New boat sales falling...

[Ang]

Just watched a CNBC Television Youtube video entitled "Boat Stocks sinking could be a warning sign for high-end consumers, warns Larry McDonald".

So, is demand falling off, or just a brief pause?

 

[Simi 60]

Rooster to Feather duster time is well overdue

 

[Mambo42]

I am getting a message that the video is unavailable.

 

[Simi 60]

I am getting a message that the video is unavailable.

As did I
If you run a VPN change to a US location and it should work.

Or paste the link into...
https://hide.me/en/proxy

 

[O C Diver]

I watched the video and saw a buzz word salad. Clearly no substance, no in depth analysis, and clearly no expertise on whether demand is down or costs are up.

Ted

 

[Mambo42]

As did I
If you run a VPN change to a US location and it should work.

Or paste the link into...
https://hide.me/en/proxy

Thanks, managed to see the video. Interesting discussion. After listening to this interview I do have some questions however.
What are the current boat production numbers compared to those of pre-covid ? What are the used boat sales numbers and what is the development of the average price of a boat over the last couple of years ?

During covid also in Europe sales of boats were up (same as campers) which resulted in an enormous price hike of used campers. Now that covid is over, the world has returned to normal and people dare to travel again the used camper market is cooling down again. Of course the high fuel prices don't help that much either.
As for boating in the Med, it is possible to buy a boat, but finding a marina where you can park your boat............that is a bit of a problem. And the marinas that are available have been raising their prices with 40 to 50 % over the last 2 years. As a result many boats are being offered for sale by people who hardly use their boats.
Don't know if the same is going on in the US, but this is what I see on this side of the pond.

 

[mvweebles]

Stock analysis from last month explains the bearish perspective on boating industry. Note, publicly listed companies are primarily smaller boat interests so not necessary applicable to TF's typical boat.

https://www.marketwatch.com/story/b...ter-analysts-slash-ratings-targets-2019-07-22

“The reason for more cautious view on the space is fairly straightforward--namely the persistent softness in demand for new power boats within the U.S. market,” Altobello wrote in a note to clients. “This was punctuated by the double-digit decline in registrations in June which was reported on Friday, with registrations down [about] 14% for the month and [about] 6% year to date​

 

[RT Firefly]

Greetings,
"...high-end consumers..."?

 

[Blissboat]

The host clearly thinks that declining new boat sales are a signal of some kind. The question he asked (twice) was, are boats their own "thing," or are they a canary in the economic coal mine? Neither guest was able to answer.

Boating was formerly a mass consumer market that meant something to the larger economy. But recently, I think boats have become more of their own thing. New boat sales may be down, but the reasons may include the increasingly unfriendly logistics of boat ownership. Someone with the cash or credit to buy a new boat asks a few questions first, like where they'll keep it (if it requires a wet slip), where and how they'll tow and launch it (if it's a trailerable), and in Florida, how they'll find / pay for insurance.

There is one economic sector of boating that seem gold-plated so far, and that's marinas. Finding a site where you can build a new one in strong metropolitan market is super tough and costly. As long as new ones are hard to create, existing marinas keep gaining value. Take one guess what that means for boat owners.

 

[rslifkin]

There is one economic sector of boating that seem gold-plated so far, and that's marinas. Finding a site where you can build a new one in strong metropolitan market is super tough and costly. As long as new ones are hard to create, existing marinas keep gaining value. Take one guess what that means for boat owners.

Only up to a point. If boating demand drops off a bit due to other factors and marinas can't reliably stay close to full, then that value changes a bit.

 

[RT Firefly]

Greetings,
"...marinas can't reliably stay close to full..." Then the marina owners either sell out to condo developers or marina corporations.

 

[rslifkin]

Greetings,
"...marinas can't reliably stay close to full..." Then the marina owners either sell out to condo developers or marina corporations.

Sometimes, yes. It all varies based on the area, how valuable the land is, who owns the marina, and how full they have to be to stay profitable.

