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Owl
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There were some phenomenal deals on superyachts to be had in 2009 -- if you had the ready cash. Nobody was writing loans.
 

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While I predict a lull, the cruising and marine industries are not going away. This is unlikley to become the great depression. Most, but not all, of the economy will recover shortly after imposed restrictions are lifted. If cruising is the way one plans to spend a near term retirement and one has the liquid funds, values to the buyer might be the silver lining to this mess. Fear or market losses are going to keep a slug of buyers on the sidelines, depressing values. I think.

I'm keeping my eye on the horizon. However, I'm also glad that my boat is fully paid for and perfectly acceptable to spend my remaining days aboard.
 

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It just feels wrong to talk about beating prices down right now. I can't do it. Focus on something else.

Some of us are secure. Many are not.
 

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I wouldn't wish this on anyone, but I don't see the inquiry as beating down prices, any more than recognizing the stock market is down. It's just a fact of supply and demand now.

In fact, the brokers of boats I've kept in touch with have been quite aggressive in their pitch that the owners they represent would be happy to negotiate down. They expect to get it back on the buy side.
 

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I wouldn't wish this on anyone, but I don't see the inquiry as beating down prices, any more than recognizing the stock market is down. It's just a fact of supply and demand now.

In fact, the brokers of boats I've kept in touch with have been quite aggressive in their pitch that the owners they represent would be happy to negotiate down. They expect to get it back on the buy side.
It is very sad what has happened to the economy, but nobody caused it.

I hope to buy a boat, and as I am not wealthy, I will feel fortunate if prices come down.

And I think it will happen. My wife and I are fortunate to both be employed in health related fields (not direct care givers, but support jobs). We will not be likely to lose our jobs. Sadly, many people will. This will mean two sad facts: 1) Some people may have to unload their boats to save money, and; 2) Some people who planned to buy boats this year, may have lost their jobs, or suffered a decline in their business, and will be working months or years to pay of debts and build back savings.

As Minnewaska said, this may increase the supply of available used boats, and my reduce the demand, by reducing the number of buyers.

I feel sad for people who have suffered from this crisis. I for one, will have to delay my retirement plans, and work longer, because I've lost some of my retirement savings due to mutual funds accounts that have tanked (I didn't switch funds over soon enough).

This means I'll have less funds to pay toward a boat, and the need for a larger loan.


But I'm fortunate in that I will probably keep my job.
 

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It only took a handful of years to fully recover market losses, after the great recession. This time, there is no fundamental economic problem, it's dominantly self inflicted shutdowns. Perhaps necessary, but still self inflicted and will be self lifted.

The shutdowns themselves are going to leave scar tissue on the economy, as huge amounts of debt from relief efforts will need to be repaid. Many will not have jobs to return to, as small businesses close. Still, one would think it will recover faster than a real bubble bursting.

If this scenario were true, depressed boat prices won't last forever. I'd buy on the dip. And might.
 

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I think Minnewaska's comments are probably pretty close to what will take place. The economy was sound before this blow, so should recover pretty quickly once the virus gets under control. Wuhan in China is now showing no new cases so that is an indication of the time frame. For someone moving up in boat size, you will lose on selling your current boat, but save on buying the new one. Those selling to get out of owning a boat are going to take a hit.
 

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What Minni and Jim wrote.

I don't see why there would not be a pretty rapid economic return... with a sort of pent up demand to "consume". I think formally successful restaurants, bars, entertainment venues will pop right back. But the cost of being idle will require some sort of assist for many businesses. Many "overheads" continue whether a business is operating or not... utilities, rent... insurance etc... and paying those overheads usually comes from operating revenues.

Restaffing could be an issue... because staff needs to be trained. So hopefully the skilled trained staff returns and normalcy resumes.

+++++

My hunch is that this sort of "crisis" may drive people away from expensive "hobbies" like boating and make them more conservative in where they park their money... Boats are not a very liquid asset ;-). So I predict more depressed used prices for the foreseeable future in the boat market. Buyer's market and that switching to a new boat a problem, whereas a good time for first time buyers.

