Bump's World - February 2021
February 15, 2021
February 2021 almost completes a full year of the Covid pandemic. How much longer this will go on no one knows, but there is light at the end of the tunnel with the vaccine.
At New Wave Yachts we have averaged about 65 listings over the past 10 years. We sell boats and we get boat listings. Sometimes the number goes up or down a little but has always trended back to 65. We sell about 85 boats per year, so we turn the inventory about every 9 months. Some boats have sold quickly, and others lingered on the market well over a year.
For the first 3 months of the pandemic, it was hard to show boats and not much happened. Not only did we only sell a couple of boats, we got no new listings. In June things picked up and we began showing and selling boats. Usually by mid July it starts to slow down because most people have already purchased the boat they want for the summer. This year, boats kept selling at a pretty good pace. I did notice that we had gotten very few new listings and our used boat inventory was going way down. The selling continued into the fall and by the end of November we had really depleted our used boat inventory. New listings continued to come in very slowly. Boats were now selling that had been on the market for sometimes years. The stuff I thought might not ever sell, sold. Some of these listing were priced high for what the market had been but now people had little choice, so they had activity.
Our principal new boat builder Hanse Yachts continued to build through the pandemic but they had supply issues. Their order book was about the same as 2020 but the building process was more difficult, so lead times fell back. Usually, we can sell new boats into about the first of the year with delivery in early summer. Delivery times for some models are now well into the fall.
The boat business has always been a very supply sided industry. That means there is a lot to pick from and the buyer has leverage to negotiate a deal. This is especially true if you are not over picky. The more you narrow down your search for a boat the less options you have. If you say I want a 2001 Sabre 402 in blue with a Yanmar engine you might not have many options.
My real estate friends were always excited to get a listing, when I was excited to get a buyer. The real estate guy always said, relax once you get the listing the buyer will come. I said get me a buyer and I'll get him a boat.
When the inventories get this low, then there is upward pressure on pricing. Boat buyers are not used to upward pressure. Houses sell above the asking all the time, but not boats??
I lost 3 deals in the last 2 weeks because boats went under agreement before I could get my buyer to offer. They wanted to see the boat first. They had bought boats before and did not believe the market was that active. They also had less boats to choose from and had to travel distance to see them. Which also means extra expense in getting the boat here.
Why are we not getting listings?? Boats are about dreams. Most boat owner dream that one day it's all going to come together and I'm going on an extended adventure on my yacht. Mean while the yacht sits on a mooring or in a boat yard.
The pandemic reenforces the dream. I'm stuck at home but at least I got my yacht and I'm going to start planning that adventure. Live that dream.
I'm a dreamer too.
Please mail comments to me at Bump@newwaveyachts.com