 

[kthoennes]

I don' t know, seems highly unlikely to me any marina is going to take a broader view and defer one penny of profit maximization because it may chill the trends in boat ownership long term. Marinas are generally going to crank up prices as high as they can for as long as they can until they start seeing empty slips. And even then, if they can still charge very high prices for say 90% capacity -- well, depends on the numbers and the local market of course, but the low margin/high-volume business model (like Walmart) is never adopted by marinas.

I've gone back and forth on this whole topic -- more boats on the market lately, boat owners getting out, but then my boat would likely sell for more now than what we paid years ago (reverse depreciation, who would ever think that would happen to boats). I still can't get anyone to do service work, still can't get anyone local to do canvas work, either at all or without a six month wait. And long term -- we've discussed this before too, this microcosm of people on TF who know boat mechanics and electrical so well, I keep thinking we're a vanishing breed, where are marinas going to get service people 10, 20 years from now? I don't know.

 

[psneeld]

I don' t know, seems highly unlikely to me any marina is going to take a broader view and defer one penny of profit maximization because it may chill the trends in boat ownership long term. Marinas are generally going to crank up prices as high as they can for as long as they can until they start seeing empty slips. And even then, if they can still charge very high prices for say 90% capacity -- well, depends on the numbers and the local market of course, but the low margin/high-volume business model (like Walmart) is never adopted by marinas.

I've gone back and forth on this whole topic -- more boats on the market lately, boat owners getting out, but then my boat would likely sell for more now than what we paid years ago (reverse depreciation, who would ever think that would happen to boats). I still can't get anyone to do service work, still can't get anyone local to do canvas work, either at all or without a six month wait. And long term -- we've discussed this before too, this microcosm of people on TF who know boat mechanics and electrical so well, I keep thinking we're a vanishing breed, where are marinas going to get service people 10, 20 years from now? I don't know.

That was a problem 24 years ago when I started in the Marine Trades after the USCG.

Probably why there is an extreme shortage now.

Not sure but more and more I hear that US colleges are in a failed state as are the graduates.... many smart, college educated people I know are recommending youth go into the trades because of the deficit.

I can see why...my one son with 2 days of community college with general IT experience earned 3X more than my son with a Doctorate in Physical Therapy last year.

 

[Mambo42]

There is one economic sector of boating that seem gold-plated so far, and that's marinas. Finding a site where you can build a new one in strong metropolitan market is super tough and costly. As long as new ones are hard to create, existing marinas keep gaining value. Take one guess what that means for boat owners.

I am currently in a marina (on the dry) which was built in 2009. It was meant to be for super yachts, but in the time I have been here (over 2 months) I must say that half the slips for super yachts are empty and the majority of the other slips are in use by small boats (under 20'). This marina cost 50 million euro to build, so the only money maker here is the boat yard. For the rest the marina is losing money.
Spoke with quite a few people and a significant number of them stated they are now selling their boats. They figured that the high prices of the marina, the maintenance, the insurance do not outweigh the positive side of owning a boat. In other words, they have had enough.
So I don't believe that marinas can keep raising their prices without limits. For every owner there is a time when he (or she) starts asking the question: 'why do I keep owning this boat ?'
Even the ones who have multi million dollar boats will start asking that question and for a very simple reason. They did not become rich by dumping money overboard.

I have seen other marinas in the Med that are almost completely empty and as a result of that those marinas have started dropping their prices for winter berthing.
Perhaps this trend will also take hold in the US one day.

 

[Mambo42]

And long term -- we've discussed this before too, this microcosm of people on TF who know boat mechanics and electrical so well, I keep thinking we're a vanishing breed, where are marinas going to get service people 10, 20 years from now? I don't know.

I have been asking myself the same question these last couple of weeks, but then I came to the realisation that I may as well do no maintenance than have it done by amateurs ?
In the yard where I am now the majority of the workers have no formal education at all. They are learning on the job and their bosses charge me a Western European hourly fee eventhough these workers have zero knowledge or experience.
I came here with a small leakage on the depth meter, company came in to make the repair, charged a nice sum or money, boat goes into the water and guess what ? Leaks even harder, so haul out again (1100 USD) and in the end I sent all the workers away, did it myself.
Same is for the steering pumps. Small job which was turned into a 12.000 USD damage by one company through sheer incompetence of the workers.

