When Will Boat Prices Drop?

[mvweebles]

If it's anything like 2008 recession, will take a good year for buyers and sellers to adjust to new normal. Sure, at the margin, there will be more distress sales, but the vast majority of boaters didn't need a boat when they bought the one they have and will not sell at distress prices, though they will sell at a fair market price if they can be convinced the market has shifted downward - that will take 6-12 months or more.

For buyers seeking a decent condition boat, they will still have to kiss a lot of frogs - probably more as boats will deteriorate in the months prior to becoming a distress sale.

That's my prediction based on buying properties in 2011.

Peter

 

[mvweebles]

I expect that we will see a buyer's market for boats this Summer/Fall.

Jim - did I miss the memo flagging a sellers market? I've been fairly active in boats for 25 years. I honestly don't remember anything other than a buyers market for 95% of the boats out there.

Thoughts?

Peter

 

[HiDHo]

IMO sales of trawlers and semi-displacement boats will not change and might improve. I think most buyers will be financially set and have set aside disposable income for bucket list items. Improved sales may relate to cruising or anchoring out which fits well into social distancing. Cruising a boat out on open waters would be appealing to many people during the covid19 months/ years ahead.

 

[Airstream345]

Boating (and RVs) have traditionally competed for dollars with the vacation/second home markets. Generally speaking they are additive luxury markets.

One thing we’re not considering in this thread is the impact (or not) this virus will have on future lifestyle choices.

As people reevaluate what’s important to them (long commutes in congested cities for a big pay check, climbing the corporate ladder vs work [less] from home with an experience focused lifestyle while homeschooling the kids) will the dreamers out there decide that they don’t want to put off those far off dreams any longer?

My sense is some people may decide to simplify and reduce or at least focus their priorities more clearly. That may drive an even larger movement towards the Van Life, RV sailing, nomadic movements we’ve seen from 20 and 30 somethings over the last 5 - 10 years.

Over the last six months many of our friends and colleagues have gone from “What? You sold your house and live on a boat?!” to “Man, I wish I lived on a boat right now”.

I’m not saying demand will exceed supply in the short term but I do think some buyers may accelerate purchase timelines and sell the house, cash out the stock options to enable a new lifestyle choice.

 

[Nickair]

I don't think it is as much a matter of the economic downturn that is going to be caused by Covid-19, but that the younger generations are simply not interested in boating at the rate that they once were. There will be a shortage of buyers for larger boats. The younger people are buying center consoles, pontoons, and jet skis. No or low maintenance, a quick booze cruise and tie it up and go home. If you ask any person under the age of 35 "where is the starter on the engine?" I would guess 1 in 10 could answer the question. I agree that the really high end boats will hold value better because there are so few of them. You can buy a 42 Bertram for $40,000 with 800 hour Detroits in it. Six years ago it was $125,000 and 10 years ago it was $175,000. Granted this is one boat model, but I think it says much of where things are headed. Most of the younger kids also don't like the idea of pumping the carbon of two big diesels or big block gassers into the environment. At the current rate of carbon increase we are all going to need a boat sooner than we think. Many of the marinas in my area are closed due to high water. Big shortage of wells.

This above may have a part in the price of many things in the future. For now and beyond with boats and many other things, for the same reasons. The future will be interesting and it will be different.

 

[BruceK]

When the lender`s margin calls on financed stocks/shares come in.

 

[markpierce]

I do not care. Have no concern if my boat now has zero value. Never considered the Coot as an investment but rather a consumption. After all, it is a toy, purchased for its entertainment and nautical challenges..

 

[Frosty]

My sense is some people may decide to simplify and reduce or at least focus their priorities more clearly. That may drive an even larger movement towards the Van Life, RV sailing, nomadic movements we’ve seen from 20 and 30 somethings over the last 5 - 10 years.

It will be interesting to see how that goes. I was wondering if there might be some opposite trend that might favor either a nicer primary home or maybe a secondary (but "planted") vacation homestead. Reason I say that is traveling and not being a local is somewhat precarious right now and many vanlifers and overlanders headed for "home" for some security when the pandemic heated up (many are young enough to head back to parents' places or if older kept a home base).

