Used Boat Prices Falling

[braindamage]

 Remember, boats are like sunrises, there will always be another one. If you are patient, diligent/focused, and willing to act quickly then you will find something between now and the spring. Don’t panic this early.

that being said, I have no crystal ball as to what will be the state of the market over the next 6 months. There are too many conflicting economic indicators that haven’t happened before to know.

[The Hulk]

Industry is crashing I can confirm 😭😭

Let's hope for a soft landing but I think we all know better another 08 is upon us.. 

 

[mxmark4]

My boat goes away tomorrow. Dealer has a 22 model with 17 hours there on consignment. Tells me its a great price and boat has every single available option on it. He pulls the deal sheet for what customer paid last year and shows me his total after tax. Tells me thats the number I can have it for. Am I crazy to walk away since its the end of the season and just let it sit until the price is more to my liking. I dont feel like you typically recoup taxes on a sale of anything. I want to offer like 5k under the original purchase price and see what happens. Worst they say is no. Still have to pay for warranty transfer but boat is pristine,  and includes all his gear too since he is moving and getting out of a lifestyle he probably  didnt need to get into. 

[OtherBoatisaCessna]

1 hour ago, The Hulk said:

Industry is crashing I can confirm 😭😭

Let's hope for a soft landing but I think we all know better another 08 is upon us.. 

 

Go on…?

Edited September 21, 2022 by OtherBoatisaCessna

[TAQ44]

1 hour ago, The Hulk said:

Industry is crashing I can confirm 😭😭

Let's hope for a soft landing but I think we all know better another 08 is upon us.. 

 

This is worse than a nagging wife telling you she’s upset but won’t tell you why….. 🙄🙄🙄

End the statement with a cryptic “I can confirm” as if you have some crystal ball or something? Not disagreeing with you by any means, but cmon man. Let’s hear a bit more about this “confirmation”. 

[tjklein]

No one knows what the economy is going to do in the next 12-16 months. 10,000 variables and human behavior make it nearly impossible. That's what I can confirm!

[Steve B.]

Marks and Hulks post back to back ha. I would guess overall pricing will rebound to less inflated, but just don't see a bottom drop out. My local huge dealer is swamped with business. My used boat has great value, but up-grading with such low supply of what I'd like means waiting. Little used 23 LSV would be sweet.

Steve B.

[Pnwrider]

3 hours ago, OtherBoatisaCessna said:

Go on…?

 

2 hours ago, TAQ44 said:

This is worse than a nagging wife telling you she’s upset but won’t tell you why….. 🙄🙄🙄

End the statement with a cryptic “I can confirm” as if you have some crystal ball or something? Not disagreeing with you by any means, but cmon man. Let’s hear a bit more about this “confirmation”. 

Don’t prod the hulk. Go read through the covid thread if you want to see how well his economic predictions age. 

[TAQ44]

8 hours ago, Pnwrider said:

 

Don’t prod the hulk. Go read through the covid thread if you want to see how well his economic predictions age. 

Definitely not prodding. As I said, I don’t disagree a single bit. I just want more info on the open ended “confirmation” ending…

[RyanB]

10 hours ago, Pnwrider said:

 

Don’t prod the hulk. Go read through the covid thread if you want to see how well his economic predictions age. 

They sky has been falling for about the last 30 months. At some point it almost certainly will come true. 

[The Hulk]

My typical rant =)

1. Lots of rec/boating product orders are being cancelled quickly in the supply/mfg sector, production items /orders dropping which means futures boat demand will drop in roughly 6+ months (unless we print another $10T), anyone that has ability to cancel or highly reduce orders they have in place is trying to do so now... Target & Walmart are just oblivious to what's coming?... doubtful... bullywhip effect is a good term and now were going the other way. 

2. Boat/Lift/Dock sales are basically driven by stock market performance. Its easy to swallow a 100-300k boat when you make a ton on your investments..(Or think you did).... On the other hand when you take a large hit to your nest egg most semi rich folks tend not to splurge on such toys. Keep in mind MANY or most folks are still borrowing & getting loans on these things... Largest drop in housing demand in history due to inflation and higher rates, that will obviously carry over into Boats.. Higher interest means less affordability on these expensive toys for 95+% of typical buyer.  Don't forget were in QT meaning money is harder and harder to get for everyone. We have gone from Cash is Trash to Cash is King. simply put its getting harder and more expensive to borrow $$. 

