The Supply & Demand Crystal Ball

Everyone is well aware the market for boats is 100% a buyers market. Has been for the last 2-3 years and probably will be for some time to come. Even more so than the housing market boats are being sold all over the country and world as one 340 Sea Ray is the same as any other except for colors and subtle options. Holding up a crystal ball and looking 1-2 years ahead an interesting cross road can be seen.

The brokerage and used boat market has kept many new boat dealers from floundering and consumers have been going after well priced clean brokerage boats albeit cautiously. In 2008, directly in 2009 and most noticeably in 2010 tremendous production cuts by new boat manufacturers where put in place to stop overhead and map a plan for surviving the downturn. Simply put there will be a huge gap and shortage of any boats with 09’ or 10’ hull ID #’s. So let’s skip ahead to 2012 and 2013 when the economy may be inching slightly higher, unemployment rates declining, and those small green chutes becoming a bit more fertile. At least we can hope this is the case.

Boaters in 2012 and 2013 will face an interesting dilemma. You will likely not be able to find 2009 and 2010 brokerage or low hour used boats. We will run head on into a classic supply and demand economic argument. Demand will be there but supply will be almost non existent. Buyers will face one of two choices:

1)      Purchase New (if you go to any recent boat show it is shocking how new boat prices continue to shoot higher and higher. It may be petroleum cost, or paying for advances in technology but in most cases boats over 28’ seem to be moving up in price past the reach or LOGIC of most buyers. There will forever be folks wanting to buy new, to be the only person to have slept in that berth etc. But when armed with logic and research the majority of buyers will reach the conclusion of “I can pay $295,000 for a 33’ gas I/O boat that is new for 2011, or look at 1-3 year old ones”. SEE LAST PARAGRAPH

2)      Purchase Used (right now we are starting to see the issue discussed in the closing paragraph. While we are still in a buyers market once the prices hit the right level many of our listings are having 2-3 offers arriving at the same time. Boats not priced right are still seeing ZERO calls or emails yet at the same time boats that are have people fighting over them.

So instead of buying that $295k new 33’ you set out to find a low hour clean 2008-2009 only to find there are none available. This dilemma is going to create a supply and demand crossroads. Some say it will be the harbinger for turn around in the new boat market, some say it will drive used boat prices higher. I sense it may be a bit of both but more than likely the used boat market will continue to win and 2005-2007 boats may become hotter sellers and demand may tick prices up slightly. I think the sting and shift in mindset of the consumer from this economic peril will still make many stop in their tracks from buying new unless manufacturers can find a way to hold or reduce cost of brand new boats. If you’re a buyer and see a clean well priced brokerage boat, don’t turn around as someone may be right behind you. It’s still a buyers market but when you see one you love you better grab it for they may be hard to come by.

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