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Predicting Cruising Sailboat Prices For Next 2 Years


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Okay, so we have exerienced the Covid boat-buying frenzy during the past year that continues today. Will this market firmness continue for sailboats, or will things cool off as people resume travel, dining out, etc. like they did pre-pandemic?  

Up until now I tended to think that by late summer we might see things cool off. But now, with inflation driving up the cost of everything else (houses, new boats, building materials, etc.) 10-50%, I'm not so sure. I'm starting to think that boats (even sailboats, which require more time and expertise, so that they are on the softer side of the market) may stay strong as long as the economy is not slumping. And if the US keeps fueling this growth, then probably we won't see a turndown for over a year.

Seeking evidence-based prognostications for the cruising sailboat market. More specifically, the 40' and over offshore boat market, 1980s-90s vintage ones that have been well kept. They are already priced at a fraction of replacement cost. If we were staring another big recession in the face, I'd expect prices to drop within 2 years. But maybe not before then. Help me here...trying to justify a purchase. :)

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2 minutes ago, Israel Hands said:

Okay, so we have exerienced the Covid boat-buying frenzy during the past year that continues today. Will this market firmness continue for sailboats, or will things cool off as people resume travel, dining out, etc. like they did pre-pandemic?  

Up until now I tended to think that by late summer we might see things cool off. But now, with inflation driving up the cost of everything else (houses, new boats, building materials, etc.) 10-50%, I'm not so sure. I'm starting to think that boats (even sailboats, which require more time and expertise, so that they are on the softer side of the market) may stay strong as long as the economy is not slumping. And if the US keeps fueling this growth, then probably we won't see a turndown for over a year.

Seeking evidence-based prognostications for the cruising sailboat market. More specifically, the 40' and over offshore boat market, 1980s-90s vintage ones that have been well kept. They are already priced far far below replacement cost. If we were staring another big recession in the face, I'd expect prices to drop within 2 years. But maybe not before then. Help me here...trying to justify a purchase. :)

How many at the dock?  Trailer parks on the water is a yesterday fad.

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7 minutes ago, Israel Hands said:

Help me here...trying to justify a purchase. 

Buy high, get the best boat you can find right now when you want it . Cry once.

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35 minutes ago, Israel Hands said:

Help me here...trying to justify a purchase. :)

There's no justifying a boat purchase and there are far more sensible ways of betting on or against the economy, inflation, etc.  

Best to buy the best boat you can, use it like hell & set up an investment strategy independently which will hopefully nurture your boat problem far into the future.   

 

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1 hour ago, Blue Crab said:
1 hour ago, Israel Hands said:

Help me here...trying to justify a purchase. 

Buy high, get the best boat you can find right now when you want it . Cry once.

^ this ^

Well, I dunno about "buy high" except as a short form of saying "go to the top of the price range you can afford, and don't back away from the right boat because of the cost (again, provided you can really afford it)"

I am basing our financial plans on inflation ramping up over the next 3~4 years. Thing is, when interest rates start going up, that dampens the market for goods that commonly require financing (cars, big boats, houses). It also dampens market demand generally because so many people buy almost everything on credit these days, but it hits the big-ticket items first, and harder.

How long will the seller's market continue? Depends on how widely desirable the boat you want is. There are boats with cult followings that sell for what seem to me like unreasonably high prices, even in the depths of the buyers market over the past 20 - 1 years.

FB- Doug

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Someone who is concerned about the economy and boat prices must find a different hobby. Plus, if one is going cruising two years from now one should buy the boat two years from now. 

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10 minutes ago, El Borracho said:

Someone who is concerned about the economy and boat prices must find a different hobby. Plus, if one is going cruising two years from now one should buy the boat two years from now. 

LOL owned boats all my life so I'm already stuck. But yes, if I thought I'd pay $100K in 6 months for a boat that costs $135K today, I'm that kind of barato. That could be 1-2 years worth of R&M! :D  But doubting that possibility now.

Picked 2 year horizon because that's about as far as we can probably guess about the economy, and also if I don't move up from my smaller cruiser by that time then will probably just hold onto it.

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Evidence based predictions of boat prices 2 years in the future is tricky.

You might get a group guess consensus (crowd wisdom) as the next best thing.

So....my guess:  prices will stay high this summer as Covid sticks around and people get used to travel. Travel outside the US (Europe) will remain restricted until the fall due to slower vaccine rollouts.

Inflation will be greater than we've been used to for the next few years but I'm guessing it won't affect USED boat prices very much as owners probably have a value in mind when they price them.

As usual, prices in depths of winter will be lower. So maybe buying this winter or the next winter makes the most sense?

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41 minutes ago, El Borracho said:

Someone who is concerned about the economy and boat prices must find a different hobby. Plus, if one is going cruising two years from now one should buy the boat two years from now. 

But Daaaad, I wanna own a boat nooowww!  But actually I like the idea if you are going cruising in two years to buy the boat now, get to know it well work and your way through all of he issues - there always seems something no matter the price of the boat. 

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8 minutes ago, Elegua said:

But Daaaad, I wanna own a boat nooowww!  But actually I like the idea if you are going cruising in two years to buy the boat now, get to know it well work and your way through all of he issues - there always seems something no matter the price of the boat. 

I have done it both ways. First time, prepared a tired boat over several years then went cruising. Second time, bought a tired boat (but good enough) and was cruising on the first day. Second way far better experience. Better in enjoyment and economically. Instant gratification, too. Also put a sharp focus on maintenance and upgrade priorities.

Two years of traditional investment gains far more certain than two years of yacht gains ... especially when all the costs are totalled up.

