Advice from Ryan Miller of Latitude Yacht Brokerage and Matt Leduc of Fleet Yacht Sales
2013 Market Stats & 2014 Predictions
The National Marine Manufacturers Association (NMMA) recently reported that the U.S. recreational boating industry
will continue its post-recession climb. “The housing market has improved, consumer confidence has steadily increased the last two years, and consumer spending is on the rise—all factors that are helping to fuel stable growth for the U.S. recreational boating industry...In addition, we’re seeing more and more Americans take to the water, as our participation numbers are at an all-time high—88 million Americans went boating in 2012. This indicates that with experience on the water comes an interest in life on the water and the subsequent purchase of a boat,” noted Thom Dammrich, President of NMMA.
YachtWorld.com, a global brokerage sales database leader, research concurs; they report 2013 boat sales increases in both sail (up 5%) and power (up 6%) and sales were the highest since 2007, in both volume and value.* In 2014, NMMA expects that recreational powerboat sales will continue to grow another 5-7 percent….and sustained growth into 2016.
*The Q4 2014 YachtWorld Market Index, U.S. Edition, Yachtworld.com
2014 Providence Boat Show Recap
“The Providence Boat Show was the best I’ve seen in years,” said Ryan Miller. “The show days were filled with exciting presentations and activities for the whole family. The highlight of the show was the Center Pavilion, which hosted fun displays and great presentations culminating in a sold out attendee/exhibitor party on Friday night. At Latitude we noticed an increase of buyers asking the right questions. In talking with the show staff, space was sold out well in advance, ticket sales were up a whopping 20% over last year, and there were eight sailboat dealers present, at a show that typically showcases mainly powerboats.” Current New and Brokerage Boat Inventory Issues “The past several years have not only affected boat buyers and sellers, it has also impacted boat builders and how they sell boats into the current fleet,” said Matt Leduc. “In the past, dealers were required to have one of every model in stock on the dealership property. The economy has proven that sales model does not work. Dealers no longer carry the inventory they once had.” This directly affects boat buyers and what they can see, touch and feel at boat shows and the dealerships. “Even so, the best
place to see the most extensive new or used boat inventory is at the dealership or brokerage,” continued Leduc. A boat buyer’s time is very valuable. A good boat sales company recognizes this and does its best to be sure that as many boats they have for sale are as close by as possible. “When someone comes to look at boats, to be able to show them five or more in one location or within 15 minutes of each other is a huge advantage. Boat shows do work and are great to make a first impression and contact, but there is a boat show every day at the dealership and more boats that could be your next one.” The supply of late model used boats is very low due to the lack of new boat sales in 2008-2012. This inventory shortage is a huge problem that faces buyers searching for a late model used boat. You could get lucky and find one, but what is the condition or price? The other options are to purchase brand new or an older model nearing the 10-year-old mark. This problem has hit the new sailboat buyer the hardest. “Boatbuilders have put much, time, effort and money into the larger boat line (40 foot +) and have forgotten the 28-34 foot market. These late model boats are even tougher to find. All of the Tartans, Sabres, Pearsons and Cape Dory’s that were so popular in the ‘70s, ‘80s, and early ‘90s are getting old. They are still great boats but the market for them is getting smaller every season. Not many buyers in the current market want a project boat. They want to show up and go sailing. Even if someone does purchase a 20-25 year old boat, when it comes time to sell her, she is now over 30 years old,” commented Leduc. “All the more reason to find a boat in great condition and keep it in great condition.”
Importance of Picking a Buyer’s Broker/Agent
In addition to viewing boats and gear, boat shows are a great time to interview brokers and find one that you feel c-comfortable working with. Are they easy to talk to? Do they know their stuff? Are they selling you, or do they understand what you want and want to help you with your purchase?
Surveying in the Winter
A Decommissioned Systems Escrow Holdback Agreement to a Purchase and Sale is very common in our area. This document
protects all parties in the purchase process. Understanding this agreement is extremely important and sets the expectation when all of the systems aboard cannot be fully tested in the off-season. A sea trial is part of the survey process. It is not just to feel the boat and see if you like how she handles. It is to fully test the engine under a load and run up to temperature, test the transmission and see the rig under load.
If there is a problem found during survey that cannot be resolved with the seller, it is the buyer’s responsibility to put the boat in the condition she was found. There is a smart way to go about the survey process, so as not to over-extend the survey budget. If the boat is out of the water, it can be surveyed 90% of the way. This should give you a good idea of what you are getting into.
Time is of the Essence
Although we all think the winter lasts forever, the sailing season comes on fast in the spring. No one wants an improper survey. If the conditions do not permit, rescheduling to another time will need to be agreed upon by both parties. Moving through the purchase in a timely manner is beneficial to both buyer and seller. If the sale falls through, getting her back on the market ASAP helps the seller. The buyer gets back into the market before all the good ones that are priced right are sold.
Spring and Summer are Fast Approaching. Are You Ready?
“Many people are aware that there is no sales tax on boats in Rhode Island but also just as important is the no sales tax
on service. The Ocean State offers no tax on the summer or winter storage of your boat but that also includes any work you have performed,” said Miller. The first weekend of May (May 3-4, 2014), is the Rhode Island Boat Show. Spanning four locations, the show opens up different parts of Narragansett Bay to showcase what that town and marina have to offer. Each location has multiple area exhibitors with boats on display in the water and on land. For more information, check rhodeislandboatshow.com. Summer in Southern New England is a great time to get out and explore the coast and see what it has to offer. Nearly every weekend is full of events and activities. “If you are thinking of buying a boat for this season, there is time to shop and equip your boat in time for Memorial Day Weekend,” states Miller. “Time on the water is what you make of it, so please pick up your Windcheck Magazine monthly and check the Calendar of Events to make sure you are not missing out!” WindCheck will be running other brokers’ tips in coming months, so check back.