Anchoring out or boondocking sounded good but in many cases (not all, to be sure) people were either moved on along or supportive services closed down. Suddenly your own, rooted homestead with known medical care and your support network seems nice.

But.... who knows? I was in the serious shopping for a trawler phase in January and early February but that's all on hold now. (So I'm interested in the topic for sure.)

 

[mvweebles]

It will be interesting to see how that goes. I was wondering if there might be some opposite trend that might favor either a nicer primary home or maybe a secondary (but "planted") vacation homestead. Reason I say that is traveling and not being a local is somewhat precarious right now and many vanlifers and overlanders headed for "home" for some security when the pandemic heated up (many are young enough to head back to parents' places or if older kept a home base).

Anchoring out or boondocking sounded good but in many cases (not all, to be sure) people were either moved on along or supportive services closed down. Suddenly your own, rooted homestead with known medical care and your support network seems nice.

But.... who knows? I was in the serious shopping for a trawler phase in January and early February but that's all on hold now. (So I'm interested in the topic for sure.)

I was a full time delivery skipper when 9/11 hit. I noticed a distinct uptick of empty nest age couples saying "life is too short. Let's buy a boat and head off cruising!" My read is massive jolts to the system add fuel to the bucket list fire. While I still think the overall sales'/value curve shifts downward as a result of economics CV19 as it did for 2008 recession, I would not be surprised if there is an uptick in cruising. Just not enough to offset other economic influences. For bucket-list buyers, I would think well maintained turnkey examples of boats will do better than neglected distress sale boats .

Time will tell.

 

[moparharn]

This is a interesting conversation. As for the Covid influence, I think Mama will say we are staying close to home and Papa will say I want to live before I get robbed of my future. Taking off and leaving aging parents behind to fend for themselves is not going to happen for people in my situation. One or two weeks max, but that is what many buyers do anyways I guess. The loop looks far less appealing to me now( I was hoping to do after retirement in 5-8 years). I do not want to leave my family for that amount of time, and I do not want to rely on health care that is unknown, suspect, or unavailable.
I really have a respect for "some" boat brokers. On the one hand they make money selling boats, but on the other hand the degree to which they try to keep the prices up is admirable. It is as if their future depends on better boat pricing levels. Also their dedication to their selling clients is quite noble sometimes.
I have been looking for a trawler for a couple of years. I made three offers on three boats last year. All three were rejected. In the last two months all three came back to me asking for a sale at the price we discussed. I wonder what changed? My future is more uncertain than at any time in my life. My dreams and aspirations have stayed constant or possibly become even stronger. My offers ranged from $100,000 on two boats to $150,000 on the third. What would it take now? I need maybe two months to make sure I still have some financial stability, but I am thinking it is going to take a $30,000 reduction to get me to act. I have no reason to believe that any of these buyers will accept that kind of reduction. One is locked into paying off a loan. Another has more money than he knows what to do with and the boat is in an estate (hard to get everyone to agree). The third (and my favorite) is probably not going to move unless the boat he wants gets a similar reduction (he is moving up some and the newer boats might not have as much drop).
It looks like I need to find a nice trailer boat until my future and the trawler market establishes its new reality (lower or higher). There is too much uncertainty right now. I will honestly say that if the right deal comes along all of this will be out the window. I will act if it seems to good to not act. My lifelong curse.

 

[JLD]

Jim - did I miss the memo flagging a sellers market? I've been fairly active in boats for 25 years. I honestly don't remember anything other than a buyers market for 95% of the boats out there.

Thoughts?

Peter

Overall, I think the prices of boats will drop. I will concede, however, that there are many, many, micro-niches in the boat market. It could well be that in some micro-niches there are big declines in boat prices, while other micro-niches maybe not so much. Maybe if we are looking at older trawlers, prices have already settled and there is not much room for movement left?

I disagree with the sentiment expressed in other posts that folks will move towards higher end boats and RV's in these uncertain times. I just don't see most Americans (not retired) putting a lot of money into depreciating assets during economic downturns.

