . (of course prices might also go down as these boats are left to decay and are worth less after not being bought for so long)

[TaoJones]

Originally Posted by bencoder

all true, but I'd argue if there are considerably less buyers willing to pay the sellers 'modest' reserve prices than there are sellers then the prices will go down. We'll see . (of course prices might also go down as these boats are left to decay and are worth less after not being bought for so long)

I believe you're making an unfounded assumption, bencoder, which is that those with listings have to sell. That is not only not always true, I submit that it's not even often true. Not everything you see listed for sale on eBay, or anywhere else, is actually "for sale."

The listing party may be merely testing the waters to see where things lie at some particular time. That's why reserve prices are set. By the same token, not everyone making a bid is actually a buyer. The many persons who submit ridiculous bids on any item on eBay are only playing a game - "Hey, look what I bought! A two-year-old BMW with only 4,000 miles on it for $99.18! Wheeeeeeee . . . this is fun!"

Setting a realistic reserve eliminates this kind of nonsense.

TaoJones

[Randy]

I'll state the obvious or at least what I've seen. On a case by case basis there are some great deals out there where sellers have found their own financial situation particularly dire.
Anytime there is an economic slowdown if you've got cash you'll find yourself in a real sweet position.

[watson1990]

TaoJones,
Much of what you say is true but at this particular time we are seeing people who already HAVE to sell their P.W.C. or their power boat or their campers in an attempt to pay their mortgage. This is only going to get worse.
Your point that much of what you see on ebay is just is simly people testing the waters. They are not testing the waters anymore ,or at least nbnot as much as in the past. It will only get worse as more people get laid off and home owners will sell anything they have to keep their homes. Sometime in the near future,perhaps 6 months or perhaps as long as 12-15 months it is gonna hit the fan ...Then "MY golden Rule" becomes law ...The man with the gold,Rules. If you want to sell and I have money and you don't ,,,then you are gonna have to sell by my terms if you want me to part with my Discressionary income ..If you are unwilling to meet my terms then get out of line 'cause there are 100 people right behind you who are also about to lose their homes ... This is something we have never seen before and I fear that it just might become even biggger than the "Great Depression "

As far as: The effect of this lowering of the offered price is to increase the yield on the bonds (the "interest" the bond-holder will earn over the life of the bond, or until he/she sells the bond on the open market.) The interest rate as stated on the bond does not change, but if the price a willing buyer pays for the bond is discounted, he/she will be getting that interest rate for a smaller outlay of capital - thus, his/her yield will increase as a percentage of the price paid for the bond." Is basically what I said: the government had to offer inticements to buyers to get them to buy. That costs money ..long term or short term ..even if it is simply a lessening of the cash flow into the government coffers with the lower cash derived by the sale of the bonds: the government is giving more than it usually gets for the same product and the end result is inflation.. Someone is going to have to pay that "extra tab" and you know it ain't gonna be Geithner...He doesn't even pay his own income taxes ..It will be you and me or our children

[Jolly Roger]

I think we are loosing track of the original post here chaps.
OK, it’s interesting to hear what experts think will happen in the next year or so, and it's certainly beyond me. But when it comes down to it, it’s nothing more than speculation and guesswork. People who ask these sort of questions about boats are just seeking confirmation that when they are ready to buy they might expect a better deal.
Nobody seriously says, “I have xxxxxx amount of cash to buy a boat. So I’m going to wait until next year, when I believe I will be able to buy a better boat.” If they must wait until next year, it’s because of some other reason. It’s unlikely to be because of today’s prices.
Most people who are serious have an idea what they can get for their money today, and soon line up a few which fit the bill. They then try to buy at the lowest price, but don’t normally then say, “I think I’ll wait a year for prices to drop.”
There’s a very apt American term for that.

[CarlF]

As mentioned, the only GREAT deals will be sellers who have to sell for some external reason like a failing business, a divorce, or over leveraged stock bets. With the possible exception of "divorce", sailors don't usually have these problems. Too smart

The great majority of people with top quality sailboats are not in financial trouble and don't have to sell at a firesale price. Waiting a year means only the cost of a year's insurance, depreciation, and a mooring - not a big number. Might be worth a $5K-$10K discount on a $200,000 boat.

A bigger factor among larger boats in the US has been the strong dollar. British boats have been 1/3 off in the US just because of currency. As the dollar drops (moved a lot last week) this will firm US boat prices. I wouldn't be surprised to see an increase in dollar prices of highly desirable boats.

Unlike housing, sailboats did not go through a speculative bubble. Boatbuilders barely turn a profit in good times. Have you ever heard of anyone "flipping" a boat to turn a profit like condo's? As a result, there's never been an over supply of high quality cruising sailboats. Fewer sailboats were built in the last 10 years than the 10 years before - power has dominated (you can get a GREAT deal on a SeaRay right now!)

But a more important piece of advice. Owning a sailboat isn't about "getting a great deal". Not once in my life have I been hailed with "Did you get a great price for your boat?". And unlike almost any possession, it's as easy to love a 23ft $15,000 sailboat as a 55ft $1,000,0000 boat. I know.

Here's how to buy a sailboat. Find a boat you love that you can also afford. Be especially careful to not buy more boat than you can afford to care for properly. If you do, you'll feel ashamed every time you look at her. And find one that now has a loving owner. That's better than the best survey (but still get a survey - love can be blind). Agree on a fair price for her and assure the owner you'll take good care of her.

That's how you buy a sailboat.

Carl

[Celestialsailor]

Not all boats have mortgages on them. I would actually say less than 20%. Unlike the housing market which probably have 90% mortgaged. I think there will be very few cheap boats available at blue light specials. The people on the dock I talk to say if you don't sell, you don't loose. The economy will come back...eventually.

[TaoJones]

Originally Posted by Celestialsailor

Unlike the housing market which probably have 90% mortgaged.

Until the next census in 2010, we won't know the current percentage of homeowners who own their home free and clear, but after the 2000 census, the figure was put at ~38%.

TaoJones

[Jolly Roger]

Originally Posted by Celestialsailor

The people on the dock I talk to say if you don't sell, you don't loose. The economy will come back...eventually.

That's basically what we tell our real estate clients, and there is no reason not to apply it to a boat as well. If you follow Yachtworld.com for any particular make, you can see the boats which are sticking at their asking prices, frequently because the owners are not desperate to sell. I therefore don’t see how anyone can guess how “boat prices,” (implying every single boat), will react next year, or the year after. Some will be reduced for various reasons, others will stick, and even if that is subsequently calculated as a “general decline in prices,” it still doesn’t mean the boat of your choice will be reduced by that amount.

[Palarran]

I think few people who own boats would want to admit their asset has lost 30-50% of it's value. And it wouldn't make sense for boat brokers to tell sellers that as they wouldn't get a listing. Brokers also wouldn't admit that their sales volume has dropped by over 50% in the last 6 months. But, I just have to belive it's true.
There is no way unemployment can be 10% and the value of homes drop 30% with out a huge impact on luxury items. Boats, jets, jewelry, designer clothes - all are in trouble. Check out the stock prices of the companies associated with these items, they are in the gutter.
I also believe this decrease in value and volume is going to be a factor for at least three years. So it's my opinion that if your not getting the most smoking hot deal, they wait, it'll get better.