Question(s) for older boaters...

[toocoys]

If you've been around boats for a few decades, have you ever seen a boat market like we have now? Low inventory, high demand etc.

If you have seen a market like this, how long did it last? What caused the fall, and how long did it take to return to 'normal'?

 

[Macrophylla]

Recreational boat sales last year almost reset the record years of 2006-7, you probably remember what hit the reset button in 2008-09.

This year had the potential to completely obliterate those records (tons of demand) but due to the near-universal supply chain disruptions, I doubt we will see the delivered boats count come anywhere close to where the demand would suggest that it will be.

On the smaller side of the market both low-end and, high-end manufacturers have completely sold out of their 2022 and in some cases 2023 production. In the midrange and larger markets (sail, trawlers, planing yachts) most builders are quoting 2-3 years from deposit to delivery unless there is a boat that was ordered for dealer inventory that somehow isn't spoken for.

If you are trying to time the market...what you are looking for is massive disruption of the global economy that affects the global 1-3%. You'll want to make sure you have cash on hand to take advantage of the firesale as financing will evaporate when the top 1-3% are impacted.

Or... don't attempt to time the market, buy something, get busy living, enjoy your boat.

 

[Mr. Ed]

I'm not a financial wizard by any means, but IMHO we had a perfect storm of contributing factors. First, we had a booming economy for several years prior to Covid. Most folks (granted not all) saw meaningful gains in their net worth, as well as discretionary income. Throw Covid into the mix and that put a serious kink in the supply chain. A boat is obviously a combination of hundreds of components from different sources, and when those sources either cut production or shut down, even for a short time, companies that used just-in-time inventory management didn't have the stock on hand to complete boats. Many builders either closed or reduced production due to staffing issues.

Lots of folks got bored, frustrated even, with the situation of being masked up, being told where they could eat (carry out only vs. dine-in, work from home, etc.) Enough folks decided that it was time to scratch their boat itch that might have been festering for a long time. As the saying goes, "If not now, when?"

As always, folks chose both new and used boats. Given that most (if not all) boats are a compromise, folks probably settled for what they could get. If they couldn't get a new model in less than X months and a used one was sitting on the lot, well, instant gratification won out.

It will be a very slow process to fill backlog and return to pre-pandemic production. My guess is that it will look like we're back in 2 years, maybe sooner... unless new pandemic restrictions are implemented. Then all bets are off. Suppliers are still facing staffing shortages, as are builders. Lots of boats have been pre-sold and it will take six months to a year at least to fill those orders If and WHEN builders can get the supplies.

 

[toocoys]

Or... don't attempt to time the market, buy something, get busy living, enjoy your boat.

We already own our boat outright, thankfully. The only issue we would/could/might face in the next 2-5 years would be engine shortages if we decide to repower with diesels.

I asked because we got a new boat neighbor last week. After talking to him, we found out it took him many months, many attempts, and many miles to find a boat. In some cases he was making offers sight unseen and before he could fax the offer, the boat was already under contract. In fact, the only reason he ended up with the boat he bought was because the person who contracted before him backed out or lost their financing or something.

I've heard it said that the market is softening and that things are going to turn in the next year, but I've also talked to local brokers who say that the perceived very slight slowing of sales right now is just due to the time of year, and that they don't expect things to slow down significantly any time soon.

 

[firehoser75]

Many economists are predicting very large market downturns. Markets are at all time highs and have shown what some are calling "strange" behaviour (in that they have climbed even higher (after years of a bullish market) in the face of businesses closing, high unemployment, shutdowns, etc.) At the same time, there is record debt of approx. 380% of GDP (both Government, Corporate, and Personal debt), with Trillions of dollars added to the system. Adding dollars to the fiat currency usually results in inflationary pressure. Inflation usually causes rising interest rates (remember the high debt).

I hope these people are wrong, but indications are that the "bubble of all bubbles" will burst, and probably sooner than later.
I suspect that things like boating, RV's, and other descretionary spending could be fairly hard hit.

To the question: personally I have never seen or heard of a boating market like this. We sold our boat in late Feb. in 5 days with no broker only advertised here on TF and on 2 other Nordic Tug specific forums. I never would have thought that likely in earlier times.
By the way, don't take your economic advice from me, talk to a pro.

 

[toocoys]

By the way, don't take your economic advice from me, talk to a pro.

Thankfully (with advice from our adviser) we've made decisions and positioned ourselves in such a way that we wont be affected by the downturn. Aside from a single truck note, and a very small amount of CC debt, we are pretty much debt free. The only downside I can see is that if we decide to sell, not only will it be harder to sell, we'll probably get less for it. But then there's always the option of throwing in some rebuilt Perkins 120's and taking life a little slower.

 

[BandB]

If you've been around boats for a few decades, have you ever seen a boat market like we have now? Low inventory, high demand etc.

If you have seen a market like this, how long did it last? What caused the fall, and how long did it take to return to 'normal'?

2006 and 2007 were just like this. Even higher sales.