I have looked into RV's (gas motorhomes, 5th wheel trailers) several times in the past 5 - 7 years, but I could never justify the cost, as I calculated that I would have to use the RV for 10-12 weeks a year to do so, and this was not practical while working fulltime. If folks think, boats are a depreciating asset, they should track the resale value of RV's! Then add in the cost for maintenance, insurance, fuel, and park fees. On the other hand, I could see many folks purchasing small, towable trailers, as they offer the chance to get away for little money.

Going back to boats, the reason that I think the overall market prices will drop, in part, because this is what buyer's expect in poor economic times. I think demand will slow. Combine this with more boats coming into the market for sale, and I think it becomes even more tough for someone to sell a boat at "old" prices. Yes, there may be micro-niches that are exempted, maybe very old boats and very new (not brand new) boats?

It will be interesting to see this Summer what some boats actually sell for, and what unsold boats are listed for. I have heard from some brokers that some boats are priced crazy high as some seller have unreasonably high expectations for the sale price of their boats. These are generally the boats that sit on the market for loooong periods of time.

Personally, I have a wait-and-see attitude. I was planning on buying my retirement boat in 2 years when I retire, but if I can find the right boat at the right price this Summer/Fall then I'll buy early. Otherwise, I will wait 2 more years.

Jim

 

[firehoser75]

moparharn,
My free advice (worth every penny you paid for it ) is that to me there are strong indications that there will be an overall "downturn" in the economy. Whether that has a large impact or a small impact on the sale of "used boats" remains to be seen. I think it will have a fairly large impact. The large group of relatively wealthy "boomers" will at some point be looking to liquidate their assets. This could be sooner due to Covid implications. There are lesser numbers of the following generations with disposable wealth and/or interest in boating, and the debt levels for personal, corporate, and Governmental debt are at the highest levels every seen, especially when compared to the GDP. Couple all of that with the uncertainty, unemployment, and the massive Government expenditures due to Covid-19, and I think you can follow my logic. Something has to give (at least somewhat).

However, also consider that time is marching on, and the time that passes is time that you can never get back! We can't make or buy more time. First, ensure that you are at least somewhat "stabilized" financially (whatever that looks like for you), and then, if you come across "THE" boat for a good price, pull the trigger, as long as you realize that boat buying is never profitable.

 

[moparharn]

Firehoser- Thank you. Good advice. I will admit that not being able to recapture time is a highly motivating factor for me. In spite of that, your advice to wait for a clearer picture of finances is good advice.
Coincidentally, my favorite boat (with somewhat immovable broker and seller) is in Canada. I suspect the exchange rates may or may not work in my favor (all of my offers have been in US dollars). I am not sure what surprises might await me during importation. The fees, taxes, and paperwork need to be clearly understood. The boat was made in Canada with a US built engine that meets current emissions standards. Beyond this I don't know who might be after me for what.
I have lost so many friends over the last 30 years that I started to feel that "counting " on any length of lifetime was not something I should be doing. Conversely, living as though I only have only today is even more mistaken. My demand is pent up for certain- thanks for trying to reel me in.

 

[firehoser75]

You are welcome, and hopefully it was useful. Often we (alot of people) lose track of the importance of limited time and the uncertainty of good health when trying to make financial decisions. These factors should be part of the consideration.

 

[tiltrider1]

As boats get older prices go down. Pick your boat, then pick your price. Keep watching and some day if you live long enough you will get to buy the boat at the price you picked.

Want a deal on a boat? Look at the 80’-100’ range. No one is buying 30 year old boats in that size. I see deals as low as $199,000.

So few boats were sold between 2008-17 that you won’t find many deals in those years. It’s impossible to make blanket statements about what will happen to boat prices.

 

[BruceK]

People like to get away from home. They liked to travel by air to other countries. They liked to take big ship cruises. Here you can`t even travel to your holiday home. Might they buy boats for holidays and getting away from home?