3. large layoffs of high paid folks has started, the Fed has made it clear they will continue for probably 9-12 months on the current path as unemployment rises in order to crush inflation. 

4. And most obvious:.. I "again" always look what's happening across the pond. Just like during lockdown orders died (I'll admit I was all doom & gloom when covid hit due to all the cancelled orders)...then instantly we went to BOOM over there... then here... now currently its total BUST over there. The WORLDS MFG is going to ZILCH on production demand why would anyone think that doesn't translate to a HUGE pull back, shipping rates are dropping quickly because lack of demand

5. (assuming no Rail strike) or WWIII scenario we are straight up in STAGFLATION mode, a term most forget about (shrinking demand + higher prices). IMO Black Friday should be epic for discounts on trinkets & over stocked junk from retailers, however items everyone NEEDs, food/Energy will continue to rise and the fed will continue to try and hide the fact they are... People are set for sticker shock (even here) on this winters Nat. Gas & elec costs let alone the expensive food has yet to be harvested and we wont feel the true inflation for another 6-12 months on food. 

6. Lakefront property: seems a quick shift in past month or two, the overpaying has slowed and most notifications on my searches at least are all price DROPS.. 

we did a bunch of interviews for a new hire this week. Numerous folks in difference sectors here in small town IN... every one of them was let go or is getting let go... Strange given everyone is dying for work....or i should say...was... Most interesting was one that worked at Rent-A-Center.. Stock has dropped in half this year and i was dumfounded to learn about how "low blue collar" is  beyond Broke, not a good sign.  - i was surely shocked at the number of companies large and small laying off...

I have that bad gut wrenching 08 feeling...Fed is going to overcorrect due to using lagging indicators.  Say what you will but there is literally ZERO good news on the horizon.... lets even say the war comes to an end... energy & food crisis would still take min 18-24months or longer to get resolved. 

 

 

 

[UWSkier]

If layoffs of high paid workers are an indicator, I can tell you that there has been a ton of RIF activity across the tech sector in the last 3-4 months with more on the way.  Tech blue-chippers are laying off sizeable chunks at a time.  I don't know to what degree this is reactionary, i.e. "Google is laying off so I should too" type of panic or if it's real cutting of dead weight.  Probably a bit of a mix.

That has to have downstream impacts on recreational spending, but I don't think we're to the point yet where the fire sales will start.  Folks with paid-for assets will likely just hold onto them and forego annual upgrades.  People who way over-leveraged themselves to buy a wake boat that costs what a house did 5 years ago...  you might see those boats for sale but TBH I'm not sure what percentage of boaters fall into that camp.  Lots of people with stupid $ these days...

 

[NWBU]

2 hours ago, UWSkier said:

Lots of people with stupid $ these days.

The amount of average looking households that make $400-500k always amazes me. And the ones making $750k-$1M aren’t as rare as one would think.

[TAQ44]

6 hours ago, The Hulk said:

My typical rant =)

1. Lots of rec/boating product orders are being cancelled quickly in the supply/mfg sector, production items /orders dropping which means futures boat demand will drop in roughly 6+ months (unless we print another $10T), anyone that has ability to cancel or highly reduce orders they have in place is trying to do so now... Target & Walmart are just oblivious to what's coming?... doubtful... bullywhip effect is a good term and now were going the other way. 

2. Boat/Lift/Dock sales are basically driven by stock market performance. Its easy to swallow a 100-300k boat when you make a ton on your investments..(Or think you did).... On the other hand when you take a large hit to your nest egg most semi rich folks tend not to splurge on such toys. Keep in mind MANY or most folks are still borrowing & getting loans on these things... Largest drop in housing demand in history due to inflation and higher rates, that will obviously carry over into Boats.. Higher interest means less affordability on these expensive toys for 95+% of typical buyer.  Don't forget were in QT meaning money is harder and harder to get for everyone. We have gone from Cash is Trash to Cash is King. simply put its getting harder and more expensive to borrow $$. 

3. large layoffs of high paid folks has started, the Fed has made it clear they will continue for probably 9-12 months on the current path as unemployment rises in order to crush inflation. 