So what am I supposed to do now ? I have epoxy work that needs to be done on the port deck, but should I trust anyone with that ? Why would I pay 30.000 USD to find out they messed it up ?
In the mean time my stance towards maintenance companies has become a lot tougher. Every company that agrees to work on my boat will have to sign a contract in which is clearly stated they will pay for any damage they cause and that is without any delay or need to go to a court. Also they will pay me the berthing fees for every day they are late. If they tell me they will be finished on the 10th then every day after that is on their tab, I am not paying that anymore, basta with that.

Knowing that Dutch ship building is top level I have now come to the point where I am willing to fly in mechanics from the Netherlands to repair my boat in Greece, Croatia or Montenegro. In the end that is cheaper than having amateurs ruin my boat. Plus, if I can do it myself.........I will do so. But, as we all know, we get older, are not so flexible anymore, so crawling in the ER is more or less a thing of the past. I can do it, but then I need 3 days to recover

 

[kthoennes]

My father lives in Stuart, FL, one of the big boating centers of the US. I've talked with him repeatedly about trying to find somebody even halfway competent to fly to South Dakota for a few days to knock out even a portion of my 42 item to-do list. I'd pay plane fare, hotel, drive him back and forth to Yankton from the airport, and pay his daily charge of course. Big problem though, there are no marine stores for hundreds of miles, so if he needed any parts at all, it's all mail order. That may kill the arrangement right there. Heck, I'd even fly my dad up and pay him but he just got a new knee. Lack of service techs, or astronomical service charges, is not going to encourage boat ownership either long term. Especially when:

 

[tiltrider1]

I follow a very small segment of the boat market. This means my observations won’t apply to all boats nor all parts of the US. For instance, I don’t track boat sales over a million dollars so what I see could easily be irrelevant to the Nordhaven or Fleming crowd.

What I am seeing is some lowering of prices and some increase in inventory. It is now the end of summer so some lowering of prices is natural for this time of year. I usually don’t see increases in inventory this time of year.

Most of the price lowering is on boats that have been on the market for more than 6 months. I have noticed that the increase in inventory is nicer older boats, not junk boats. I am not seeing any newer boats (less than 10 years), these appear to sell before ever being listed.

While I see some softening in prices, we are nowhere near what prices were before COVID and note the fleet on average is 3 years older. In other words prices are still high just not as high.

So what is going to happen. Everyone is saying that boat prices are going to fall. They are also saying a recession is coming. It’s only logical to assume that if a recession really does show up that boat prices and vacation home prices will tumble. Will a recession really show and how hard will it be or will the market continue to climb?

In other words, I don’t have a clue what will happen. I believe that the number of people getting into boating has dropped but the number of people leaving has not increased. I believe we will see the normal seasonal fluctuations but nothing dramatic in either direction.

It’s going to take something more unexpected than a 10% drop in the market or a few layoffs to make boat prices drop hard. Not saying it can’t happen. Just saying there is no sure direction at this time.

 

[PM]

I can't speak to the new boat issue but I can attest that the used boat market is tough.
Some say there is a shortage of money, people are struggling just to buy gas and groceries. Others say the cost of ownership is to high.

I think it is a combination of both factors.

pete

 

[sunchaser]

Pete
Well kept “branded” vessels less than two decades old seem to be moving quickly according to my broker contacts. Then high interest rates limits the buyer pool thus favoring the knowledgeable cash buyer.

But FL hurricane country has cautious buyers and for good reason with sky high insurance premiums, and damaged marinas. Then comes the shortage of marine skilled trades people.

My gauge is are Fleming, Selenes and Nordhavns moving quickly? It seems they are.

 

[mvweebles]

Pete

Well kept “branded” vessels less than two decades old seem to be moving quickly according to my broker contacts. Then high interest rates limits the buyer pool thus favoring the knowledgeable cash buyer.



But FL hurricane country has cautious buyers and for good reason with sky high insurance premiums, and damaged marinas. Then comes the shortage of marine skilled trades people.



My gauge is are Fleming, Selenes and Nordhavns moving quickly? It seems they are.

