Spring '08 boat sales market.....

[Dave Phipps]

Just wondering what our professional broker friends are experiencing in the boat market this spring now that those of us with water on the brains are thinking boating.....in both new boat and used boat sales, and given the economic concerns...

The West Palm Beach show is going on now...I'm willing to bet that new boat sales are slowing a bit too....but it still looks like boats over 750K are moving.

Would I be correct in guessing that used boat sales for the average buyer remain significantly slower over this time last year?....

[SeaEric]

Properly priced used inventory is selling. Spring has been slow to arrive on the Chesapeake, but yesterday we sold 3 boats in one day. I am currently in Fl, went to the PBBS on Friday. To me, there seemed to be more show participants than spectators/customers. Overall, I think we will have as good a 2008 year in sales as ever. "Available" inventory to sell is becoming more of an issue for me right now. I have buyers, and no decent boats to show them.

If you look at, as an example, the 53 Hatt MY's that are for sale now- Most still out there are over priced or not very nice boats. The good ones that were priced well have sold. There is a ton of inventory but a lot of it will not sell anywhere near current pricing, given age and condition. Hopefully, sellers will get real at some point.

I have no point of reference for new boat sales.

[jmccubbin]

I was interested in seeing Sea Eric's reply as to 53 MY for sale and marketplace opinion. As I'm not in the industry I was wondering what facts he was using to base his statement that most of the correctly priced boats have sold in this market category. I find it interesting some broker's always make this same statement in regards to anything and everything that if it is priced correctly... it will and has sold. In principal I agree, but I have not seen any real material sales volumn of 53 MY out there that have occurred in the past year....period. Price or not price derived. Not that I'm saying he is wrong but as I have been watching....I have not seen the activity he referenced... just very little activity period. Not even price driven as people have been dropping prices (as I have witnessed on asking prices on Yachtworld) and the product still has not seen the sales momentum that you would assume. I'm going to ask a friend of mine who is in the business as a broker to get me a listing of all of the 53 MY sale's that have actually occurred this past year.....I'm curious? Everone out there that I have talked to has pretty much said the market is dead presently for this market category. These are the mechanics, brokers, marina guy's, etc.....As prices fall that may or may not correct itself but my gut say's the segment representing buyers for this price band and type boat is shrinking given general market conditions, age, demographics, etc.... and that price alone is not and has not been the sole determinant to that lack of sales. My instinct is telling me that price is going to continue to fall as there is very little buying interest...for this segment. It is a shame but it is what it is. We have a 53 MY....nice boat.....but we are not expecting much as to realizable value in the future...just continued deterioration in price....even with continued maintainance and updates as a result of a shrinking buying demographic. Sorry that I'm questioning his comment....and if he is correct I appologize....but I would like to ask what he predicated it upon. I have not seen the sales activity period this past year. Price derived or not. If he has these answers great....but I would like to ask him to substantiate his premise on more than just a global statement based upon price if he can. It would be educational at the least for all of us. I would very much like to know his oppinion on what he believes a 53 MY is worth, given condition, age, etc.....It would be nice to see an unvarnished opininion from a senior and experienced expert working successfully in this marketplace, especially if it can be factually supported.

[Genesis]

There is an azz for every seat; the question is ALWAYS price.

I assume you agree that at $1 someone would buy your boat (I, for one, would certainly do so.)

Therefore, the price at which the transaction will clear is somewhere between your asking price and $1.

If the boat is not selling, it is because under current market conditions, all things considered (make/model/condition/etc) the price is too high.

Period.

[SKYCHENEY]

There is an azz for every seat; the question is ALWAYS price.

I assume you agree that at $1 someone would buy your boat (I, for one, would certainly do so.)

Therefore, the price at which the transaction will clear is somewhere between your asking price and $1.

If the boat is not selling, it is because under current market conditions, all things considered (make/model/condition/etc) the price is too high.

Period.

I agree, but this also assumes that it is marketed correctly. If the potential buyers don't know that your boat is for sale, the transaction will never take place. You have to admit that the boat market is not quite as efficient as, let's say, the commodities markets. Boats are each unique and buyers look at many factors including location, emotions, condition, color and other non-rational things. Maybe they just don't like the shifty eyes of your broker

[SeaEric]

Yes, the market has changed for the 53 Hatt MY. No doubt. Most of the buyers who still would desire these old boats are balancing on 2 canes in old age homes. That said, there are still a lot of old school yachtsmen that think they can re-live the old days when only really rich guys owned 53's. Now its mainly a lot of poor guys, going broke maintaining them!

OK, here we go. Market research: SOLD BOATS Jan 1, 2007 to today. 38 units sold.