 

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I expect prices of smaller motor boats will be soft 3-5 years from now, as half the people who bought them as Covid toys suddenly realize that owning a boat is an expensive PITA and they don't actually enjoy it as much as they thought they would.  Cruising sailboats?  I dunno: I don't think nearly as many people bought them as impulse buys, and so there will be fewer morning-after headaches.

That's fine by me. I like my boat and am not eager to trade her in, but I'd love to add an MJM 36z for my 45th.

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My guess is that by the fall it will no longer be a sellers market.   Then it will take time for the sellers to accept that it shifting back to a buyers market - that may take a couple of years.

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I will bet that the market softens in the future but we may see two more good years.

First off, I suspect that COVID is not going to be over in 2021 as far as people returning to 2019 life styles and habits.  As a matter of fact we may never return to what was normal to us then.  Yes there will be rebounds in a lot of areas but we have learned many new skills and habits.  Hell we all know what Zoom is now and working remotely will stay in many sectors.  So with technology improving as time moves on, working remotely will become even easier and living on a boat in some remote anchorage with Elon's batteries and skylink internet more opportunity to do that will evolve.  However I predict that with this becoming more available, less  do it yourself attitude will exist and people will be focused on newer boats with those conveniences built in.  Older boats will become less desirable.  Large open condomarans or wide bright monos will be what is desired.  Older dark and cramped monos with cluttered small cockpits and old electronics will get really cheap or end up worthless in landfills.  

Second.  Decreasing population.  The western world is facing decreasing population everywhere.  Boomers are becoming less relevant to markets and fewer consumers with the capability to work and live where they chose is happening.   Financial and educational divides are increasing while the population decreases.  While this may be big news today, it will not become equitable for a long time.  (sorry but equitable is not the right word, I dont know a good way to say it)  More consumers will become the group of desperate decision makers.  Desperate people make desperate decisions.  So while more people may be able to work and live remotely or transiently, the population of other boat owners eg recreational boat owners will decrease.  Less capital available to the formerly biggest part of the market.  

 

So go buy that HR 40C, pick up a Skylink subscription and a bunch of batteries.  Its value will be stable for a few more years.  Then some other revolution will hit the world and it will all get better or worse.  Of course I could be totally off.

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There's a nice looking Esprit 37 waiting for the bridge outside my office. I think they made a good choice. 

1 hour ago, El Borracho said:

First time, prepared a tired boat over several years then went cruising. Second time, bought a tired boat (but good enough) and was cruising on the first day.

Was it the relative tiredness that made the difference? Possibly I'm a masochist, but I've enjoyed making the boat "mine". 

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Well there's a  boat enthusiast over in SA that seems to think that an old Swan 44 is a decent hedge against the hyper inflation that fiat currency is about to face.

Maybe go ask him.

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5 minutes ago, Elegua said:

There's a nice looking Esprit 37 waiting for the bridge outside my office. I think they made a good choice. 

Was it the relative tiredness that made the difference? Possibly I'm a masochist, but I've enjoyed making the boat "mine". 

Yes, the first boat was more desperate. But in hindsight I should not have put so much effort into getting everything just right. Learned it is better to just go. Plus, in two years many of the new items will be at their half-life.

Depends on the plans, too. Would not have departed on a 2000 mile offshore leg with either. But one hour into my first drift down to Mexico I thought "Why did I wait?" Then arriving there many immaculately prepped boats were just as busy in repairs as I was...

But working on boats towards eventual cruising is enjoyable too. Probably not economic, though.

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3 minutes ago, El Borracho said:

Yes, the first boat was more desperate. But in hindsight I should not have put so much effort into getting everything just right. Learned it is better to just go. Plus, in two years many of the new items will be at their half-life.

Depends on the plans, too. Would not have departed on a 2000 mile offshore leg with either. But one hour into my first drift down to Mexico I thought "Why did I wait?" Then arriving there many immaculately prepped boats were just as busy in repairs as I was...

But working on boats towards eventual cruising is enjoyable too. Probably not economic, though.

As many others have pointed out, we should never put economic and sailboat in the same sentence. The short half-life part is and very important part that I didn't understand until too late.  I've got another 2-3 years in the salt-mine before I push off.   

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2 hours ago, Dogscout said:

However I predict that with this becoming more available, less  do it yourself attitude will exist and people will be focused on newer boats with those conveniences built in.  Older boats will become less desirable.  Large open condomarans or wide bright monos will be what is desired.  Older dark and cramped monos with cluttered small cockpits and old electronics will get really cheap or end up worthless in landfills.  

I agree with this as a shorter term outlook.

2 hours ago, Dogscout said:

Decreasing population. 

This is happening, but I think the impact is long-term. It is being felt in Western Europe, Japan, and eventually in China.

- B.C., a boomer

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Everything we 'knew' a year ago, is changed.

From Manhattan to my little town on the coast of Maine, it's all in flux. Trends are no longer assured.

Better to think outside of the old boxes, I think. 

Buy the boat now, that's my hunch. It will go up.

Don't sell your house, you'll regret it. 

Don't buy office space. 

Go cruising as soon as you can. That's probably one old idea that hasn't changed. 

 

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Coastal cruising will go up, blue water cruising will go down because of PITA quarantine restrictions.

Covid and it’s mutant children aren’t going away, borders are staying closed, vaccine passports are in but vaccine effectiveness will lag behind the mutants.

So countries with decent coastlines like the US, Canada, Oz, NZ, Europe will be fine.

Benehuntalinas will go up, good offshore boats will stay flat, Condomarans will stay stupidly high.

And if a worse virus leaks out of someone’s lab, or we see serious domestic unrest, the opposite applies and we all want a Carbon Cutter...

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4 hours ago, slap said:

My guess is that by the fall it will no longer be a sellers market.   Then it will take time for the sellers to accept that it shifting back to a buyers market - that may take a couple of years.