Lasted until a recession.

If you consider low prices normal, we had them in 2008-09 but no one was buying. To reach any sort of normalcy after the recession took years and perhaps hit it around 2015-2016, but sales were still well below the peak.

I hate using the word "normal" because huge fluctuations are the historic normal. Markets expand and grow, inflation hits, along comes a recession, and then we start all over again.

I'm personally shocked the recession hasn't hit yet but inflation is certainly hitting now and I'd be shocked if a recession didn't follow within the next one to three years.

 

[High Wire]

One memorable boat sales crash was when the Luxury Tax was implemented in 1990-1991. It just stopped new boat sales cold. Boat building stopped in the US and layoffs everywhere.

 

[BandB]

One memorable boat sales crash was when the Luxury Tax was implemented in 1990-1991. It just stopped new boat sales cold. Boat building stopped in the US and layoffs everywhere.

And even when repealed, it took a while to return to previous levels. The market always responds and turns slowly, and always takes many times longer to recover than it took to fall.

 

[kthoennes]

I'm still using my (highly scientific) eBay barometer. We bought our current boat on eBay, and the 32 Carver before that through Craigslist (just been lucky twice). Both well under six figures at the time, around 2015 for the Mainship. When we shopped for our current boat on eBay, I would browse 25-30 listings on any given day for boats over 40'. One day last week there were none listed -- zero. Today there are seven, average "buy it now" price -- $608,000. We would like something bigger, but it's like our house lately. Nice to have something bigger and maybe newer, and selling is easy, but then we'd have to buy the next one...

 

[Jeff F]

And even when repealed, it took a while to return to previous levels. The market always responds and turns slowly, and always takes many times longer to recover than it took to fall.

Yep. In the case of the US many well known manufacturers were not around to respond to the the slow growth in demand that came after. The luxury tax was a black swan event for the industry.

The supply of boats is inelastic. Most of the available inventory is used, and manufacturers are constrained in their ability to ramp up on demand. There is always some distress selling in a downturn, but not as much as most people think.

The demand is wildly elastic. People spend on luxuries in good times and sit on their money in bad times. I kind of suspect the current boom is related more to lifestyle changes as a result of covid and perhaps the urge to do more locally. If it sticks, it may raise the demand baseline to a new level.

I'm curious about the fate of the big cohort of boats from the 1970s and 1980s. Many are at the point where they could be reconditioned and provide another generation of service, but without major investment will be scrapped in the not-too-distant future. Their fate is largely based on the broad-based demand level. I've seen a few recent sailboat restoration projects that were undertaken as an alternative to new. Maybe it's a blip, but it's an encouraging sign.

 

[toocoys]

....but then we'd have to buy the next one...

And pay, or even over-pay for it!!

 

[ranger58sb]

But then there's always the option of throwing in some rebuilt Perkins 120's and taking life a little slower.

My best unsolicited guess: Not a good approach. It's a planing hull, would be best sold as a planing boat... and if you want a different ride, you'd be better off just buying a different boat with hull form and engines that you'd prefer.

I's often the case that a diesel repower of a boat worth X costs a lot of $$$ and the boat is still worth X ( or maybe X plus 10%) afterwards...

All FWIW, of course....

-Chris

 

[magna 6882]

I think one thing,like ourselves, found the covid thing a good opportunity to get out of the grind. For us reducing our income,reducing tax exposure,not sell anything resulting in capital gains and just a feeling of (I'm Done ). grinding away and giving half mill to the government every year for us is over. I think a lot of folks are thinking the same. Im just going to sit back and watch the sh*t show. Either from the boat or the RV.

 

[rslifkin]

My best unsolicited guess: Not a good approach. It's a planing hull, would be best sold as a planing boat... and if you want a different ride, you'd be better off just buying a different boat with hull form and engines that you'd prefer.

I's often the case that a diesel repower of a boat worth X costs a lot of $$$ and the boat is still worth X ( or maybe X plus 10%) afterwards...

All FWIW, of course....

-Chris

In most cases, I agree. At minimum, it's not worth a diesel conversion until the gassers are worn out.

 

[Seevee]

For the most part, when we see this kind of demand and super high prices and inflation there's always a leveling or dropping of prices and a slowing of the sales. It's just a matter of how much and when. Just look at history. And so many say it will just keep going to which I'd say baloney.


So, if you really need something now, just pay the price and just expect it to go down and live with it.



I sold and bought this year. Sold for very high price, but paid high price for my next one.



I've sold some of my real estate and expect to buy it back cheaper in years to come. Put those dollars in oil and enjoying the stupid administration make me a enough to switch from beer to scotch... but hate the stuff.



It's amazing how many pros get stuck with this inflationary stuff and end up broke... see it all the time.

 

[toocoys]

All FWIW, of course....

-Chris

In most cases, I agree. At minimum, it's not worth a diesel conversion until the gassers are worn out.

Good thing I wasn't asking for opinions was I? Not only were your opinions and responses not requested, they weren't even on topic.