:ship-captain:

:cut_out_animated_em
 

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People won’t be going back to their former levels of consumption and activities, because they’re now sitting at home developing new habits along with strong feelings of paranoia; hundreds of thousands of small businesses will fail because they won’t be able to go on for months without customers or employees while sustaining monthly overheads. I saw many new listings of large Oysters coming onto the market over the past month.

There’s no way to put a happy face on all of this...

Boats of all kinds will be cheaper due to even fewer buyers. I’d wait to purchase a boat and spend time now doing homework. There’s really no hurry to buy, it will probably be months before it can be surveyed and possibly even next year before the boat can be used.
 

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If one reads my post carefully, I did not suggest the economy was going to fully bounce back right away. In fact, that's mathematically impossible. I said the last crisis only took a handful of years to recover and this one should take somewhat less. We'll pull up from the bottom pretty quickly, but will not be back to normal for some time.

The debt taken on to provide relief and the debt that is yet to be taken on to fill budget gaps at the State level will be staggering. All this money does not exist, I don't care what form of economy, government or party one prefers. Wait until you see the the tab everyone will get for it. That has to dampen previous economic highs. Further, many businesses have already closed and more will, despite the relief. Job will be lost permanently. They'll be rebuilt over time.

The biggest short term issues is going to be fear. Will this happen again in the Fall? Are we ever safe from this happening routinely? Will they come up with a better response than to impose the destruction of so many people's life savings, in order to prevent a run on our cities' hospitals? This was handled in panic mode, not planned intelligent mode. That will weigh on demand, for the time being and lower prices. Probably on your house too. But it will rebound over the years to come.

Any sane person would favor human life over money. However, an economy is not money, it's the collective method society uses to create goods and services. They don't appear out of thin air. Our economy will have scar tissue.
 

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BEWARE - this my turn into a rambling philosophical rant

It’s not about what something Costs, it’s about something’s VALUE.

Stock prices do not represent value, they represent a guess on you can sell it for.

So if you had $1,000,000 in stock on Jan 1 but now have $500,000, what has changed in the world? Other than perception of value.

But if you had a house, clear paid, on Jan 1 you would now still have that house. It’s value to you has not decreased because it still provides shelter.

The boat is a bit more complicated, because it can be but a play toy and it’s value is simply as amusement, and as such is of limited value. Or it can be that the boat is your principal home, and of great value. Or the boat represents you life long dream to escape the rat race, and then it is invaluable.

So back to the question, should you buy? The answer is that you need to clarify your values, why are you buying, of what value is it to you?

Suppose you were 58, had $2 million in stocks Jan 1, that has now decreased to only $1 million. Bachelor, no kids, no next of kin. Your life’s desire is to spend your days sailing the Caribbean and other far off places. Your Dr. just told you you have 36 months of health ahead of you, then you will croak in short order.

Do you sit around waiting for stocks to rebound? Do you wait for boat prices to tank? Do you keep working?

I think not, you take what you have and convert it into something you truly value; time and freedom to live your dream. It might be a bust, might not live up to expectations, or you may love it, irrelevant. The value is in the experience. The value of the boat is to provide the experience.

Same thing with a car. If a $25,000 car takes you back and forth why spend $50,00. Is social status really that important to you? If so go ahead, it’s your money.
 

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It's hard to prognosticate the future, but I feel that anyone who is thinking about selling or buying a boat this year, needs to do their best and start thinking out the process. And, I believe they need to start getting their ducks in a row, for a possible sale or purchase.

Optimistically, I think we still have at least another 2 - 3 months before we return to anything that starts looks like 'normal'. Even if boat prices dropped overnight, there is no way that I would even think about travelling and looking at boats until this Summer. Speaking about prices, it astounds me the way that production sailboats hold their value compared to production powerboats. Looking at the NADA guides, and I think this has value when looking at production boats as there is enough sale history on these used boats, I have found the following on some production boats that I am interested in:

sail:
- 2005 Hunter 33, base price $89,100 - average retail $49,100 > this is 45% depreciation over the last 15 years
- 2005 Hunter 36, base price $124,290 - average retail $67,800 > this is 46% depreciation over the last 15 years

power:
- 2007 Sea Ray Sundancer 310, base price $169,119 - average retail $67,750 > 60% depreciation over the last 13 years
- 2004 Carver Mariner 36, base price $276,407 - average retail $84,500 > 70% depreciation over the last 15 years

Jim
 

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I would definitely think this is a great time to buy as long as the money is not coming out of the stockmarket.

