Prices are Not Going Down

In the last two days two major suppliers of resins and composites, AOC and Cooks Composites raised prices on key components in the building of FRP yachts and boats.  While the industry is struggling to stay afloat prices keep inching up making it harder for new boat and yacht manufacturers to keep new prices in check.  This is the second price increase for AOC this year, the last being in May 2010 and is a sign of the times.

Petroleum based products have no choice to get more expensive as the price of oil rises and while the economy (ours and the worlds) is still struggling the recovery is proceeding slowly with demand increasing and supplies dwindling and being controlled.

While this is not good news for new boat sales in the short term, it is positive for the sellers of private and corporate owned yachts and boats since it will drive the value conscious buyers to the pre-owned market.  As this market is consumed by sales and only small amounts of new boats are sold, eventually the supply and demand curves will cross firming up prices on pre-owned vessels and creating a stronger demand for new product.  Since there already has been considerable attrition in the new boat sector (and probably a bit more to come) there will be fewer options for the buyer of new product and will help stabilize new boat prices.  This will create opportunities all around, paving the way for new entrants in the manufacturing end of the industry and stabilizing the inventory and prices of pre-owned boats.

What does this mean for you as a buyer?  Now is the time to act with choices still plentiful and prices and value still strongly in your favor.  Give me a call, I can help.

Oh yes.  For those of you thinking about all those incredible and vast opportunities out there in repo boats I say this.  Proceed with extreme caution. Banks have not changed their archaic thinking and still hold the line on initial pricing while the product (which they generally assign to liquidators and never see themselves) sits deteriorating as they have meeting after meeting to decide what to do.  By the time they find and can all agree on reality, the boats are a real mess, most having been stripped and mistreated by the owner before the banks got them after which they are usually not kept up while being warehoused for resale.  The result is a boat that will cost you 4 to 10 times your best estimate to rehabilitate and your “incredible buy” turns into your worst nightmare.  There are of course, exceptions.  Product handled by reputable brokers for the lien holder and honestly represented can offer great value and we have seen some of those in recent months.  In all instances, these values involved a reputable broker or brokers representing the buyer and protecting their interests.  Again, give me a call, I can help.

In closing I offer this thought;

Go Cruising Now My Brother, It Is Later Than You Think!

Nordic Tugs announced that it will temporarily close its Burlington, Wash., manufacturing plant

Nordic Tugs announced that it will temporarily close its Burlington, Wash., manufacturing plant on Tuesday. Most employees will be furloughed, according to a company statement, but a skeleton staff will remain to field customer inquiries and maintain the plant to keep it prepared to resume production when business improves.

The action “has been forced by the ongoing effects of the Great Recession and the reluctance of customers to order new boats,” according to the manufacturer.

But there is more.  Rumor has it, there is a 54 at the shipyard which the customer did not accept and now the lawyers are involved. Nice boats, good company and another sad story.  Like most manufacturers their prices just were too high, forced up by the cost of goods, transportation, etc. (read oil price increases) and labor costs (read health insurance).  With  plenty of much less expensive used models on the market buyers are, and will continue, looking to the pre-owned market for value.  This trend explains the increase in activity and sales in the yacht brokerage business over the last ten months.

Nordic Tugs was founded in 1979 and builds tug-style yachts ranging from 26 to 54 feet that are sold through dealers in Europe and Asia, and across the United States.

We need listings on quality yachts.

The recent increase in sales activity has depleted our inventory of quality listings.  If you are thinking of selling, please contact me.

We will gladly provide you with a free vessel evaluation of what your vessel is worth in today’s market, based on recent sales, similar vessels currently on the market and recent offers on these yachts.

Reply below with your yacht information including length, year, manufacturer, power and location, plus any additional information you care to provide.Please include your phone number in case I need to contact you for additional information to provide you with an accurate evaluation.

