Boat Prices, spring 2008

[thoward]

Delivery is what has caused us the most issues. I think we are at the end of the worst. Down here we felt the initial crunch 2 years ago and this year business is up 30% over last. So while we are just getting back last years losses and have a long way to go, if elections go well then 1Q '09 should start the rebound we are all looking for. I think you will find we are pretty close to rock bottom on quality boats as well. That said, I do not think boat prices will rise much with fuel prices where they are. That will remain a thorn in the large boat sector for now.....

[Funat50]

thoward, what business are you in?

I have to respectfully disagree with your optimism. I just read where the RV market is expecting another 30% drop this year and the typical RV owner has a similar socioeconomic profile as boat owners, and they can park the RV in the backyard. I firmly believe the yachting industry and boat prices will continue to decline through next year. More quality product will flow into to the market and lesser quality goods will languish. Based on listing it appears you are agressively priced on your 60, don't know the condition but good luck. At the right price everthing has a buyer.

[Genesis]

I think we are at the end of the worst. Down here we felt the initial crunch 2 years ago and this year business is up 30% over last. So while we are just getting back last years losses and have a long way to go, if elections go well then 1Q '09 should start the rebound we are all looking for.

"David Lereah, Why the housing boom will not bust."

Oh wait, you're not him.

Your optimism may be appreciated by some, but analytically, its misplaced.

"Elections go well?"

The problem here is fundamental to the economy - we have lived the last ten+ years on pure, unadulterated fraud. Now some of the worst offenders and their protagonists (The Fed and Congress) are doing their damndest to keep the game going instead of recognizing the losses and eating them, which is why you have $130/bbl oil - the market has (correctly) deduced that Treasuries are more akin to used toilet paper than "money good" securities.

The economy will not recover in a sustainable fashion until the bad debt is defaulted on, the payable debt is paid down, and we have a sustainable economic model where capital formation is based on savings and investment instead of theft and fraud.

Economic "growth" will not return in real terms until that happens, and "growth" based on false CPI numbers (thereby claiming a "growing" GDP when in fact that is not the case) won't help you fill your fuel tank or buy groceries.

If your livelihood depends on the consumer being willing to be an even greater sucker, I wish you the best of luck. The latest consumer confidence report out today shows that you have pushed your luck too far and lied for too long. Consumers aren't buying the lies any more - that game is over. Current inflation expectations are now north of 7% annualized.

Good luck getting people to buy big-ticket items with that set of core beliefs on their recurring operating costs.

Anyone remember the 1970s and what it did to boat prices (and manufacturers)?

Inflation expectations at the time were lower than they are now (and were exceeded in reality, just as they have been this time.)

We have to solve our energy problems and we have to get the fraud out of our financial system. Until then credit will continue to be constrained and if we're not careful we run the risk of tipping through the event horizon in the US in terms of private credit availability, which will lead to a 1930s re-run.

Those who have their livelihood tied to high-ticket recreational things like boats would do well to apply their efforts towards flushing the fraud out of the financial system and opening drilling for oil everywhere we have it, which includes off the coasts of Florida and California (yes, including literally out my back door near Destin), rather than wistfully harboring beliefs that "the market will turn later this year."

[Funat50]

I feel our current economic situation is akin to the old story about "The Emperor's new clothes". While the Emperor, our administration, listens to there advisors, the congress and senate, tell them how splendid they appear in their new clothes. As he parades in public many, the credit peddlers, agree and praise the wardrobe. Finally a child from the crowd, the family that got caught in the economic crunch and were foreclosed on, shout that the Emperor is naked. Finally the crowd quits kidding itself and realizes the child is right and there are no magic clothes.

[dbltime]

Thought I would register and add my 2 cents for what its worth.

I have been selling used Hatteras product (any thing else I can snag) since 1981 up and down the east coast of the US.

Our market had many years of boats holding their values or values creeping up slightly as demand was strong and supply average at best. Then in the late 90's, early 2000 the momentum started building flooding the market with all kinds of product and the gloss came off the more traditional product.

During this period mainstream houses are selling for increased value each year and buyers have little to no equity. How long can that last?

The boat market is now following the used car trends of depreciation with few exceptions.

Grand Banks 46 stabilized 1990/91 valued at $350ish two years ago are now selling for $225. Burger 64's that were selling $450 and up are now struggling at $250ish.

Good News! If you own one of the rare Hatteras 70's with walk around side decks, back porch and VIP layout your value is up!

The Hatteras 60' MY (1988-1990) with the big back porch, honey teak interior seem to be popular and steady at the $550 mark for a updated boat.

The Westbay 58's that were selling for $1,150 2 years ago are now below $900 if you have stabilizers, 3406's and a star.

So the Hatteras market is not alone here. Value are falling and will continue to fall however nice, updated boats are getting picked off and the seedy stuff nobody wants at any price.

All these boats sell in a reasonable amount of time if you service them properly and listen to the buyers. Buyers determine value regardless of what we think.

Everone wants a deal and there are deals to be had.

bill

[Roscoe]

Interesting response to Pascoe's latest ruminations:

I have a as new 06 Navigator here in Miami in low $500s! Prices in California have also been falling for the past two years due to lack of dockage. Some of the lowest sales of late model Meridian 490’s have been in LA area- All have gone north to Vancouver.
Engine surveyor told me of 70′ Hatteras with new paint that showed excellent (engines surveyed out fine too!) that sold for $205k!! The problem with these big yachts with 24 cylinders PLUS two big gen’s is they are truly “white elephant’s” that will eat you alive in upkeep. I consider them in the category of : “things you shouldn’t even take for free if offered to you”.
Pilothouseking.

http://davidpascoeblog.com/2008/05/2...-extravaganza/

[Funat50]

I'll take one! I prefer a 67CMY but for free I'll make a concession.

[doc g]

I assume that 70' was an older series boat w/o a cockpit and a fire sale. Anyhow at that price you could trash the 1271's ,put some new Cummins 230's in and paint the hull for less than 300K including the price of the boat. NICE trawler ,for less than half of what you'd pay for a "real" trawler most of which are junk made in Taiwan . Look at the prices for the 58 - 65' LRC's. Yeah they're down some but not like the my/cmy's.
Pascoe is SO doom and gloom perhaps because he does make his living from boats ,no sales ,no financing , no survey either. Of course there will always be buyers at some price. I guess lower prices ,driven by all this doom and gloom benefits some people...............Pat

[Roscoe]

1974 58 ft Yachtfish YW# 1835-1889249 reduced to $165k. Sale pending. (sorry, the link function won't work for me)

This boat appears to be well maintained. An example of what Sea Eric describes as a distressed owner, not a distressed boat.

[Passages]

Screaming deals are starting to pop up more often. Got a call yesterday on a 1978 33' Egg Harbor - Ask price of $16,000.

At that price, might be smart just to buy it for the summer, then donate it in the fall.