Fuck yeah, all the real estate agents who never accepted the bursting of the 2005~2007 bubble have been saying SEE I TOLD YOU SO!!!

the past 6 months will have them all psyched up for the next 15 years of refusing realistic prices

FB- Doug

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22 minutes ago, olaf hart said:

Coastal cruising will go up, blue water cruising will go down because of PITA quarantine restrictions.

Covid and it’s mutant children aren’t going away, borders are staying closed, vaccine passports are in but vaccine effectiveness will lag behind the mutants.

So countries with decent coastlines like the US, Canada, Oz, NZ, Europe will be fine.

Benehuntalinas will go up, good offshore boats will stay flat, Condomarans will stay stupidly high.

And if a worse virus leaks out of someone’s lab, or we see serious domestic unrest, the opposite applies and we all want a Carbon Cutter...

Or someone kicks-off SCS or Taiwan.  All bets are off....

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6 hours ago, Steam Flyer said:

^ this ^

Well, I dunno about "buy high" except as a short form of saying "go to the top of the price range you can afford, and don't back away from the right boat because of the cost (again, provided you can really afford it)"

I am basing our financial plans on inflation ramping up over the next 3~4 years. Thing is, when interest rates start going up, that dampens the market for goods that commonly require financing (cars, big boats, houses). It also dampens market demand generally because so many people buy almost everything on credit these days, but it hits the big-ticket items first, and harder.

How long will the seller's market continue? Depends on how widely desirable the boat you want is. There are boats with cult followings that sell for what seem to me like unreasonably high prices, even in the depths of the buyers market over the past 20 - 1 years.

FB- Doug

People finance toys? 

Our income stream is tied to the price of a volatile commodity. We dont even buy houses unless we can pay cash. 

I would have a hard time living without a sailboat. 

This will be a strange season. we're hoping Marion-Bermuda happens in June, but with our first grandchild due, I don't expect my wife to sail this summer. 

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Another interesting twist..  WFH (Work From Home) is now accepted...  and Starlink is a new way of being connected anywhere.. (Just waiting for a marine version which is supposedly on its way).   Now Home is where you want to be.. RV.. or boat.  

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44 minutes ago, h20man said:

Another interesting twist..  WFH (Work From Home) is now accepted...  and Starlink is a new way of being connected anywhere.. (Just waiting for a marine version which is supposedly on its way).   Now Home is where you want to be.. RV.. or boat.  

I don't think people are realistically factoring in the stationary aspect.  Alot of coastal cruising you can sit in a slip for months and still enjoy all the benifits of the tropics but be able to work weekdays and go out for weekends and longer trips. The star link could be great for work at home in many coastal spots.

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3 hours ago, Cruisin Loser said:

People finance toys? 

Our income stream is tied to the price of a volatile commodity. We dont even buy houses unless we can pay cash. 

I would have a hard time living without a sailboat. 

This will be a strange season. we're hoping Marion-Bermuda happens in June, but with our first grandchild due, I don't expect my wife to sail this summer. 

Shucks, people finance tennis shoes for their kids... some people finance pizza night.

Some people don't have an education in handling money (strange, in an avowedly-capitalist society) and even more people don't have the self discipline

FB- Doug

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Yes, we finance toys because they are the only way we can afford them. If you can pay $1M cash for a boat or a house, then you are blessed. We aren't. We didn't grow up sailing catboats in Maine inlets and skiiing in Taos. I worked my way through university hacking weeds and loading stoneboats in the middle of the Canadian prairies. 

You have the cash, good for you.

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Regarding the OP: Life is short, or can be—we never know the future. If you find a boat you want now and can afford it, and the price doesn’t seem too outrageous, go for it. The normal running costs over the years will far eclipse a slight purchase premium anyway. For what it’s worth, it seems to me (from a very qualitative, non-systematic and probably unreliable) occasional look at Yacht World that boats in the 35’ range are more premium priced right now than those in the 40-45’ range, where you are looking. I conclude this from relative pricing of 35’ vs 40’ boats from the same manufacturer. 

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5 hours ago, Cruisin Loser said:

People finance toys? 

Our income stream is tied to the price of a volatile commodity. We dont even buy houses unless we can pay cash. 

I would have a hard time living without a sailboat. 

This will be a strange season. we're hoping Marion-Bermuda happens in June, but with our first grandchild due, I don't expect my wife to sail this summer. 

I am with CL on this, it’s all about postponing gratification for a greater reward...

 

 

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Whether or not to finance a boat purchase has nothing to do with sailing. It is a calculated decision based on an individuals situation or personal choices. May not have anything to do with a person's wealth or cash balance either.

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3 hours ago, olaf hart said:

I am with CL on this, it’s all about postponing gratification for a greater reward...

Same, the only thing I've ever financed is real estate.

Everything else, if I can't pay cash, I can't afford it.

FKT

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Money is cheap at the moment.

 Say Mr & Mrs Boatless want to buy a £25K boat, and  it'll take them, say, five years to save enough to do so. They can buy £25K over five years for about £2K, often less.

 So, is it worth £2K (£35/month) to them to be able to own that boat for those five years?  (Obviously, along with all the joys of antifouling, repair bills, mooring fees etc)

 For many, the answer to that will be a resounding yes... especially if those five years are the ones when they have kids the "right age" (whatever that is) or are still fit enough to climb the companionway and jump onto a pontoon. People are spending that sort of money on a puppy at the moment: pick up a stray from the rescue centre and you can get your boat next week!

That's not to say it's the "right answer" just that it isn't necessarily the wrong one. 

Cheers,

              W.

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Boats are depreciating assets, so factor in the capital losses as well, their £25K boat has cost them close to £20K over five years and they still owe the original £25K.

It’s not surprising they didn’t have the cash saved to buy the boat in the first place.