 

[FWT]

Oil prices. Stock prices.

When stocks were high and rising into 2000 with high incomes, high investments levels that could be channeled into boats, and low fuel prices there were times when it felt like you could walk across the Chesapeake from boat deck to boat deck.

Fast forward to after the 2000 crash and oil prices rose and the Bay was empty, even of sailboats. Even if you owned it, many couldn't afford the fuel to run it often.

That's not scientific and maybe some other demographic issues in play as well.

Harleys are sold to middle aged men with good incomes by the way. When there is a demographic bulge of such buyers hitting the key age brackets their sales do well, and fall off when the size of their demographic market shrinks.

 

[Group9]

You should have been looking for a boat in the roaring 80’s. These are bargain prices by comparison.

 

[ranger58sb]

Good thing I wasn't asking for opinions was I? Not only were your opinions and responses not requested, they weren't even on topic.

Hard to tell on a forum like this if someone's asking for opinions or not. Many who are don't actually include the words "please share your opinions on...." and when they throw something out there they really do hope for discussion. And most responses are really well meant, even if it's not always easy to tell that by the tone of stark words with no personal interaction.

But if it bothers, you... chill. It's a forum. People talk. Accept it or block members or get over it or whatever. And if you really don't want opinion/commentary on various subjects, either say so explicitly each time... or don't bother to post anything that might elicit any kind of response.

-Chris

 

[ofer]

Hard to tell on a forum like this if someone's asking for opinions or not. Many who are don't actually include the words 'please share your opinions on...." and when they throw something out there they really do hope for discussion. And most responses are really well meant, even if it's not always easy to tell that by the tone of stark words with no personal interaction.

But if it bothers, you... chill. It's a forum. People talk. Accept it or block members or get over it or whatever. And if you really don't want opinion/commentary on various subjects, either say so explicitly each time... or don't bother to post anything that might elicit any kind of response.

-Chris

you have to excuse mr. Toocoys he is having a bad day.

 

[Alaskaflyer]

I'm curious about the fate of the big cohort of boats from the 1970s and 1980s. Many are at the point where they could be reconditioned and provide another generation of service, but without major investment will be scrapped in the not-too-distant future. Their fate is largely based on the broad-based demand level. I've seen a few recent sailboat restoration projects that were undertaken as an alternative to new. Maybe it's a blip, but it's an encouraging sign.

1980 and 1991 model/mfr. years are two artificial cutoff dates that have been chosen by many financing sources such as banks. While plenty still pay cash for their boat, and plenty use HELOCs or similar financing with other assets as collateral, many, many more look for traditional boat loans. One reason 1970s and 80s models are the only decent supply inventory on yachtworld IMO.

 

[OldDan1943]

I still owe money on the AT. That is my only loan. Every time I mention to my CPA about paying off my boat loan, I get scolded by her. LOL
I pay 4.5% and write off the interest against my income.

 

[kthoennes]

We make our last boat payment next month (48 month term). Freedom! I'd be nuts to buy another boat now. Although, there is a 65 foot Neptunus for sale in Tennessee for $179,000 (asking) and sure looks nice in the photos...

 

[BandB]

We make our last boat payment next month (48 month term). Freedom! I'd be nuts to buy another boat now. Although, there is a 65 foot Neptunus for sale in Tennessee for $179,000 (asking) and sure looks nice in the photos...

Wifey B: You know you need it. You want it.

 

[guy with a boat]

Good thing I wasn't asking for opinions was I? Not only were your opinions and responses not requested, they weren't even on topic.

The beauty of a discussion forum is that you don’t have to ask. Post something and you may get comments and opinions. Welcome to the internet!

 

[BruceK]

Thankfully (with advice from our adviser) we've made decisions and positioned ourselves in such a way that we wont be affected by the downturn. Aside from a single truck note, and a very small amount of CC debt, we are pretty much debt free....

What`s a truck note? I see toocoys is busy, but someone will know.
FWIW,the market here is still hot,despite winter and a Covid 2nd wave. Same in car market. Real estate going gangbusters on cheap borrowed $ . What will stop it? A lot of people are flush with cash here. Signs of inflation are showing..but it`s uncharted territory, except (apparently) after the "Spanish flu"(misnomer!) we had "The Roaring Twenties", it may not be all doom and gloom.

 

[Gdavid]

What`s a truck note? I see toocoys is busy, but someone will know.

An auto loan for a truck.

 

[High Wire]

Wifey B: You know you need it. You want it.

Poking the bear eh?

 

[jreekree]

Crazy market

It took us 6 hours to sell our OA390 sundeck last December. The buyers had surveyed 3 vessels prior to finding ours. We thought perhaps we had missed the market at the time but broker said sales were, and are still going strong, there just were not very many good vessels on the market.
Of course, wait a couple years and there will be plenty when many of the new owners actually realize the hard work and high costs of properly maintaining a quality vessel.
There will be deals to be had.