Last week the Dow had the biggest Up Week for 82 years! Next week looks like it will settle a bit. But on the whole I think it will be up a long way towards what it was Jan 1st by December 1st.

I clearly remember the 2008 GFC because I was sailing across the Pacific with about 100 other cruising boats from teh EU and the USA. Lots and lots of folks were living off dividends of Stocks.

We were at sea for 16 days whilst the crash occurred. When we arrived we never saw *any* of those 100 boats again.
Vanished! Disappeared! Everyone. Sold up and gone home? I guess so.
6 months later when we were exiting Australia to go through Asia there was another 100 boats... but different boats, different people. And we were all on the threads of our undies.

So planning during this covid crisis is difficult. A great time to buy if you have the cash (but who has that amount actually in cash??); bad time to sell; terrible time to take money out of the stock market.
Perhaps an idea would be to put the money into the stock market for 3 or 4 months... then pull it and buy a boat. (tax implications etc).

Again, cash is king :|

Only thing thats good to know: everyone who says they got out at the top of the market... are probably lying their teeth off. And all the people who stayed in have white knuckles and darting eyes. Those that sold in between are in deep do-do.


Mark
 

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, it astounds me the way that production sailboats hold their value compared to production powerboats.

sail:
- 2005 Hunter 33, base price $89,100 - average retail $49,100 > this is 45% depreciation over the last 15 years
- 2005 Hunter 36, base price $124,290 - average retail $67,800 > this is 46% depreciation over the last 15 years

power:
- 2007 Sea Ray Sundancer 310, base price $169,119 - average retail $67,750 > 60% depreciation over the last 13 years
- 2004 Carver Mariner 36, base price $276,407 - average retail $84,500 > 70% depreciation over the last 15 years

Jim

Why would this be?

Power boats not made as well?
sail boat people maintain them better??
Production cosst of power boats dropping faster than sailing boats?

Is it the same with boats of similar new base prices?
 

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.....Same thing with a car. If a $25,000 car takes you back and forth why spend $50,00. Is social status really that important to you? If so go ahead, it’s your money.....
Social status purchases are easily criticized. I criticize too. However, they make up a part of demand that creates viable production and price support. Say they're only 10% of purchases, that could be the difference to whether the product is made at all. Say the big flashy boat isn't made anymore, the entire company may go under and the modest one isn't made either.

On the other hand, there are people who get joy out of higher quality or durability. When it's nothing but a designer label, it's not defensible. It's showy, unless the designer product is intrinsically superior. However, some labels and higher prices are indeed superior products, with higher value.
 

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One thing I haven't seen mentioned here is how one would go about purchasing a boat right now.

The world is currently awash in a deadly pandemic, the like of which has never been seen by anyone alive. Would anyone seriously consider going out, risking that or risking spreading it, merely to try to get a cheaper deal on a new toy? Even if you are irresponsible enough to do it, think of all the other people involved in such a deal - the owner, broker, surveyor, boatyard staff etc. etc.

When it's over there will be deals. Until then, don't be ridiculous.
 

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For sure, it would difficult just to administratively clear or transfer title (many gov offices shut down too), so nothing is happening until social restrictions are lifted. No way to properly do a sea trial and remain socially distanced right now either. I read the entire point of the post to be in the aftermath of what’s to come.
 

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My broker has suggested a downturn in the economy for a year. We invested in expectation of that. He sees other indications of a slower recovery maybe 3 years till it bounces back. Not sure he is right but he has done really well for my family for 30+ years, so I roll my dice based on his advice.

Right now I am sheltering in place and considering boat shopping next summer.
 
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