What's up with boat prices?

[Tom Ipock]

It's unreal to scroll thru Yachtworld and look at how the prices are dropping on used Hatts (and assumingly everything else). I am wondering if it is just because of fuel prices, or is it because everyone has taken their boating money and put it into the recent real estate "run up". If it is the later, that "runup" seems now to be quickly halting. Could that bring some strength back to the boat market? Just curious - I have seen boats in the past year drop in asking price over 40%, and they are still not getting offers. At the same time, over the past 5 to 10 years, values have held extremely well in the midst of all the craziness of the stock market. Is there rhime to reason?
Tom Ipock

 

[may]

ya got me.
my boat has been for sale at the lowest price=nada

 

[Maynard Rupp]

Here in the Detroir area, there is no real estate runup. The economy here really sucks. My sons live in southern Florida and that area is a whole different story. Amasingly enough, my local boat broker friends say the used boat market here is great. Go figure. I guess that people today are concerned about investing in a larger boat that comes with lots of ownership expenses. Well fees are high, fuel is high, insurance in some areas is insane. I guess maybe a trailerable center console boat that you can keep in your yard has some advantages.

 

[may]

down to 89k on a nice 40'dcmy 87=nothing.

 

[Avenger]

ya got me.
my boat has been for sale at the lowest price=nada

Hi May,
Have you tried posting your free boat in the "Boats wanted and for sale" section of the forum? I would think that somebody would want to be the owner of a free 40DC Hatteras, unless it's a submarine.

 

[may]

not free 87k .still no offers.3k under next boat.never thought selling a hat could be a problem.these boats are the best. i love it ,but it is time to move on.

 

[Avenger]

Sorry, saw your first post and thought you were giving it away, although sometimes a free boat is still a loss. Best of luck with your sale.

 

[may]

scrod
nada = no offers. took your advice
thanks

 

[Genesis]

First, post it HERE.

Second, I've never heard a boat broker say that the market sucks. Ever. I've also never heard a real estate agent say the market sucks, but considering that the raw statistics say that there was a net drop of sixty percent in residential single-fam home sales in this area year-over-year, I'd say the market DOES suck!

Reality is that the boat market is EXTREMELY soft. Boats ARE selling, but not for what they used to, and bigger boats are becoming a bigger problem due to all the issues cited. As dockage becomes harder and harder to find and more and more uncertain as to its stability both in availability and price, and insurance trends towards unobtainium values are severely impacted.

Fuel cost is also a factor, but not the big one. The big one is being concerned that your marina is going to turn into a condo complex within a year - the others all have in the area - and you'll have nowhere to put your boat. Now THAT'S a problem. So is not being able to find insurance for less than double what it was a couple of years ago, and then with a 20% hurricane deductable!

That center console in my driveway looks awfully good right now...... sadly so too. I don't think the municipalities have thought this one through (the dockage sutff) very well - how many tens of thousands of dollars per year in sales around the local economy do they lose in local business when someone like me sells his big boat and buys a trailerable CC? Hmmmm.... let's see - no marina charge, I buy my fuel at the gas station (cheaper than on-water prices), I have 1/10th of the maintenance expense and my insurance bill is 1/4 of what the Hatt's was.

I loved my Hatt but the simple reality is that this immediate area is getting to be impossible for large-boat owners unless you have deep-water dockage behind your house. I have dockage - but its not deep enough and I could not get a permit to dredge. So there you have it.

 

[jeff shayne]

energy prices are having and will have a massive effect on how people spend their money-until it feels normal [like health and all insurance], bright side: I would rather be "stuck" with a hatteras then most anything else out there!

 

[luckydave215]

I read in the local boating newspaper today that the marine industry in San Diego contributes 1.2 BILLION to the local economy annualy. Yet the port district can't be persuaded to give permits to simply rebuild old delerict wooden docks, let alone build new marinas. And we have >50 miles of shoreline in the bay, at least half empty.
At most marinas in town, the waiting list for a slip is more than 7 years, even at $20/foot/month. Some of the bigger slips are over $35/foot.

 

[spartonboat1]

I thought I heard that boat sales at the Detroit boat show were good, but no stats. Pretty slow traffic going North on Memorial Day in MI. But realtors just gave notice that sales up in N. MI. I suspect many of those retiring with good packages from GM, Delphi are taking their money up there.

I notice a couple 35' slips are empty in my marina, that are usually occupied. Hope it keeps my annual fee down.

Only thing that keeps me in my old Hatt is that I can't go the $250-600K for a 2nd home, nee, even for a first home. The Hatt is my floating cabin.

 

[SeaEric]

Prices are lower, but boats are selling. Resale prices of Hatteras boats have held up well over the years, but are now falling, especially in the larger boats. There's a lot of inventory out there in the 70' range Hatt MY's. I have seen some late 80's - 70's sell for near $500K. These are boats that were $1.M+ not long ago. Supply and demand. The Euro look, sadly, is what has become most popular.