53 Hatt MY's built from 1968 to 1987. This includes 53 Classics, ED's and YF's.

AVERAGE selling price among all reported- $207,592. Still feel like a millionaire? OK, we continue- This includes all the moron brokers who post the SOLD price at the same as the ASK price (4 of them). One was reported sold OVER the ask price. Somoene on this forum the buyer? NOT. The low reported sold price was $90,000. The Tall Paul was at $390,000. (the broker and seller are still celebrating)

One sale was under $100K as noted ($90,000) 11 sales were $100,000. to $150,000. 7 sold from $150,000 to $199,900. 11 were $200,000. to $250,000. 2 were between $250,000. and $300,000. 4 sold $300,000. to $350,000. 2 sold north of $350,000. they were $375,000. and the aforementioned $390,000. It ends there. No market over $400K

So what does this mean? Beats me. I'd have to go do the same research for the 15 months earlier period in 2006. Not today. Suffice to say, prices are down, but 38 units sold in the previous 15 months. Not bad.

[SeaEric]

Same parameters- FOR SALE now. 79 units. Average asking price $270,000. Sounds like offers @ 75% of asking price are in order!

If you find a nice, well cared for boat that has a motivated seller, and you can buy at a fair (low) price, buy it. Someone else will.

[Maynard Rupp]

We own a 36' Hat and we would certainly be interested in a 53MY or a derivitive of that boat. Here are the concerns. Certainly slip fees and insurance. I know how hard I work on our 36' and don't look forward to 3 heads and old Detroits. I do, but hate, varnish work, and the 53 series has alot of bright work. The Detroits probably won't use any more fuel than our gas engines, but oil changes etc. are alot more. A very nice un-molested 53 or a 53 YF around $150,00 would get my interest for sure, but the ones I have seen in that range have been run hard and put away wet.

Eric's statement pleads the obvious. If your boat, house. car, etc. is priced correctly it is already sold. The proof of correct pricing is a sold sign.

[Dave Phipps]

Wow...these kind generalized comments are the source of many misunderstandings.....offers should be 75% of asking? Come on now....doesn't that depend on where the seller has priced his boat to start with? If he's "realistic" then 75% would be a lowball offer....

Eric, you yourself pointed out that about 8 of those boats sold above 250K...some for much more. Again, each case is individual...and depends on three things; 1) the sellers need to sell or his motivation to sell, 2) the condition of the boat, and 3) the buyer's desire to own that particular boat. That stands in the face of the convential wisdom expressed on this forum over the last several months, which asserts that these boats are not valued at anything near those 275-300K+ numbers.

There are "buyers" walking around right now looking for 200K and lower priced 53s...and many of them are of the opinion that that's all any of these boats should sell for in this market. Yet there are a still a number of boats at that price point on the market....and they HAVEN'T sold. So the comment that a boat will sell at a particular price if it's low enough, while true in the extreme, is somewhat of an oversimplification. You have to find someone who desires that particular boat in it's condition, and can afford the ownership costs as well.

Given the sophistication of the systems on board these boats, condition is extremely variable, and values are going to be affected commensurately; you could easily sink 100 to 150K into one of these boats.

In addition, someone who can afford a 300K boat and ownership costs is not necessarily looking for a 200K deal, because a 300K boat will likely be a newer boat in significantly better condition, and will likely cost less in the long run.

Aside from those sellers who were seriously motivated to sell at a significantly reduced price, most of the remaining 200K boats left out there are in need of signifcant attention, or are the older boats.

And lastly, notice how a signifcant number of boats remain for sale at 300K +, and they haven't sold or had their prices reduced. This would suggest that the owners either don't "have' to sell, or aren't willing to sell at distress sale prices. It will be very interesting to see how things play out over time....

Look at the Grand Banks 42's of about the same vintage...they're still selling for close to what they did 8 or 10 years ago.

In the end, it's still the same old dynamics of 1,2, and 3 above. As a buyer, you'll want to find the nicest boat you can afford, and hope the seller wants to sell for the dollar you're willing to pay. It would appear to me that the market is definitely slow, and prices are lower, but perhaps not as entirely low or desperate as some would argue.

dave

[Pascal]

Maynard. not a lot of bright work on the 53s... just the rails it's really no big deal. The rest of the brighwork isn't to exposed and some of it can be painted. My pilothouse doors and wing doors are imroned and zero maintenance. The saloon to aft deck doors are teak but away from the sun... zero maintenance.

Oil change? yeah 5 gallons per engine... $70 x 2 every 100 hours ? no big deal.

i'm always a little sckeptical when I hear real estate or yacht brokers saying that everything is fine... it is from a brokers point of view as long as the sellers are willing to drop their prices. but when prices drop like they are, i can't agree that the market is doing just fine because x boats have sold.

as to the increased depreciation of classic Hatteras? i look at it this way. Yes, my boat may have lost 30% in 4 years... but that new sea ray in the next slip lost taht in 1 1/2 year!

I'm ahead.