Used boat prices starting to level off or even drop?

[scross]

First, this post is meant to be about economics, not politics. So please no political comments.
Axios reported this morning after the 2nd Quarter GDP numbers came out: “On the goods side, spending on recreational goods and vehicles — a category that includes sporting equipment, for one — dropped 10% from the first three months of the year.”
Now that we, as a society, have moved past a early pandemic mentality to a live-with-it Covid mentality, is the need for activities that are all about having fun while social distancing nearing its end? Did everyone who wanted to try boating already buy their boat or at least have a new one on order?
With interest rates on boat loans climbing, fuel prices still relatively high and parts shortages seemingly everywhere, is demand for new and used boats past its peak? The market for new and used boats has always been cyclical and perhaps we are seeing the beginning signs of a swing. Just like in the housing market but not for all the same reasons.
Your thoughts?

 

[Ernie]

I agree with you, the market for boats campers and houses has really slowed. Good time for shoppers.
If any readers are considering a new r31s, for instance, I have a 2022 close to new boat, 75hrs on Volvo, still under factory warranty till January, for sale. A chance to avoid the wait for a new build and save about $100,000 from a similarly equipped
build. Registration for the Roche Harbor rendezvous in September included.

 

[mlanger]

I'm getting ready to buy and have definitely seen a slowdown in the market. Yippee! Could it be that I'm actually timing it right?

 

[croakz]

I'm getting a used R25 SC from a local boat dealer and they said June / July is pretty slow and it usually picks up in Aug. Of course, now that I have one under contract, prices will plummet. 🙂

 

[scross]

croaks,
Of course the dealer said that! I’ve never seen prices pick up at the end of the season. Best time to buy used has always been in September through December. We bought Our Journey in mid-September.
Folks who put their boats up for sale, and need them sold, are much more willing to accept a reasonable offer at the end of the season.
My observation applies to the PNW, not necessarily Florida and the Southern states.

 

[BB marine]

The gold rush is almost over. The boat manufactures are slowly getting back on track. Build dates are still out about a year but new product is slowly making its way to dealers. The new boat shortage and the used boat demand brought prices up to levels the marine industry as never seen. The same thing happened in the automotive industry, RV industry and housing Market. Parts availability, electronics, man power shortages and stimulus money influenced our economy bringing demands and prices up. Yes things are starting to level out but I believe manufactures have seen the light. There is more profit to be made when inventories are low. When there is product sitting at dealerships there is the need to move the product and room to negotiate the price. Dealers pay the interest (juice) when a product is on the lot. Manufactures order all the build supplies based on speculation of sales and build the products before they are sold. This cost money and reduces profits. When boats and Cars are built based on orders it is a win-win for both dealers and manufactures. It holds the suggested retail value to the selling price. Manufactures don't have to give incentives to dealers and dealers make better margins on each boat sold. Dealers also make more money in the service departments. They are not rigging new boats every day that they sold at reduces margins and getting paid reduced labor rates for factory warranty work that they have to wait months to get paid. The dealer service departments are working on retail service customers making full shop labor rates repairing the large amount of used product and previously owned boats and automobiles.

I may be wrong about this but I think the new product market is going to be in demand for years to come. This will help hold the value of used product. It is a domino effect. The used boat market got hit hard from the recession of 2008. The demand for new boats dropped for 3 to 4 years. 2008 to 2012 new boat manufacturing was reduced and a lot of manufactures closed the doors. This 4 year span of reduced new boat manufacturing reduced the amount of used boats that would be available in years to come. Example: If you were looking for a used boat in 2016 the market had many early 2000 vintage boats available but not that many 5 or 6 year old boats available. When looking for a used boat you will find a lot of 2004 to 2008 and then 2012 to present. There are few 2008-2009-2010-2011-2012. I believe it will be the same for 2020-2021-2022-2023 and many beyond. Manufacture will build what they sell there will be no need to over stock the market. The profits will maintain at a higher level.

My Opinion is the used boat market will be good for the foreseeable future. I think the demand for good used boats will be strong and values will hold. I do not think they will sell in a week or the values will be as unrealistic as they were in mid 2021 to mid 2022. But they will hold their value.

If you sold a boat in 2021 and purchased a different boat you bought and sold apples to apples. If you purchased a boat in 2021 first time buyer new or used you will feel some depreciation. If you sold a boat in 2021 and got out of the market you may have received a good return and sold with less depreciation then normal.It was a good time to get out if that was your goal.

Bottom line, I don't expect the boating market to stay where it was in 2020,2021 and 2022. I don't look for it to fall off the charts either. The boating market has peaks and troughs. We just went through a peak. The trough is a few years from now. If you purchased a boat in 2021 and sell it in 2025 are you going to get a good return for the purchase? Probably not. You will get what it is worth? Yes! The cost of purchasing and owning a boat should be the value you got out of using it. Forget about what happened in 2021/2022. Enjoy your boat!

 

[Submariner]

I think the rising interest rates will squeeze margins on new boats and will lower the value of some used boats. Or at least will make the sale cycle longer to find that buyer, specifically if there's a loan involved.

I bought in May 2020. At today's interest rate it would have added an extra $200/mo to my payment.