Call Your Broker
By Jason Y. Wood
As world financial markets wallow in volatility, boat owners may again find themselves questioning their long-term plans for their boat. Start the search for the next boat? List the current boat and test the waters? The temptation to put the next move on hold until markets stabilize is a strong one.
“There’s a lot less water in the pond and lot fewer fish in the water,” says Joel Lipton, president of United Yacht Sales [(800) 897-2270; www.unitedyacht.com]. “With the yacht-brokerage business, there are fewer customers out there. You are seeing a pretty high volume of turnover in terms of brokerage boats but the value of the boats continues to drop.”
As production of new boats slowed, the brokerage market’s glut of quality inventory began to thin. “The bright spot is that in the last three years, very few new boats have been built,” Lipton says. “So the supply of good quality, late-model pre-owned boats is starting to dry up substantially. Three years ago, you could have found a 48-foot Sea Ray sedan bridge priced somewhere in the low- to mid-$300,000 range. Now you’re going to pay the mid- to high-$300,000 to low $400,000 range, to get the same vessel. Believe it or not there are just fewer and fewer of them out there. If it’s in good shape there are just not a lot of boats in that class to compete with it.”
John Weller of Northrop and Johnson [(561) 379-5431; www.nandj.com] sees a market being built on good foundations. “It’s nowhere where it used to be, but a lot of the boats that were really low-priced, desperate owners, a lot of that stuff got cleaned up in the last eight to ten months,” he says. “There are boats getting sold and it’s better than it’s been.”
Weller noted that it’s pretty quiet at the higher end of the market right now. “It’s affecting the super wealthy more in the attitude than whether they can afford something,” he says. “It’s more like With all this nasty stuff going on, do I really want to spend a bunch of money? It’s more mindset than capability.”
The fact is, no one can predict the future, and every boat owner’s case is different. Calling your broker and getting a sense of market value—both for what you have now, and what you want to move up into—may be a wise move.
“I am constantly advising our the brokers to tell their clients if they are serious about selling their boats, they must be very realistic with the price of their boats,” Lipton says. “In addition to that, they cannot describe the boat with rose-colored glasses on. It may have some blemishes here or there. Or it may not be in perfect shape. But you have to tell the market exactly what you’re offering, and the most important thing is to price your vessel realistically.”