I think you have touched on an interesting wrinkle in the resale market - boats that are still being built and therefore available new. A buyer has the means to consider a new build but will consider a decent quality used boat with attendant savings in price or wait time (or both). That said, my hunch is a 10-year old boat may be a stretch for an erstwhile new boat buyer.

The piece I don't understand is where these boats are being berthed. Best I can tell, boats are being built much, much faster than slips. Sure seems like a squeeze. I guess that explains why Safe Harbor is buying marinas. Not a bad business model as tenants are captive with little pricing power. Similar dynamic in the mobile home park where well-heeled investors are buying parks knowing the trailers are far from mobile and can therefore raise rents.

Peter

 

[MYTraveler]

There is one economic sector of boating that seem gold-plated so far, and that's marinas. Finding a site where you can build a new one in strong metropolitan market is super tough and costly. As long as new ones are hard to create, existing marinas keep gaining value.

Consumer preferences are changing rapidly. I wouldn't bet on demand for boats, of any size or value, to be as strong in 20 years as it is today. Look what happened to golf. And yacht clubs. And hunting and fishing. Kids today aren't even anxious to drive a car. Or go on dates.

 

[SteveK]

My father lives in Stuart, FL, one of the big boating centers of the US. I've talked with him repeatedly about trying to find somebody even halfway competent to fly to South Dakota for a few days to knock out even a portion of my 42 item to-do list. I'd pay plane fare, hotel, drive him back and forth to Yankton from the airport, and pay his daily charge of course. Big problem though, there are no marine stores for hundreds of miles, so if he needed any parts at all, it's all mail order. That may kill the arrangement right there. Heck, I'd even fly my dad up and pay him but he just got a new knee. Lack of service techs, or astronomical service charges, is not going to encourage boat ownership either long term. Especially when:View attachment 141888

Have you explored trucking/taking the boat to a boatyard that can do the work?

 

[SteveK]

As for the new boat sales falling, didn't the flurry of new boat sales occur when the economy is bursting, incomes are high and disposable cash is available. Heading into a recession now is not going to encourage that.
More and more on TF are getting out of boating. Is that a trend across all boat owners?

 

[LovetoBoat]

I keep hearing we are heading for a Recession - at least twice in this thread. The definition of a recession prior to the media and the current administration changing it - was two quarters of negative GDP. We had that already - but we changed the way we count recession now...


Keep changing the definition and we will never hit a recession... lol

 

[kthoennes]

Have you explored trucking/taking the boat to a boatyard that can do the work?

40 feet loa and 18 feet high, keel to radar arch, not going anywhere without dismantling. And the closest bigger boatyard is Minnneapolis, 300 miles away.

 

[SteveK]

40 feet loa and 18 feet high, keel to radar arch, not going anywhere without dismantling. And the closest bigger boatyard is Minnneapolis, 300 miles away.

Expected this answer, thanks. Best wishes to find a tech to work on it.

 

[socalrider]

Talked to a broker here in SD who said that the market is definitely softening from his perspective; slips are very difficult to find and expensive, same with financing & insurance. I also see a huge shortage of marine service professionals; I do everything myself except diving and bottom paint, but most don't have the skills and/or time.

It'll be interesting to watch over the next year or so.

We're contemplating upgrading to a larger trawler or possibly a catamaran. Still not a ton of inventory but the boats that I've been watching have not been selling & many have had price cuts.

 

[psneeld]

I keep hearing we are heading for a Recession - at least twice in this thread. The definition of a recession prior to the media and the current administration changing it - was two quarters of negative GDP. We had that already - but we changed the way we count recession now...


Keep changing the definition and we will never hit a recession... lol

Bad idea discussing politics here....

Wouldn't take too much away from TF too seriously.

There are nuggets of gold here but like panning for gold...it takes effort to find them.

 

[socalrider]

Bad idea discussing politics here....

Wouldn't take too much away from TF too seriously.

There are nuggets of gold here but like panning for gold...it takes effort to find them.

Yeah... if you think a recession's coming (or secretly has already arrived), keep it to yourself, short the S&P & buy a nice big yacht for cheap in 18 months with the proceeds.