 

[ranger58sb]

I have looked into RV's (gas motorhomes, 5th wheel trailers) several times in the past 5 - 7 years, but I could never justify the cost, as I calculated that I would have to use the RV for 10-12 weeks a year to do so, and this was not practical while working fulltime. If folks think, boats are a depreciating asset, they should track the resale value of RV's! Then add in the cost for maintenance, insurance, fuel, and park fees. On the other hand, I could see many folks purchasing small, towable trailers, as they offer the chance to get away for little money.

We had occasion to take an unplanned road trip in the latter half of February... and we were struck (again) by the number of ACRES of new unsold RVs there are along the major highways. ACRES.

I guess it's been like that for decades.

I suppose it doesn't happen, but I'd have imagined one could walk into any dealership, offer a buck and a half for almost any unit on the lot... and drive away with it right then.

And all that was before COVID-19 issues...

-Chris

 

[RT Firefly]

Greetings,
Mr. 42. I've seen it as well and often wondered how some RV dealerships could afford to carry so much inventory. Acres and acres of RV's...

 

[PM]

I agree with "HiDho". I think the trawler and displacement hull market will stay strong. It may be the only boating market to hold its value. Maybe really small fishing boats which can be had for a few hundred will continue to do OK.

Post #45 says the big boat market is shot. I agree.

I have actually had people walk up to me or contact me through my marina wondering if my boat might be for sale or if I knew of any just like it for sale.

Understand that my boat is just "average". Maybe that is the appeal, people think the price may be modest. Its an Albin, not a Grand Banks, just a nice middle of the road (stream) boat. It is a nice complement when it happens though.

pete

 

[OldDan1943]

Like the old adage goes. "Significant price drop Tomorrow, Free beer tomorrow also"

Seriously, I think it is starting to happen right now and I also think it will be steeper than Baccus anticipates.

pete

The major price drop will occur the day after you pay for your boat.

 

[FF]

" I've seen it as well and often wondered how some RV dealerships could afford to carry so much inventory. Acres and acres of RV's..."

They do it the same way car dealers do. the factory owns and finances the inventory , it changes hands on final sale.

That way the dealer can have access to inventory that is not on his lot , and not have to wait for a unit to be built if he has a customer.

 

[ranger58sb]

" I've seen it as well and often wondered how some RV dealerships could afford to carry so much inventory. Acres and acres of RV's..."

They do it the same way car dealers do. the factory owns and finances the inventory , it changes hands on final sale.

That way the dealer can have access to inventory that is not on his lot , and not have to wait for a unit to be built if he has a customer.

Yeah, I assumed it must be similar...

But geez, looked like 20-30 of the same model amid those ACRES of multiple brands, models/sizes... and these seemed way bigger than new car lots, even considering the differences in unit sizes.

All that from road-speed observation, of course, not any in-depth look at why a given dealer might have so much inventory...

-Chris

 

[sunchaser]

Buying a trawler at this time is difficult given hazards of air travell, meeting with sellers, brokers, and surveyors; and most importantly, is now the time to give over some serious cash.

What's the thinking on this forum for where the market is heading, and when?

Buyers determine market price, not sellers. Find the boat you like and make a low ball offer. You may be pleasantly surprised. Voila, the market has dropped. Get all your financing in place before doing any serious shopping or better yet pay cash.

 

[smitty477]

" I've seen it as well and often wondered how some RV dealerships could afford to carry so much inventory. Acres and acres of RV's..."

They do it the same way car dealers do. the factory owns and finances the inventory , it changes hands on final sale.

That way the dealer can have access to inventory that is not on his lot , and not have to wait for a unit to be built if he has a customer.

"They do it the same way car dealers do. the factory owns and finances the inventory"
Car dealers own their inventory but most finance it until sold thru a manufacturers financing arm. Likely the same with RV's although I have never been directly involved with them.

 

[Island Bound]

Anytime someone decides to chuck most of their former dirt dwelling "stuff" (including the dwelling) to embrace the liveaboard lifestyle, you can rest assured that considerable thought and effort has gone into the process. While some people may be envious of your housing choice, many others would be aghast at what they might envision as camping out 24/7. When my wife and I committed to purchasing Semper Fi in the summer of 2013, we were comfortable in the fact that the Great Harbour N37 was the right boat for us.