 

[Brian Degulis]

I'm not sure if the whole market is down I just sold a 55' (very fuel efiecent) trawler for more than I thought it was worth. And purchased a 61' Hat for a lot less than I thought it was worth so fuel may be a bigger factor than some think it is.

Brian

 

[Paul45c]

At most marinas in town, the waiting list for a slip is more than 7 years, even at $20/foot/month. Some of the bigger slips are over $35/foot.

Holy cow! In S Florida I believe my local marina is about $12/ft. for a monthly -- and it's a pretty nice facility with new concrete piling docks.

 

[trogers]

The boat is worth what you can get someone to pay for it.

We all know that there is value that we think that it is and then there is the value that we might be able to get for the boat when someone has to sign their name on a check.

I'm not so sure that fuel directly affects value as most any boat can be run in a 'displacement' mode to be more conservative with its fuel consumption.

When I was looking at 53, 56 and 58's last year prior to my purchase of my 56 I had opportunity to talk to several brokers and it was interesting to listen to their various interpretations of what drove a boat's value. Several made specific reference to the value of boats in the 70'-80' range and that the cost of ownership for a ~70' foot boat was not largely different from a 100' boat. At least where it relates to cost of crew and maintenance.

For the most part I think our memberhip is defined by boats in the upper 30's to the low 60's. I think that values influenced by buyers whom are choosing between and older Hatteras and a new Carver/Carver type or otherwise Eruo look.

A broker shared with me that the new Carvers of similar size were setting records for annual depreciation, faster than any other boat on the market. I think that the value of our boats are negatively influenced by that, but at a more fundamental level, by the increasing supply of these more production built boats in 'our' range. Throw in a increase in fuel prices, add in a slight increase in lending rates, increase slip fees.

A perfect time to upgrade to a bigger boat. OK that last part was 100% pure boater rationalization.

 

[Genesis]

Yeah, if you talk around a bit you find that these boats are a "niche" market.

They're for discriminating buyers, to be blunt. They don't have the sex appeal of the chlorox bottle set, they're not "euro", etc.

And - all that stuff sells - at least it does today. And then the depreciation starts (in part because they're not really built all that well) and whoa! Now you've got a problem!

The guy who's been around boats for a long time knows how to discern value from not. But - there are fewer of us, as a demographic, than there are people with "new money" who want something "sexy."

Just look at the sportfish market. Everyone wants 30kt cruise. EVERYONE! How often can you USE a 30kt cruise guys? One day in 10? So you're buying something you can use 10% of the time but paying for it ALL the time.

How come this doesn't sound so smart to me?

 

[Dave Phipps]

If we assume for a moment that a potential buyer has a price range in mind, and evaluates what is available in that range, he may well have a choice of an older Hatteras and a newer euro styled boat for the same money. The older Hatteras will likely be larger, more functional, and better built, but it will also be older, and will be perceived as requiring more maintenence. The clorox bottles have no exterior teak, newer interiors and engines, and can for the most part, be hosed off and used.

I keep a log book on board and record all of my maintenence activities, including the number of man hours I spend on various tasks. I'm not independently wealthy, so I'll do many things as long as they're within my abilities. The truth is, there is a lot of maintenance on these boats...the teak alone on my 53 Classic requires about 80 to 120 man hours a year. The bottom requires about 16 man hours for prep and one coat of bottom paint. And there are dozens of other tasks as we all know. THE PAYOFF is that I have a boat that I could not otherwise afford...a newer model boat that offers what the 53 offers me would be double, tripple, or quadruple what I have in my boat. The buyer who is most happy with his Hatteras is someone who knows what he's getting, and knows what it will take to keep in in good condition. And as we all know, a Hatteras in nice condition still brings a good deal of curiosity and compliments on any dock!

The buyer who simply wants to go down to the marina on the weekend and hop aboard and party will buy the clorox bottle.

Having said all of this, the point is that the value of the Hatteras is observed by an educated and experienced buyer...and I'll bet they're still out there. But while there are many complexities that influence markets, I also believe that luxury purchases and housing are usually early indicators of economic change. Perhaps the market is slowing for all of the reasons discussed in earlier posts...but I hope it's a long time before any of us gives up our boats!

 

[luckydave215]

Take solace in the fact that the value of those cheaply made clorox bottles will fall faster than a rock down a cliff. Most of our boats are bottomed out, depreciation wise, and will hold their remaining value for many years to come.
As time passes by, our high quality boats will continue to give us the pleasure that all fine hardware has to offer to the discriminating, and be a pleasure to be around instead of making us swear at them as they disintegrate.
Most of the new carvers will be headed to the grinder when our Hatt's are still going strong. New and flashy is no substitute for quality in the long term.

My 20 year old Porsche looks and runs like new. My 14 year old Ford is on it's last legs. It's the same with boats.

 

[jim rosenthal]

I wonder where the bottom of the depreciation curve is on boats. I would be interested to hear what you all think on that topic...at what point does a well-maintained older boat like a Hatteras start to gain value? I have no idea. I am not sure it is something that can be determined, but I am curious to see who thinks what...