George Davies gives Superyacht to Sail 4 Cancer

Marlyn

George Davies has long been associated with charitable giving and the team at Sail 4 Cancer were delighted when they were approached by Mr Davies regarding the donation of his 103 foot super yacht, Marlyn. Following consultation between Mr Davies and the Trustee Board it was felt that the greatest impact and benefit to Sail 4 Cancer’s beneficiaries could be gained by selling the yacht. The project was completed thanks to the generous support of Tim and Derek Jarman and the team at Luke Brown Yachts, who worked incredibly hard to find a buyer in one of the toughest economic climates.

The £185,000 realized from the sale of Marlyn has been allocated to Sail 4 Cancer’s 2011 respite activities, and will provide over 1,200 respite days for individuals and families living with cancer from across the UK. The respite opportunities will include UK riverboat holidays, spa days, overseas cruises and European activity holidays. As a small charity reliant on grass roots fundraising the donation has made a significant difference and has enabled Sail 4 Cancer to invest both in its internal systems and has also allowed the charity to recruit two more part time members of staff. By making these strategic investments the money will make a lasting and ongoing difference to the charity and its beneficiaries.

Read the full story here.

We need listings on quality yachts.

The recent increase in sales activity has depleted our inventory of quality listings.  If you are thinking of selling, please contact me.

We will gladly provide you with a free vessel evaluation of what your vessel is worth in today’s market, based on recent sales, similar vessels currently on the market and recent offers on these yachts.

Reply below with your yacht information including length, year, manufacturer, power and location, plus any additional information you care to provide.Please include your phone number in case I need to contact you for additional information to provide you with an accurate evaluation.

Coast Guard’s tall sailing ship Eagle arrives in Port Everglades

The only square-rigged sailing ship still in active government service, the Coast Guard’s Eagle, was chased into Port Everglades Thursday afternoon by the approaching tropical storm.

The 295-foot-long vessel was to have made a majestic entrance into Port Everglades on Friday morning for a visit. But Tropical Storm Bonnie altered that schedule.

Called “America’s Tall Ship,” the three-masted Eagle boasts more than 23,500 square feet of sail and six miles of rigging. It sails each summer from its homeport of New London, Conn., on training exercises for Coast Guard officers.  If you are in the area, stop by and see her!

Florida boat sales tax cap now in effect

FOR SALE - 1982 36' Grand Banks

In what amounts to a major victory for Florida’s marine industry, a measure limiting the sales-use tax on boat purchases has   become law. Florida Governor Charlie Crist signed the larger Jobs for Florida Bill, CS/SB-1752, which contains the Florida Boat Sales-Use Tax Cap legislation on May 28, 2010. The $18,000 Boat Sales and Use Tax Cap  effectively brings Florida’s boat dealers and brokers into parity with their competitors in other states and nearby countries, where sales taxes on boats have been far lower.

The Boat Sales-Use Tax Cap limits the 6-percent Florida state sales tax on a boat purchase or the use tax for currently owned vessels to $18,000, helping Florida save marine industry jobs and, ultimately, increase sales tax revenue.  Passage of the cap is expected almost immediately to begin invigorating Florida’s vital marine industry by helping to stimulate boat sales and encourage boat buyers and current owners to register, keep and use their watercraft in the state.

Welcome

Hey there!  Thanks for checking out this collection of my insights on the yacht industry as we know it today.

This blog is my outlet to share and connect with you both personally & professionally. Conversations are better with your two cents so please comment.

For as early as I can remember my dreams always involved the water and boats and that has never changed.  Knowing that helps remind me that everyone I deal with, whether buying or selling, is just working on their dreams.

I pride myself on the fact that in my 30 plus years in the business I have never “sold” anyone a boat.  Instead, I have helped thousands of people buy the right boat for them.

The purpose of my blog is to help others who love the boating lifestyle as much as I do gain inside information about the current market, what to avoid and answer any questions you may have.

Thanks for stopping by!