Covid and the used boat market

[Njlarry]

Any guesses based on prior recessions how the used boat market will fare over the next 6 to 12 months. As Steve Hilton has pointed out this is more than a recession. During prior recessions companies took in less income vs NO income in the current panic. No indication of how many months this could go on and closed companies can only take on so much debt even if interest free.
I haven't found any info yet searching thru the marine industry on the web.
I ask as we were in the market to trade up but now aren't sure how to value any new purchase.

 

[smitty477]

Any guesses based on prior recessions how the used boat market will fare over the next 6 to 12 months. As Steve Hilton has pointed out this is more than a recession. During prior recessions companies took in less income vs NO income in the current panic. No indication of how many months this could go on and closed companies can only take on so much debt even if interest free.
I haven't found any info yet searching thru the marine industry on the web.
I ask as we were in the market to trade up but now aren't sure how to value any new purchase.

I do not know in total - but our used boat value went down much less than the
markets over the last downturn. It also appeared to recoup value faster then the markets did given the fact that used boats do depreciate somewhat over time.
I think the real key element this time will be the recreational boating business in general - how large will it be in a couple of years?

 

[ancora]

I look at Yachtworld every day and have not seen any price changes yet, here in Southern California. As an aside, I have always sneered at slip-huggers, and now I are one.

 

[GFC]

Ancora, I'm not sure your comment has much validity. Not trying to be argumentative but if I had a boat on Yachtworld I likely wouldn't change the listing price but I likely would consider a lower offer if one came in.

The diff between listing price and selling price is very flexible and subject to change as market conditions change. Supply vs Demand.

 

[Ken E.]

Boats being a highly discretionary purchase weighed against a collapsed stock market can't be good.

 

[Frosty]

I was on the verge of serious shopping/buying something "trawlerish" in the 30-38' range right when Covid-19 reared its ugly head. I had a couple of boats in mind to go look at.

Now? It's a mystery as to what to do. (Not to mention my net worth is not exactly "up" at the moment.) Hunkered down for the time being. Part of me wishing I had bought one a month ago; partly glad I didn't (?).

By one definition, the monetary value of a boat is what someone will pay for it. Does that track stock market trends at all? Or? (I have no idea.)

 

[hayesdvm]

Frosty,

I am with you. I had been looking at trawlers and downeast boats over the last 6 months, but in the back of my head I was worried that a recession was in the future. Didn't expect anything like this, of course, but remembered looking at the boat prices back 10 years ago and they were much lower and there were many more on the market than after the economy recovered.

I had decided to wait a bit, plus I had not reached the point where I was fully retired and could justify the purchase of a go-slow boat. And I had just started looking at alternatives as an interim boat.

My thought now is if you find a used boat you like, offer the owner about 75% of list price and suggest they can go plug that in the stock market and a year from now they will be way ahead of the game. Unless they owe money on the boat, of course, then they may be upside down if boat values fall with the stock market.

Mark

 

[firehoser75]

Boats being a highly discretionary purchase weighed against a collapsed stock market can't be good.

First off, I am not an economist, and anyone who comes to me for stock market advice has rocks in their head.
However, I agree with Ken E. Sorry Ken, not inferring that you have rocks, etc.
Common sense should say that we are facing unprecedented territory here (now only talking economic)!!!! Boats are highly discretionary (heard that somewhere before ), and are usually purchased with "extra" money. Costs associated with boats will be ongoing, such as moorage, insurance, maintenance and repair. They are likely to become a source of relatively large amounts of outgoing funds in a time when lots of people are looking to "stem the leaks" financially (especially if financed) and are trying to "recover" whatever that will look like. So, I would strongly suggest that there will be a large number of boats available, at what might turn out to be a greatly reduced price than they were a few months ago. This is not likely to happen in the short term (next couple of months), but it probably will in the middle to longer term. If you are putting an offer in on a boat soon, I would suggest offering substantially lower than asking, otherwise, wait for while and see how this all pans out.
I sure hope I am wrong, ..... but I don't think I will be (unfortunately).

 

[Mark P]

My view is that these past few months we've been in a bear market, and generally, recessions follow bear markets. With 3.2 million people filing unemployment this past week (based on CNBC, the highest ever in one week), we may be heading into a recession. Probably short - my guess is similar to 1981-82 (very deep but a very short recession). Even with the stimulus, that's not enough to replace a typical paycheck - and more layoffs coming. I believe new boat pricing will go down even more than used boats - some companies built spec boats in the recent go-go days and now are sitting on them. Again, just sitting here rambling, so none of this may make sense, just 64 years or seeing this stuff.