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11 hours ago, h20man said:

Another interesting twist..  WFH (Work From Home) is now accepted...  and Starlink is a new way of being connected anywhere.. (Just waiting for a marine version which is supposedly on its way).   Now Home is where you want to be.. RV.. or boat.  

Remember when the great nut to crack was, "How can I cruise on my sailboat and make a living?" Answer 2021: Get a job you can work remotely. Duh

 

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3 hours ago, olaf hart said:

Boats are depreciating assets, so factor in the capital losses as well, their £25K boat has cost them close to £20K over five years and they still owe the original £25K.

It’s not surprising they didn’t have the cash saved to buy the boat in the first place.

Credit can be a powerful financial tool... it's also a powerful weapon against household stability/security and it's not the bank's goal (or anybody, really, in the business world) to have you get your nice boat and your nice early retirement. As WGW points out, low interest rates can be a great way to fit the boat you want into the timeline that works best for your life; just beware the pitfalls.

BTW the no-capital-repayment loans you mention, where not one penny of your regular payment goes against the original debt, are illegal in this state (North Carolina). The sharks have figured lots of ways around this law but sooner or later they end up getting tossed in court... so far... it's also illegal for a credit business to refuse early repayment and I have used this law myself.

FB- Doug

 

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The finance thing is interesting, if we did what we were supposed to do we never would have went cruising in our 20's or the last time. Had a loan on boat boats, paid them off, made it all work.  If we waited for a cash purchase probably would have gotten trapped in the rat race.  Now that we have gotten it all out of our system I would probably buy a retirement cruising boat outright because we know a little bit more about what we would want and could sort of plan ahead, but for someone young why not get a loan. The work at home opportunities are pretty amazing now.

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37 minutes ago, Steam Flyer said:

Credit can be a powerful financial tool... it's also a powerful weapon against household stability/security and it's not the bank's goal (or anybody, really, in the business world) to have you get your nice boat and your nice early retirement. As WGW points out, low interest rates can be a great way to fit the boat you want into the timeline that works best for your life; just beware the pitfalls.

BTW the no-capital-repayment loans you mention, where not one penny of your regular payment goes against the original debt, are illegal in this state (North Carolina). The sharks have figured lots of ways around this law but sooner or later they end up getting tossed in court... so far... it's also illegal for a credit business to refuse early repayment and I have used this law myself.

FB- Doug

 

I have clients in the oil & gas business. They pay cash when they feel like it, but they also work the credit game to excellent advantage. They could have paid cash for their $1m second home here in WY (now their primary residence); instead, they shopped mortgage rates and nailed down a construction/home loan at 2.9%. This is not a rate available to persons with limited collateral or income history. As high-net-worth people, they also have access to high-yield investment funds like ETFs and derivatives -- and the wherewithal to absorb risk that comes with those investments. These funds typically have buy-ins above $250k. But a well-managed portfolio of them will yield somewhere around 8%. By contrast, my mortgage is 8% and the only real avenues for savings or investment open to me are CDs returning 0.6% APY.

So my friends could pay cash for a house or boat, but it makes more sense to finance that shit at the lowest going rate, invest their free capital at the highest return rate, and reap the +5%. At the end of the 15 year mortgage, they will end up with a house and cash in pocket. Above a certain net worth, you become the bank -- borrowing low, lending high. Schlubs like me, not so much.:P

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32 minutes ago, Diarmuid said:

I have clients in the oil & gas business. They pay cash when they feel like it, but they also work the credit game to excellent advantage. They could have paid cash for their $1m second home here in WY (now their primary residence); instead, they shopped mortgage rates and nailed down a construction/home loan at 2.9%. This is not a rate available to persons with limited collateral or income history. As high-net-worth people, they also have access to high-yield investment funds like ETFs and derivatives -- and the wherewithal to absorb risk that comes with those investments. These funds typically have buy-ins above $250k. But a well-managed portfolio of them will yield somewhere around 8%. By contrast, my mortgage is 8% and the only real avenues for savings or investment open to me are CDs returning 0.6% APY.

So my friends could pay cash for a house or boat, but it makes more sense to finance that shit at the lowest going rate, invest their free capital at the highest return rate, and reap the +5%. At the end of the 15 year mortgage, they will end up with a house and cash in pocket. Above a certain net worth, you become the bank -- borrowing low, lending high. Schlubs like me, not so much.:P

There are options available to lower-income people with good credit ratings... you have to know about them, and you have to look harder than pushing the button on Rocket Mortgage.

Hi-yield investment, not so much, you're right that they usually come with a minimum kick-in. And they still tend to crash, my hi-yield corporate bond list has gone from ~9% to ~4% yields, although prices are more stable than the stock market.... they're declining consistently....:(

None of this stuff is as much fun as deciding how to spend the money, which boat and what equipment !!

FB- Doug

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I suspect that all these "cash only" comments are coming from old farts like me who have made their potful.

I only borrowed to buy my first 20 footer - I was a broke kid so it was that or not sailing.

Since then I have paid cash or used a LOC which was so cheap that the interest didn't matter - once inflation was factored in it only cost about 1% so who cares?

Full disclosure, the most I ever paid for a boat (always projects) was $16K USD. I'm not suggesting that a typical 30 YO family man should borrow 6 figures for a toy boat but judicious use of credit has always worked very well for me - no point in waiting until you are old before buying anything expensive.

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1 hour ago, stief said:

Did anyone succeed with the 'build and then rent the house to finance the boat' option? 

Sure. They're out there sailing and don't waste time on the internet like us.

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10 minutes ago, Elegua said:

No. Some of us are just very conservative. I sleep much better knowing my quick ratio is higher than 1. 