Equipped as she is with a full size 22 cubic foot double door refrigerator, Fisher Paykel dishwasher drawer, Splendide W/D combo, queen sized island berth, walk-in engine room and tons of storage, we are definitely not camping out. I bring this up, because one of the reasons that living aboard a boat had appealed to me was the idea that it could function not just as a place to live, but also as a bug-out or self isolation vehicle if things started going south ashore. At the time, I was thinking more of an economic crash than a pandemic virus situation, but I think that the concept of being on a self contained trawler style boat away from large cities has proven its worth during the past couple of months.

It takes a certain kind of individual to make a drastic change in their life from what they have known and are comfortable with to something with so many unknowns, but I wonder if more of them will start looking hard at doing just that. If so, that might help cushion the market for well cared for and maintained trawlers in the 35' to 50' range.

 

[MonarchBeacher]

Boat prices dropping?

Due to the "lock-downs" I am seeing many boats being pulled off of the market. One of the main reasons folks sell their boat is lack of use due to competing activities. Now that they are cancelled the activities are limited to "boats, bicycles, booze and living rooms. I see sellers, for now holding firmer on pricing. We'll see in 4-5 months.
Also since 2008, I am seeing fewer boats being financed: many more are paid for with "cash". So there is more equity in the current fleet than the last time around.

 

[Gabe n Em]

Here's an interesting perspective for some of you: we're closing on a boat at the end of this week! We had looked in the fall and liked it, made an offer but couldn't close the gap. They approached us a couple weeks ago and we made it happen. We are FINANCING the purchase, to a certain extent to keep the extra cash on hand. Loan rates are low and nows the time. They're even ticking upwards already. It's practically free money if you can cinch a low rate...I know I know, "no such thing as a free boat".

Also, for the "boomer" side discussion: this is our second liveaboard and we're both 31. Maybe we're just outliers through and through.

Cheers

 

[HONUHYC]

I have enjoyed reading this thread and the various perspectives. If I decide I want a bigger boat, I hope prices for them crash because nobody else wants one. However, to do that, I would have to sell the one I have now, thus I hope that the prices are running up on them due to feverish demand.

All kidding aside, I do think there is something to the demographics and the lack of interest in "working on things" in the younger generation. As a tail end baby boomer at 60, most of the bigger boats at our club are owned by older folks than I. We also have a lot of empty slips. Supply and demand changes from changing tastes and demographics may impact the future market as much as COVID. That said, while I would like to be optimistic, I think COVID will result in a depressed market. I had not thought about it before, but the observations of a lack of maintenance preceding a distressed sale make sense too.

 

[SMLBill]

As we are "in the market", I've been watching closely for any signs of prices dropping. I've only really seen evidence of it on the super high end yachts (over $1m). Virtually everything I've been watching under $250k hasn't budged a nickel. (The only exception I've seen to that is among Mainship 39's. There are a LOT of them, at about $25k less than last year.) Maybe the sellers would take less today than in Feb, but it doesn't show in the asking prices, nor in the new listings. The boats I've personally toured where "the owner is very motivated" are real dogs - generally neglected and unused for 2+ years. The repos are the worst - truly nasty with bottomless expense exposure. Clean, well-maintained boats are rare, especially older ones, and their owners know it. We found one we love and negotiated the price prior to the COVID Collapse. Maybe she's worth $10k less today than then, but I doubt it. Rather than spending another year looking (and hoping), we'll just go ahead and buy this one and enjoy boating rather than boat shopping. To reinforce Bacchus's comments, a big part of our own motivation to bite the bullet now is that we have decided to give up our exotic world travels and settle down for a couple of years "controlled environment" cruising. I suspect that there are more like us feeling the same way, which should increase demand for the good boats. If you believe that the price of all this government stimulus is going to be massive inflation at some point (I do), buying a good boat today may look like a very wise move a couple of years down the line. But, Who Knows Tomorrow?! Better to live today...

 

[rider1964]

Those of us who knoe the answer to this

are busy cruising the world with unlimited resources, having also called all the market highs and lows.