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  #1  
Old 02-11-2001
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BUYING OLDER BOATS & MARKET TIMING

There is a wealth of knowledge out there about older (pre-90 lets say) cruising boats.
And being a researcher by trade, I''m really
feeling the desire to conduct a systematic
survey and share the results. Is that a good
idea?

In addition to that, many of the posting have
noted market timing, general economic trends,
Some noted that its good for owners of classics because they are actually increasing
in value. That''s good for the owners, not the
buyers, right? Let''s review the videotapes
and ask you folks to drag out the crystal balls...assume we want safe hulls, rigs, etc.and that 90% will not venture to deep
blue water.

What well found boats in the 30-40ft class are actually overpriced right now?
Which ones are still bargains? When will the
price winds change in the short term? Why?

Damn, I''m sounding like an editor too. But,
I see all this collective wisdom and experience out there and would like to turn it to the benefit of the buyers. (Which will
include me in a year or so).
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Old 02-11-2001
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BUYING OLDER BOATS & MARKET TIMING

I have the two vol set, "Practical Boat Buying" and find it very valuable. Most of the reviews contain price graphs which show an interesting trend. Almost all older boats dropped in price until 1992, then there was a sharp increase. My inference (also has a researcher by trade) is that this corresponded to the increase in the market leading to many people''s feeling of greater wealth.

Based on my personal search for my next boat and some observations in the market, I do not think we can predict the future from the past.

I think that the majority of boat buyers will not touch 20 yo boats. Thus, someone buying an 18 yo boat will be shocked at what they have to sell it for in 3-4 yrs. Search engines on all the boat listing sites, such as Yachtworld, make it very easy to sort out the exact age of a boat you want to search for. My bet is that most boat buyers today put the cut-off at 1980 or 1982. I know I do.

And I do that because I have spent many weekends looking at 1980 or older vintage boats only to find that they are high priced and would require quite of bit more cash to put in the shape I would like. You are then left with a very expensive old boat that may perhaps have no next buyer. That is not to say that there are not truly GREAT older classics... but they are the exception... and I would be willing to venture that if people''s taste in boats changes, classics might no longer hold their value.

Case in point: a 1981 Tartan 37, centerboard. Tartan''s are very good boats and the 37 has an excellent reputation. Most on the market now are listed in the low $80''s ($20-30k more than similar sized boats of the same vintage). They were selling between 45-60k, just a few yrs ago. They are of course a very good boat ... BUT.. they have smaller interiors by todays standards and they are centerboards. I predict that these boats will plummet in value in 3 yrs because 1) they will be past the 20 yr mark, 2) their interiors will become unacceptable to many buyers and 3) fewer buyers will want centerboards. Same for the Bristol 35.5. I am not knocking the boat, just making a prediction based on this discussion.
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Old 02-11-2001
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BUYING OLDER BOATS & MARKET TIMING

These are not cut and dry questions. I watch the used boat market quite closely as I am often called upon to help people find their dream boats. While some boats seem to be holding pretty level values or going up in value, others have dropped quite precipitously. While there are some trends they are not absolute and they really can''t be counted on.

For example,

The general rule is that non-competive race boats with minimal interiors have lost a lot of resale and can be bought cheaply. That would be true of boats like the Olsen 30, Old One-Tonners, Farr 37''s, J-36''s, J-27''s that sort of thing. Old race boats with decent interiors have gone up in value. So boats like the S-2 9.1, Laser 28''s, Express 37''s and J-35''s with the operable ports and cruisier interior package have actually hit a low and seem to be coming up in value.

1980''s middle of the road coastal cruising boats like Pearsons, Odays, Tartans, Sabres, C&C''s seemed to have held their value pretty well but their prices seem to be separating. As they reach 20 years of age they are taking more to keep them up. Standing and running rigging, electronics, deck hardware, sails, engines, interiors, and the like are in need of major repairs or replacement. Owners who have done these major overhauls are asking very high prices (the brokers tell me that they are not actually getting them but they are getting higher prices than anyone would have expected a few years back.) The boats without this kind of upgrades are plumeting in value as these cost of doing this work far exceeds the value of the boat sometimes. Still people see the higher asking prices and think that these boats have actually gone up in sales price for all of that model.