A boat loan balance would not be in the Quick Ratio....long term....only the current payment. Not a measure of conservatism. More an inverse indication of immediate doom.

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Just now, El Borracho said:

A boat loan balance would not be in the Quick Ratio....long term....only the current payment. Not a measure of conservatism. More an inverse indication of immediate doom.

Yes, only the current portion counts. The idea is to look at it over time projected into the future so that it always stays above 1. 

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17 hours ago, Ishmael said:

Yes, we finance toys because they are the only way we can afford them. If you can pay $1M cash for a boat or a house, then you are blessed. We aren't. We didn't grow up sailing catboats in Maine inlets and skiiing in Taos. I worked my way through university hacking weeds and loading stoneboats in the middle of the Canadian prairies. 

You have the cash, good for you.

I’m a less cash positive person like you Ish, and have to scrape to feed my sailing addiction and currently am living on my boat and flopping at my Dad’s or brothers in really cold weather. I will say that CL sent me a very expensive guitar to learn to play left hand style(failed), for no other reason than he is a nice and genuine person. I spoke to him briefly by phone to thank him and I hope to meet him sometime in the future. If I come West, I’d really like to meet you too. 
 

Meanwhile, I’m sitting at the club in NJ waiting for a guy from Connecticut to come 3 hours and buy a nice Westerbeke40 and reverse gear that I restored so he can drop it into a BP Valiant 40 project he just bought. The motor isn’t free, but he’s getting the best deal on Earth because I can help him out and like Bob Perry and his contribution to the sail of world. 
 

image.jpg

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6 hours ago, stief said:

Did anyone succeed with the 'build and then rent the house to finance the boat' option? 

Well yes and no.

I paid cash for my piece of land - no house. Built a hut, lived in that while I built my house, then built my big workshop and only then did I build my boat.

All while working a full time job up until I started building the boat. I like building things.

Now I could very, very easily rent my house and go sailing full time, but I could also not rent my house and go sailing full time, the money isn't the issue. I just choose not to.

FKT

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18 hours ago, Ishmael said:

Yes, we finance toys because they are the only way we can afford them. If you can pay $1M cash for a boat or a house, then you are blessed. We aren't. We didn't grow up sailing catboats in Maine inlets and skiiing in Taos. I worked my way through university hacking weeds and loading stoneboats in the middle of the Canadian prairies. 

You have the cash, good for you.

I didnt grow up doing those thing either. I had a 12' catboat in RI. 

I had a nice childhood, I guess, until my father blew his brains out and we discovered we were actually poor. I suppose I'm allergic to debt because of that experience. 

I went to a state school, married my sweetheart, and worked my ass off. We lived in a 1600 sq ft 1 bathroom house for over 20 years, raised 2 kids there, I still buy used cars for myself. We did not have family money.

We paid cash for the place in Taos, where I am today, sking with my son and a half dozen guests we have up for the long weekend. I'll out him a little here, but @d'ranger's cousin was up here last weekend with some of his friends and family, I loan the place free to friends more than I use it myself.

Yeah, we are blessed, and we know it. Our 2 largest expenses these days are taxes and charity. 

I am profoundly uncomfortable with debt, but we're all shaped by life experiences, I suppose.

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1 hour ago, Sail4beer said:

Meanwhile, I’m sitting at the club in NJ waiting for a guy from Connecticut to come 3 hours and buy a nice Westerbeke40 a

And I’m sitting in MA a little deflated after looking at another boat. One thing I’ve learned - until you see the boat firsthand, you know nothing. Photos and descriptions are often misleading.

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Sorry about you being misled on a boat search. 

Maybe you have to look for boats that have a recent seller’s survey to determine the true condition of the boat to a certain extent.

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56 minutes ago, Cruisin Loser said:

I didnt grow up doing those thing either. I had a 12' catboat in RI. 

I had a nice childhood, I guess, until my father blew his brains out and we discovered we were actually poor. I suppose I'm allergic to debt because of that experience. 

I went to a state school, married my sweetheart, and worked my ass off. We lived in a 1600 sq ft 1 bathroom house for over 20 years, raised 2 kids there, I still buy used cars for myself. We did not have family money.

We paid cash for the place in Taos, where I am today, sking with my son and a half dozen guests we have up for the long weekend. I'll out him a little here, but @d'ranger's cousin was up here last weekend with some of his friends and family, I loan the place free to friends more than I use it myself.

Yeah, we are blessed, and we know it. Our 2 largest expenses these days are taxes and charity. 

I am profoundly uncomfortable with debt, but we're all shaped by life experiences, I suppose.

Glad it worked out but doesn't sound all that "magical" as you indicated previously. Nothing magical about showing up everyday for 20 or 30 or 40 years. The harder we work, the luckier, it seems. Or, maybe luck, like magic or myth, has nothing to do with it. "Pray To God, But Row Away From The Rocks."

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1 hour ago, Cruisin Loser said:

 @d'ranger 

I am profoundly uncomfortable with debt, but we're all shaped by life experiences, I suppose.

I think that's the case for anyone who has been truely poor and somehow managed to claw there way out of it.

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2 hours ago, Fah Kiew Tu said:

Well yes and no.

I paid cash for my piece of land - no house. Built a hut, lived in that while I built my house, then built my big workshop and only then did I build my boat.

All while working a full time job up until I started building the boat. I like building things.

Now I could very, very easily rent my house and go sailing full time, but I could also not rent my house and go sailing full time, the money isn't the issue. I just choose not to.