4. And most obvious:.. I "again" always look what's happening across the pond. Just like during lockdown orders died (I'll admit I was all doom & gloom when covid hit due to all the cancelled orders)...then instantly we went to BOOM over there... then here... now currently its total BUST over there. The WORLDS MFG is going to ZILCH on production demand why would anyone think that doesn't translate to a HUGE pull back, shipping rates are dropping quickly because lack of demand

5. (assuming no Rail strike) or WWIII scenario we are straight up in STAGFLATION mode, a term most forget about (shrinking demand + higher prices). IMO Black Friday should be epic for discounts on trinkets & over stocked junk from retailers, however items everyone NEEDs, food/Energy will continue to rise and the fed will continue to try and hide the fact they are... People are set for sticker shock (even here) on this winters Nat. Gas & elec costs let alone the expensive food has yet to be harvested and we wont feel the true inflation for another 6-12 months on food. 

6. Lakefront property: seems a quick shift in past month or two, the overpaying has slowed and most notifications on my searches at least are all price DROPS.. 

we did a bunch of interviews for a new hire this week. Numerous folks in difference sectors here in small town IN... every one of them was let go or is getting let go... Strange given everyone is dying for work....or i should say...was... Most interesting was one that worked at Rent-A-Center.. Stock has dropped in half this year and i was dumfounded to learn about how "low blue collar" is  beyond Broke, not a good sign.  - i was surely shocked at the number of companies large and small laying off...

I have that bad gut wrenching 08 feeling...Fed is going to overcorrect due to using lagging indicators.  Say what you will but there is literally ZERO good news on the horizon.... lets even say the war comes to an end... energy & food crisis would still take min 18-24months or longer to get resolved. 

 

 

 

Simply beautiful. Thanks for putting out. Could not agree more to all of this. 

[Bluefishcay]

50 minutes ago, NWBU said:

The amount of average looking households that make $400-500k always amazes me. And the ones making $750k-$1M aren’t as rare as one would think.

If you look at the data, if you have an agi of $400k+, that’s less than 2% of households in the us.   Last time I looked the median income was about $50k.  There are about 125 million households.  So 2% is 2.5 million households.  

[OtherBoatisaCessna]

I mean… I’m in total agreement with @The Hulk.  I feel like I’ve taken too many economics and finance classes to miss the significance of the Fed’s rate changes (another unprecedented in recent memory 75bps again today).  The Fed has now risen rates higher and faster than just before triggering the last financial crisis and while I don’t think there’s as much bad debt sloshing around, it ain’t looking pretty.  And a lot of what looks like safe, good debt today will quickly become bad debt if the housing market corrects as quickly and as much as I think it should.  
 

Yet… in all of this, I see no one panic/fire selling.  Actually, that’s not quite right - I talked to ONE seller that said he’s selling due to job loss.  Maybe it’s just a matter of time, or maybe I’m just a bit chicken little-ish.  Who knows, I really try not to guess these things anymore but I can definitely say I am feeling quite hesitant to write a $150k check right now…

Edited September 22, 2022 by OtherBoatisaCessna

[NWBU]

1 hour ago, Bluefishcay said:

If you look at the data, if you have an agi of $400k+, that’s less than 2% of households in the us.   Last time I looked the median income was about $50k.  There are about 125 million households.  So 2% is 2.5 million households.  

AGI only tells half of the story…

[granddaddy55]

58 minutes ago, OtherBoatisaCessna said:

I mean… I’m in total agreement with @The Hulk.  I feel like I’ve taken too many economics and finance classes to miss the significance of the Fed’s rate changes (another unprecedented in recent memory 75bps again today).  The Fed has now risen rates higher and faster than just before triggering the last financial crisis and while I don’t think there’s as much bad debt sloshing around, it ain’t looking pretty.  And a lot of what looks like safe, good debt today will quickly become bad debt if the housing market corrects as quickly and as much as I think it should.  
 

Yet… in all of this, I see no one panic/fire selling.  Actually, that’s not quite right - I talked to ONE seller that said he’s selling due to job loss.  Maybe it’s just a matter of time, or maybe I’m just a bit chicken little-ish.  Who knows, I really try not to guess these things anymore but I can definitely say I am feeling quite hesitant to write a $150k check right now…

unprecedented😂, must not have had a home equity loan under Bush 2, there were 3-5? 1/2-3/4 point increases , youngster! this is the first time ever done to a democrat admin 

Edited September 22, 2022 by granddaddy55

[oldjeep]

6 hours ago, granddaddy55 said:

unprecedented😂, must not have had a home equity loan under Bush 2, there were 3-5? 1/2-3/4 point increases , youngster! this is the first time ever done to a democrat admin 

Yeah, I find all this hand ringing over 3.5% rates hilarious.

 

Locally I would say that used Malibu prices are coming down a little, which is normal this time of year since the boating season is over for most.