Similarly, 15-20 year old so-called blue water boats seemed to be holding their value for a while but I noticed that similarly the earlier models seemed to plummeted. There is noting more expensive to put together than an old blue water boat because all of its parts are so heavy duty and expensive. Where models have had minimal changes, refurbished boats can demand pretty high prices because compared to new boats they are still cheap. BUT older unrefurbished blue-water boats can be bought quite cheaply and then som poor S.O.B. has to try to put these things back together.

Boats by the Big Three seem to plummet quite quickly after they are new. Typically they sell for thier "base price" which ignores the additional 10% to 15% that covers all of the options, add, ons and spares that get added to the base price. Oddly enough, Good clean versions of these common boats can still demand 50% more than the more clapped out versions and boats like the Beneteau First series can often sell for their purchace price 12 years later.

So like I say, there are not hard and fast rules.

Jeff
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Old 02-12-2001
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BUYING OLDER BOATS & MARKET TIMING

John & Jeff, thanks so much for those well
considered responses. Your remarks, naturally
prompt other questions/issues.

Do the seasoned sailors pay the fair prices
and new to the sport/lifestyle higher prices?
Or is it really an issue of how much money you have?

People, self included for a while, often feel
that Practical Sailor reviewers were
unbiased and the mass press, Cruising World,
Sail, etc. would not be honest because of
their boat manufacturing advertisers. How
much do these reviews massage the market?

Parts, insurance, etc. I recently talked to
a marine loan broker about buying older boats. The eyebrows started to twitch when I
mentioned a few boats 20 years+. The repair
BB of SailNet often has messages regarding
the possible necessity to custom make parts.

When you folks say big 3, I assume you mean
Beneteau, Catalina, and Hunter. I''ve heard
C & H criticized for cheap manufacturing
and that the used Bs are overpriced. FEW
articles on buying cruisers list any Bs or Hs
on their A list.

(Aside) Ironically, Beneteau marketed an
Evasion model (almost a motorsailor) which
bombed in the US but its layout would work
quite nicely for aging boomers.



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BUYING OLDER BOATS & MARKET TIMING

"Do the seasoned sailors pay the fair prices
and new to the sport/lifestyle higher prices?"

Not necessarily. Like most things in sailing ist a matter of effort in equates to benefits out. When I am buying a boat or helping someone buy a boat, I begin by identifying as large a number of boats that could work possibly work. I rate them from ideal, to modifiable to work, to really not working at all. I begin to track these boats for years before I actually have to buy one. I keep a little data base of these boats that have come on the market and been sold. I rate them on sails, condition and equipment as best that I can. I try to get to know owners and get aboard as many of the particular boat in question so I can learn of common problems and issues. After a while I can quickly tell what a fair price would be for each model and can quickly set a fair purchase price for the specific boat in question.

I am also good at doing a pre-survvey myself that usually identifies the majority of the problems before the real survey. This helps me decide what a fair price really is and also negotiate the final price with the owner by being able to show him my database and the particular problems.


" Or is it really an issue of how much money you have?"

Its partially a matter of trading money for time and effort. Anyone can buy a boat very quickly if they don''t mind pay top dollar.To buy the right boat at the right price takes time and care. It also may mean some flexibility. For example, I bought my Laser 28 for about 20% lower than its market value on the Chesapeake where there was an active one-design fleet. On LIS there was no fleet and they had a very unfavorable PHRF rating so they were being dumped.

" People, self included for a while, often feel that Practical Sailor reviewers were unbiased and the mass press, Cruising World, Sail, etc. would not be honest because of their boat manufacturing advertisers. How
much do these reviews massage the market?"

Actually I have far less respect for the quality of the Prctical Sailor reviews than I do for the reviewers and approach to reviews in magazines like Sail, Sailing World, Cruising World, Spinsheet, or Sailing. Practical Sailor tends to have certain editorial bias''s that clearly slant their reviews to the point that I consider them worse than useless. I find that the Magazines above tend to give much better reviews if you learn to read between the lines (such as "points well for a heavy cruising boat" which translates to, does not point all that well but is OK in its class. OR "the fit and finish reflects the value pricing on this boat" which means its a cheap boat with mediocre workmanship.) I think Bob Perry''s reviews in Sailing and Jack Horner''s Classic Plastic reviews in Spinsheet are the best in terms of depth and lack of editorial policy clouding the view point. I also like Sail Magazine''s reviews but they tend to be too brief.

"Parts, insurance, etc. I recently talked to a marine loan broker about buying older boats. The eyebrows started to twitch when I
mentioned a few boats 20 years+. The repair
BB of SailNet often has messages regarding
the possible necessity to custom make parts."