FKT

Well, well well. Kindred spirits here. Wife and I designed and built our first house (spent less than $1K on labour), planning that the lower 1/2 would pay for the boat, and the upper half pay the mortgage. Kids happened, and they ended up living in the lower 1/2 for many years. We never did charge them rent or room and board or stuff like that. But, there was money enough to feed the sailing habit, so the dream of making a life living and working off the boat stayed a dream, and sailing became a summer pastime. Lost a summer or two when we built my mother a retirement home, but then she surprised us years later by signing it over to us. Ironic, my kids now use it as a work from home office. At least they have now decided to pay the internet and power bills. Their choice, not ours :P

So, the build plan paid off--mostly for our family, not directly for my wife and I. No serious regrets: glad the labour was useful for others. The family were able to capitalize on our labour, and because we live in such a privileged society, we always had enough money for extras like warm winter holidays, charity and sailing. 

Looking forward to the soft water in about a month, and isolating there this summer. No longer yearn for year-long cruises: past the age where quick access to medical isn't a priority.

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2 hours ago, Israel Hands said:

And I’m sitting in MA a little deflated after looking at another boat. One thing I’ve learned - until you see the boat firsthand, you know nothing. Photos and descriptions are often misleading.

Sorry to hear that... some people have bought boats and cars and houses... probably married women... sight unseen, and been very happy.

FWIW there is actually a psychological disconnect in the seller's brain, economists call it the "endowment effect" wherein a person believes the object they are selling is endowed with much more desirable properties.

FB- Doug

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2 hours ago, Cruisin Loser said:

I am profoundly uncomfortable with debt.

I think it depends. There are many kinds of debt. Some I am uncomfortable with, others I am not. I was in the commercial banking business for many years. Some loans I was very glad to make, others I would run from. I apply the same standards to myself.

 

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20 minutes ago, Bull City said:

I think it depends. There are many kinds of debt. Some I am uncomfortable with, others I am not. I was in the commercial banking business for many years. Some loans I was very glad to make, others I would run from. I apply the same standards to myself.

 

My personal rule of thumb is, if it's an income-producing asset or similar, I'll consider borrowing to buy. If it's a toy, I pay cash.

Unless it's your one and only home or it's earning money (fishing, charter, etc) sufficient to provide a reasonable ROI, all boats are toys.

Returning to the original topic, were I planning on selling a boat, the prices would crash. Buying, they'd go through the roof. So you buy what you can justify to yourself on the timeline that makes sense to you, and then you don't need to worry if someone has clouded your crystal ball.

FKT

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1 hour ago, Steam Flyer said:

Sorry to hear that... some people have bought boats and cars and houses... probably married women... sight unseen, and been very happy.

FWIW there is actually a psychological disconnect in the seller's brain, economists call it the "endowment effect" wherein a person believes the object they are selling is endowed with much more desirable properties.

FB- Doug

Staying with friends and enjoyed a great Italian dinner so all was not lost!  Looking at boats can be fun

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Boat money is dead money to me, there is enough hassle owning a boat that worrying about repaying a loan would tip the scale to my “why bother” setting.

Our boats are insured, but we could walk away from them without pain, the insurance is really to cover liability.

Our story is a lot like CL’s, except no parents died, they just lived a sad existence as slaves to debt.

We have great lives on our own terms, by not caring for the opinions of others, or the demands of bankers.

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2 hours ago, olaf hart said:

Boat money is dead money to me, there is enough hassle owning a boat that worrying about repaying a loan would tip the scale to my “why bother” setting.

Our boats are insured, but we could walk away from them without pain, the insurance is really to cover liability.

Our story is a lot like CL’s, except no parents died, they just lived a sad existence as slaves to debt.

We have great lives on our own terms, by not caring for the opinions of others, or the demands of bankers.

My father had to go on the road during the Depression. He only ever had one debt and that was the house we lived in.

I've said it before - I regard boat money the same as I regard money spent on eating out or drinking good booze. It's a consumable, ephemeral and once spent it's gone forever. Who'd borrow money to go to a fancy dinner in a restaurant?

Yeah OK given the size of credit card debt, lots of people. Shrug.

FKT

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How many long haulers are there going to be?  How many will be healthy enough to sail?  How many will be able to afford health care?  How many industry people will be healthy enough to work?

Read a study the other day saying the willing vaccinated (about a 3rd of the population) after full vaccination are not going to change any habits - they will stay distanced, with full PPE, no travel, double masking, no visiting- how will this impact, say, marinas, yards-  physically selling maintaining, or buying a boat?  (Although people were buying boats sight unseen before COVID)  This cohort controls what cash?    How long can they stay with what they have, and how long putting off haul outs etc.  (Kind of like going to the dentist or barber?). 

Seems to me there’ll be 3 cohorts

- those who say to hell with any precautions

- those who play the odds 

- those who stay withdrawn

how each messes with cruising, racing, or day sailing is still sorting itself out.  

For example, the Brazilian mutation has eliminated cruising BC out of the equation for us for some time, vaccination passport or not, so it’s day sailing for the foreseeable future.  And working in the boat, even after the vaccine, down at the Marina, is something to think twice about until specific vaccine effectiveness is nailed down.  All this will mess with boat sales, and ancillary buys- sails, upkeep etc., until things evolve to be reliably more safely distanced. What will that even look like?  A local rigger group  just went through quarantine, for example.  Expand that out to other aspects of the boating industry-  like buying and selling.  Will sailing be worth the present risk?  How will sailing adapt?  If at all?  

Judging by, for example, this thread, it’s up in the air.  Right now it looks like the vaccines will keep you from dying- that’s about it- maybe it will change, but how?  Too many people are still getting sick, asymptomatic spread is still out there because testing is still mainly done when symptoms appear, which leads to asymptomatic spread, which leads to more sick people, which leads to more mutations, etc etc. and if personal interface is still required for necessary stuff in the industry, how does it happen, and who do you trust, and then we’re back to the long hauler issue....

Sorry about the length of this, but it’s a circle- how much risk will be involved in sailing, and how will that change the industry?