Nice examples like this, that people were trying to sell for 60's early in the season

https://minneapolis.craigslist.org/hnp/bod/d/mankato-2009-malibu-vlx-with-monsoon-350/7530543597.html

Newer boats that people paid way too much for over the last couple years are still going to be priced high until folks accept the reality that most are not going to sell for what they bought for.

Edited September 22, 2022 by oldjeep

[Surfbeast21]

Search The 80’s if you want to see real interest rates. 
 

not political just facts.   

[shawndoggy]

Interesting perspectives!  For the grinders out there who do a little better in an up economy and a little worse in a down economy, things aren't looking THAT bad (def not like 08 in my hood, but Nevada was ground zero back then).  However, for the people in my social circles who do VERY VERY well in the up economy and VERY VERY badly in the down economy... blood seems to be in the water.  I'm thinking of residential real estate agents and mortgage brokers mostly.  Ouch, those folks gonna be hurting.  I suppose that the same will be true for folks in @Hulk's circles who did crazy well with RV manufacturing in the past few years and are now seeing that winter has arrived.

I'm not ready to put all of my assets into bicycle parts and ammo quite yet.

[oldjeep]

4 minutes ago, shawndoggy said:

Interesting perspectives!  For the grinders out there who do a little better in an up economy and a little worse in a down economy, things aren't looking THAT bad (def not like 08 in my hood, but Nevada was ground zero back then).  However, for the people in my social circles who do VERY VERY well in the up economy and VERY VERY badly in the down economy... blood seems to be in the water.  I'm thinking of residential real estate agents and mortgage brokers mostly.  Ouch, those folks gonna be hurting.  I suppose that the same will be true for folks in @Hulk's circles who did crazy well with RV manufacturing in the past few years and are now seeing that winter has arrived.

I'm not ready to put all of my assets into bicycle parts and ammo quite yet.

Pretty much anything associated with the mortgage industry is a problem right now.  I've got a relative who runs a big refi processing group and that will be a source for a lot of job loss.

[OtherBoatisaCessna]

8 hours ago, granddaddy55 said:

unprecedented😂, must not have had a home equity loan under Bush 2, there were 3-5? 1/2-3/4 point increases , youngster! this is the first time ever done to a democrat admin 

Yer making my point, old man.  It is “unprecedented in recent memory” just like I said - Bush 2 was 20 years ago and that string of rate increases culminated in the financial crisis and Great Recession. 
 

And the point isn’t that rates are objectively high - it’s that they are relatively higher than they were, and moving fast.  Furthermore, not all rate changes are created equal - I’m sure you understand the underlying math and and I don’t need to point out that a 2% rate increase when the federal funds rate is, say, 1% has a massive difference on asset values compared to a 2% rate increase when the rate is, hypothetically, 10%.

Edit: I took @granddaddy55‘s comment at face value but always had in my mind that the string of Great Recession-causing rate increases were never more than 25bps at a time (we’re on our third at 75bps).  But I think I’m right, although I’m working from my phone which makes this kind of data-finding tough.  From what I can find on my phone is the last time we had 50-75bp increases was in the mid-90s, 30 years ago.  

Edited September 22, 2022 by OtherBoatisaCessna

[mxmark4]

My boat left last night with its new owner. Sold it for more than I paid like one would hope to do. Got a new boat loan ready to go @ 6.99% before fed increased rates again Wednesday. In the event I find another one thats a deal.  But theres no way I am gonna pay the prices folks are asking around here. I live at ground zero for most wake boat manufacturers( knoxville, tn) and theres so much out here that a deal will pop up sooner than later.  Either way my season has wound down, doing a nightshift weekend only contract has taken away all my lake time anyways so Im  gonna hold my cash and see what happens in the next few months. 

[The Hulk]

On 9/22/2022 at 12:01 AM, OtherBoatisaCessna said:

  
 

Yet… in all of this, I see no one panic/fire selling.  Actually, that’s not quite right - I talked to ONE seller that said he’s selling due to job loss.  Maybe it’s just a matter of time, or maybe I’m just a bit chicken little-ish.  Who knows, I really try not to guess these things anymore but I can definitely say I am feeling quite hesitant to write a $150k check right now…

Doom and gloom 08 Michael Burry cashed out about a month back if I recall as well as some other big names. 

Many Tech Giants cashed out like 4-8 months back.. some of the smartest folks in the world.. or were told at least..