Custom parts are no big deal if you are at all engineering oriented and have reasonable skills. The big issue with 20 plus year old boats is the need to replace or do major repairs and upgrades to the sails, running and standing rigging, engines, deck hardware, electronics, and interior appointments, aesthetics, deck coring and hull flex cracks, etc. Any combination of this collection can quickly exceed the overall value of one of these boats in perfect shape. You can often find a totally restored version of one of these older boats for prices that are a real bargain even if they are well above the percieved market value of the boat. Still, even though the guy who did the restoration is going to loose a lot of his investment, if you buy one of these already restored boat at top dollar, it will too will decrease in price being dragged dowwn by the dropping price of the rest of the deteriorating fleet as it ages.

" When you folks say big 3, I assume you mean
Beneteau, Catalina, and Hunter. I''ve heard
C & H criticized for cheap manufacturing
and that the used Bs are overpriced. FEW
articles on buying cruisers list any Bs or Hs on their A list. (Aside) Ironically, Beneteau marketed an Evasion model (almost a motorsailor) which bombed in the US but its layout would work quite nicely for aging boomers."

I think that Beneteaus, Hunters and Catalinas are fine for coastal cruising and in fact many of these boats are better suited to coastal cruising than many more venerable cruising boats. My family and friends have had enough experience owning these boats that I can say that as the boats age, they are pretty cheap but they also require more maintenance. Still if you buy a ''good one'' and take care of it, they are very good values.
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BUYING OLDER BOATS & MARKET TIMING

My two cents: When I went looking for a boat in the winter ''99/spring ''00, I was shocked by the high price levels. This is in contrast to my boat hunting back in 1995/6 when the prices seemed more reasonable. That being said, I dare say that many (if not most) of the boats I was looking at are either still for sail or have been withdrawn from the market. Offered prices seem quite high but, if boats are not moving, they are, obviously, not "for real." I think that market timing is valid but is more realated to the individual motivations of the sellers and buyer in question. IE, if you find someone that needs to unload a boat, you may get a deal.
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BUYING OLDER BOATS & MARKET TIMING

I think JeffH answers the important issues well, I have benefited from his advice on other boards.

I wanted to address the Catalina/Beneteau/Hunter issue, as I think it is a future driver of the market. First, I will say that, in my personal opinion, Hunter does not belong with C and B.

I am in the market for a 36-38ft sloop, 10-15 yrs old. I started my search quite some time ago with a blank slate, being open to boats 20yrs old and older. I seriously checked out boats from Bristol''s to Hunter''s, Morgan, Ericson, Tartan, Saber, Alberg and many more. I focused on a Pearson 36 and a Tartan 37.

If you read reviews of Catalina''s in Spin Sheet, Practical Sailor and read owners reviews, you will find very favorable write ups. I went out and surveyed a 1989 Catalina 36: strong chain plates attached to major structural member, good glass work, solid glass hull (which I prefer, Jeff may differ), fit and finish very good, interior bulkheads tabbed well, no voids in the glass, top notch fittings, no leaks etc etc and easy access to everything including fuel tank, holding tank, sea cocks etc They have a nice conservative 44% ballast/disp ratio, very good rep and excellent resale value. A good value, worth the money and a boat I could go virtually anywhere with in great comfort and confidence. I think the same would be true of a Bene or C&C (I personally lump C&C with C and B, but I don''t want to start any arguements over it).

I began to think about where would I take a Pearson 36 or Tartan 37 that I would not take a C 36. My personal answer was that I probably would not cross an ocean in any of the above, and that I would take a C 36 anyplace I would take the Pearson or Tartan. In my thinking, I could not justify the extra cost of a Pearson or Tartan over the Catalina for sailing up and down the coast, limited off shore and cruising to the islands. After that, my choice becomes influenced by personal things: cost, comfort of the interior and ease of maintenance.

SO, my take on all this is that the group of boats that many people will say are higher quality may not be able to demand higher prices in the future. I believe we are at the break point now, where the market is shifting towards "value" boats. Pearson''s are nice, but a 1989 Pearson 36 asks for a 20% higher price tag than a 1989 Catalina or Bene, a similar vintage Tartan even more. I am not sure they will get those prices this year, they may, but I don''t think the higher prices will last much longer.

When it comes to true "bluewater" boats, there is a different dynamic. But that is another thread.

Just my $0.02
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