 

 

 

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Paying cash for a house? That's a good one. Let me get my napkin and sharpie out and figure out if young first time buyers in my market will ever even own their house, or will have a hope in hell of coming up with even a downpayment without intergenerational lending.

In Toronto's market you aren't gonna get much more than a shoebox for less than 1.5 million downtown. There is a mortgage stress test by law that calls for around 20% of purchase price as a downpayment as the first main hurdle to clear.

So now we're talking about having 300k loose change lying around for a young couple with kids to be able to pay for the privilege of entering a mortgage that they'll probably not pay off for a very very long time, if ever. Suppose a healthy income of 200k a year. If that's not dual income, shave off close to half for tax and your left with 100K a year living expenses for a young family of 4.

Living in the big city isn't cheap. I'd challenge that young family to put away 10-20k a year savings. That's 10 years of diligence to not even qualify for a basic starter mortgage.

Of course, you can always move out of such an expensive market, or commute from a cheaper one if your income is tied to said market.

Not passing any judgement, but just noting that in this market at least, paying cash for a home is a pipe dream for all but a very, very small minority. Once you get into the luxury market, cash purchases ironically might actually be more common.

 

 

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This kind of attitude, plus generally being raised to avoid debt, is why I've spent the last couple years replacing more or less everything on my boat, rather than effortlessly paying a loan each month.

Given the same choice again, I'd absolutely borrow the money, buy a nicer boat, and be out sailing instead of restoring. And that's coming from someone who likes working on boats.

Certainly a highly personal decision, but what seems to be often missed in these discussions is considering total cost of ownership. That's what you need to afford. And it includes purchase price, depreciation, maintenance, repairs, slip fees, and also time.

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4 hours ago, Amati said:

How many long haulers are there going to be?

Yeah. Bleak outlook. We can still sail around the world...nonstop...ugh. Or orbit the Pacific thru Polynesia and SE Asia...no problem...only non-stop...ugh. I could sail down to Mexico, U-turn offshore of Zihuatenejo and bash back non-stop until bleak San Diego...ugh. A cruise to Long Beach lacks some allure.

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57 minutes ago, El Borracho said:

Yeah. Bleak outlook. We can still sail around the world...nonstop...ugh. Or orbit the Pacific thru Polynesia and SE Asia...no problem...only non-stop...ugh. I could sail down to Mexico, U-turn offshore of Zihuatenejo and bash back non-stop until bleak San Diego...ugh. A cruise to Long Beach lacks some allure.

Dinghies and a cats are the answer?

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On 4/2/2021 at 10:11 AM, Elegua said:

But Daaaad, I wanna own a boat nooowww!  But actually I like the idea if you are going cruising in two years to buy the boat now, get to know it well work and your way through all of he issues - there always seems something no matter the price of the boat. 

 

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1 hour ago, Amati said:

Dinghies and a cats are the answer?

I have been thinking of that. As I commute between Philippines and California maybe a big dinghy there and OPB YC racing in CA (which seems to be marginally COVID compliant). Kinda big changes for a stubborn old guy. Wifey would be ecstatic.

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4 hours ago, andykane said:

This kind of attitude, plus generally being raised to avoid debt, is why I've spent the last couple years replacing more or less everything on my boat, rather than effortlessly paying a loan each month.

Given the same choice again, I'd absolutely borrow the money, buy a nicer boat, and be out sailing instead of restoring. And that's coming from someone who likes working on boats.

Certainly a highly personal decision, but what seems to be often missed in these discussions is considering total cost of ownership. That's what you need to afford. And it includes purchase price, depreciation, maintenance, repairs, slip fees, and also time.

Borrowing may well be fine if you're in a nice secure job and have a good cash reserve in case things go to shit. Who could have predicted covid 19? Sure, a lot of us knew something like it was going to happen sometime, but when....?

Anyway I agree it's an individual's decision on how much risk they are comfortable carrying.

WRT total cost of ownership, mine stacks up as follows:

Purchase price - written off over the build period. NFI really and quite a bit was in tooling I still have.

Depreciation - zero. As far as I'm concerned it's fully depreciated the moment it left the shed.

Maintenance - probably $5K this year, I'm doing some upgrades.

Repairs - included in maintenance.

Insurance - zero.

Slip fees - zero. I keep my boat on a mooring and that costs me $82/year.

Time on the hard, probably in the order of $1200 this year as I plan on being out for 2-3 weeks.

FKT

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2 hours ago, Fah Kiew Tu said:

Borrowing may well be fine if you're in a nice secure job and have a good cash reserve in case things go to shit. Who could have predicted covid 19? Sure, a lot of us knew something like it was going to happen sometime, but when....?

Anyway I agree it's an individual's decision on how much risk they are comfortable carrying.

WRT total cost of ownership, mine stacks up as follows:

Purchase price - written off over the build period. NFI really and quite a bit was in tooling I still have.

Depreciation - zero. As far as I'm concerned it's fully depreciated the moment it left the shed.

Maintenance - probably $5K this year, I'm doing some upgrades.

Repairs - included in maintenance.

Insurance - zero.

Slip fees - zero. I keep my boat on a mooring and that costs me $82/year.

Time on the hard, probably in the order of $1200 this year as I plan on being out for 2-3 weeks.

FKT

That's my approach too--assume full depreciation the moment I own the boat. If that scares the heck out of me, then I can't afford the boat. I realize that doesn't work for everybody though. 

Went sailing today and completely forgot about covid for a couple of hours. Priceless. 

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46 minutes ago, PHM said:

That's my approach too--assume full depreciation the moment I own the boat. If that scares the heck out of me, then I can't afford the boat. I realize that doesn't work for everybody though. 

Went sailing today and completely forgot about covid for a couple of hours. Priceless. 

We actually paid the 15 year boat loan off!  3 years ago.  So it can work.

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Financing (even of boats) certainly has its place when used appropriately and wisely. Life is short, and you've had 18 years of enjoying your boat. I have lots of respect for all the different ways that people make work for them to indulge the passion that we all share.  

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23 hours ago, Fah Kiew Tu said:

Borrowing may well be fine if you're in a nice secure job and have a good cash reserve in case things go to shit.

We financed our first "expensive" boat precisely because I preferred to keep the cash I could have paid for it as additional reserve for a family emergency or loss of job. I have good credit and borrowing was cheap. It's all about being smart about it. Boat loans at 15% don't seem smart.

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On 4/4/2021 at 9:53 AM, fufkin said:

Paying cash for a house? That's a good one. Let me get my napkin and sharpie out and figure out if young first time buyers in my market will ever even own their house, or will have a hope in hell of coming up with even a downpayment without intergenerational lending.

In Toronto's market you aren't gonna get much more than a shoebox for less than 1.5 million downtown. There is a mortgage stress test by law that calls for around 20% of purchase price as a downpayment as the first main hurdle to clear.

So now we're talking about having 300k loose change lying around for a young couple with kids to be able to pay for the privilege of entering a mortgage that they'll probably not pay off for a very very long time, if ever. Suppose a healthy income of 200k a year. If that's not dual income, shave off close to half for tax and your left with 100K a year living expenses for a young family of 4.

Living in the big city isn't cheap. I'd challenge that young family to put away 10-20k a year savings. That's 10 years of diligence to not even qualify for a basic starter mortgage.

Of course, you can always move out of such an expensive market, or commute from a cheaper one if your income is tied to said market.

Not passing any judgement, but just noting that in this market at least, paying cash for a home is a pipe dream for all but a very, very small minority. Once you get into the luxury market, cash purchases ironically might actually be more common.

In this real estate market a cash purchase pretty well means money laundering.

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One consideration on financing is intended use.  If you can buy a mostly ready to go boat at or below market and are able to finance with a low rate then go cruising for several years and sell after it makes sense.  Any loss is the same regardless of finance or not, the big costs are annual moorage maintenance upgrades etc.  If the boat goes right into use these will be minimal. And the duration is short enough interest will not be bad.

We have met a few families doing something sort of like this.

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20 hours ago, SloopJonB said:

In this real estate market a cash purchase pretty well means money laundering.

We prefer to call it "Investing" in the Vancouver market. There is no money laundering. Pay no attention to the ties between government and developers behind this curtain...

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19 minutes ago, Zonker said:

We prefer to call it "Investing" in the Vancouver market. There is no money laundering. Pay no attention to the ties between government and developers behind this curtain...

We "invested" in the Victoria market. House is worth around 4X what we paid for it 25 years ago, which makes adding up the interest on the mortgage slightly less painful.

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Following Covid this time last year I thought the prices would drop. As a lot of comments here have noted, the opposite happened as many decided the best way to vacation locally was on a boat. From my enquiries, there is a Northern Europe Covid premium of about 30%. Southern EU is not as strong based on no-one can travel there. Still, from conversations with 2 brokers in the last week, a lot of people are buying boats sight unseen!

For what its worth, I have been doing a loose (approx weekly) track on boats for sale on Yachtworld. There is a lot wrong with this approach statistically, so please don't start on the lack of method here. I have tracked the overall "cruiser" category, plus a number of brands. Comparing July 10 last year to now;

-Cruiser category is down from 10,881 boats available to 8,283 (-24% approx)

-Beneteau and Jeanneau stock is down 1356 and 1107 to 949 / 843 respectively. (-40% and -24% approx). Hanse Xyachts etc also show similar trends.

-H Rassy, Discovery, Oyster and the more expensive blue water brands are largely unchanged.

...so lots less stock on the market = more competition for what's available. High end market remains much the same as before. The next month will show whether this volume will change, but I am seeing emails with a lot more stock coming back on the market. I am on the hunt if you had not worked that out :-)  However I am happy to wait out the madness I am seeing around Scandinavia on prices! 

 

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27 minutes ago, tallyho said:

Following Covid this time last year I thought the prices would drop. As a lot of comments here have noted, the opposite happened as many decided the best way to vacation locally was on a boat. From my enquiries, there is a Northern Europe Covid premium of about 30%. Southern EU is not as strong based on no-one can travel there. Still, from conversations with 2 brokers in the last week, a lot of people are buying boats sight unseen!

For what its worth, I have been doing a loose (approx weekly) track on boats for sale on Yachtworld. There is a lot wrong with this approach statistically, so please don't start on the lack of method here. I have tracked the overall "cruiser" category, plus a number of brands. Comparing July 10 last year to now;

-Cruiser category is down from 10,881 boats available to 8,283 (-24% approx)

-Beneteau and Jeanneau stock is down 1356 and 1107 to 949 / 843 respectively. (-40% and -24% approx). Hanse Xyachts etc also show similar trends.

-H Rassy, Discovery, Oyster and the more expensive blue water brands are largely unchanged.

...so lots less stock on the market = more competition for what's available. High end market remains much the same as before. The next month will show whether this volume will change, but I am seeing emails with a lot more stock coming back on the market. I am on the hunt if you had not worked that out :-)  However I am happy to wait out the madness I am seeing around Scandinavia on prices! 

 

I think you have pegged the general trend that we see here in the States too.  That's why I think this year is probably the right one for selling my Bene and picking up a blue water brand.

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On 4/3/2021 at 10:04 AM, Blue Crab said:

Sure. They're out there sailing and don't waste time on the internet like us.

COVID went up 2000% here in the last week.  I’m wasting away.......  :ph34r:

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