Market review - are people still buying boats?
Posted on Apr 27, 2020
Posted on Apr 27, 2020
Life has certainly changed this year, but have boat sales been affected? Is it worth listing your yacht for sale right now in this market? Have prices dropped? Are there any exceptional deals that are too good to pass up? These are all questions that United Yacht brokers are regularly hearing from our customers. While current consumer confidence is shaky at best as the country recovers, the desire to unwind with your family by enjoying the water is stronger than ever.
John Peterson, one of United's top brokers in the world, had a client say it best when describing the current boating market conditions, "You think you're in the business of selling boats, but really you're selling happiness. And right now you're selling something that people can't get almost anywhere else." So true!
To get the full details right from the yacht brokers themselves, we asked our team to give us a report on what kind of activity, feedback, and sales they've experienced over the last few weeks.
Miami-based broker Juan Morillo lives and breathes the boating lifestyle. When asked about recent activity, here's what he had to say, "The first few days of this I thought the business would remain completely still for a few months. Since last week, I started getting some phone calls and I've had to organize showings, including a sea-trial," he said. "Just in the last week I've had a showing on a 74 Pershing, a 127 superyacht, and have a preview of a 80' Sunreef Catamaran. I've also helped a client submit an offer on a 42' Pardo we recently sea trialed."
Juan continued, "I believe that a good part of this rush to buy boats (at least for me) is the perception that right now is the time to get the best deals. I believe that some clients thinks that once the world opens everything will just go back to normal and prices will go up, so they can miss opportunities. The second part of this is that many clients basically have cabin fever. During these days, at least here in Miami, people that have boats have found them to be a relief. Being on a boat has become one of the few ways to find freedom for many. You can go out, spend the night with your family, and basically vacation close to home all while being responsible with social distancing."
For John Dial, this period has been very productive and busy. Here's what a 30+ year marine industry veteran had to say, "We have centralized our efforts in contacting our clients as we know they are sheltered in place and we want them to know they are not just numbers to us, but rather our friends as well as clients. When we call, we ask about their families and we laugh about our boating trips of the past and talk of the hopes for the future and how boating is the safest vacation they can have health safety wise with their family.
We just signed a contract for a $1.5 million Hatteras Motor Yacht last week. It was with a client that I had showed the boat to virtually prior to him coming to Miami to see it in person. We have done the same virtual showings for two other customers one which made an offer that was not accepted. But we have shown him several other boats and obtained a listing from him on his existing 118 that we sold him a year and a half ago. We have gone back to the basics of using the phone and calling our clients in conjunction with emails. We point out that this is an opportunity to buy as the last 8 years have been a sellers market and now it is a buyers market. The phone is always the best as person to person beat email non person every time."
A perennial "Top Gun" award winner at United, John Peterson has numerous clients at any one time. Here's what he had to say about his activity and his commitment to give back to the front line health care industry, "Activity has been slower, but I still have showings. I have offered my clients Virtual Boat Showings with Facetime and did two yesterday. I've had three showings this week, put two boats under contract, I have one survey on Wednesday, and another on Thursday. I've also tried to think outside the box! I offered a commission discount to first responders and health care workers."
Brian Franc is head of the Emerald Coast Division for United Yachts and has over 25 years of experience in the industry. "Since Good Friday, there has been a noticeable increase in calls, solid leads, and showings for my group of Brokers from the Panhandle of Florida, Alabama, and Mississippi. While the deals are not large we have 5 pending deals. One of my brokers had his best month ever in March before the "Stay At Home" orders for non essential business. In Alabama, as long as brokers were checking on the security of our boat listings there was never going to be an issue with following the state mandated orders," Brian said.
He continued, "There was a much higher percentage of leads from prospective buyers who were very serious about either viewing or buying a boat now. Ironically, many of these leads were of Physicians who I would imagine had extra time since they could not operate on patients due to elective surgery being postponed in many hospitals. In the neighboring states, such as Louisiana, I have clients just waiting to be able and travel to see boats in areas such as Florida. It certainly has helped that our weather has been mainly dry and pleasant and our typical start to the boating season."
Since 1994, Joe Guard has been in the marine industry and recently won the "Best of the Best - Most Deals In 2019" award with United. Here's what Joe had to say about selling boats in this current climate: "I had a client call me just the other day, sold his boat a couple of years ago. He asked how the market was - good time or bad? My response was that things were a bit on slow side with people's obvious concerns of the current situation and states still being on lock down, but phones are ringing and outside of not being able to get into marinas things are pretty good."
Joe continued, "After a very long conversation he came to the conclusion that it was time for him to buy another boat for his family of 7 and extend family of 9 so that they would have something to do over the summer because who knows how back to normal things are going to get. He has a house on one of the islands off the coast of Massachusetts and may need the boat to get his family back and forth and not be dependent on the ferry system that may limit passengers dues to social distancing. I have other clients looking to upgrade because "tomorrow isn't a guarantee" and they are saying it's time to buy the boat they want.
Matt Key is a Florida-native, avid tournament fisherman, and a knowledgeable yacht broker with United. Matt has seen good activity over the last few weeks despite dealing with the state's stay-at-home order. Here's what he had to say, "At the beginning of the Coronavirus, my phone went silent. I think many people couldn't believe this was happening and weren't thinking about buying a boat. In the last two weeks though, the need for boating is stronger than ever. I have added a new listing to the market, had 7 showings to 5 different clients, and am on the cusp of putting a boat under contract. My phone has been ringing daily with customers looking for boats. I believe we have already started to come out of this setback running at full speed!"
For over 30+ years, Matt Condon has used his passion for boating, fishing, and cruising to help his clients with their boating plans. Another fun fact about Matt - he has placed in the Top 3 in every major billfish tournament in the Gulf of Mexico and is an expert on sportfishing boats and motor yachts alike. Here's what Matt had to say about recent activity, "Initially, there was a shock and a dramatic drop in activity. But in the last 15 days I have received 3 purchase contracts and the activity level has picked up substantially. People are naturally drawn to the water, so I don't see the end of boating. Just the opposite; people are planning and scheming right now - trying figure out how they can get out of the house and into the great wide open again. Boating delivers that better than anything else."
Scott White is one of United's top brokers out of New Jersey and manages his own division. Scott's team is also the Hatteras and Cabo dealers for NJ. Here's what Scott had to say, "As the NJ Division Manager, I see an eagerness in clients and friends to get back to the water. Conversations, social media, emails with clients all point to what I believe will be an excellent buying and selling time once we are through the quarantine phase. Our NJ Team currently has 6 vessels in contract and yes we are showing boats."
Scott continued, "Private showings are being arranged. Our brokers open up the boats and turn on the lights, AC or Heat pending the day and then will get off the boat. We allow the prospective buyer to look all through the boat themselves and then we close up the vessel when they are off. We either then communicate from a distance or catch up via phone. Our phone is ringing daily with new prospects and the emails leads continue to flow in!"
Since the age of 19, Mordy Miltz has been involved in the marine industry from owning his own fishing supply company in the Northeast, to opening several yacht brokerage offices around the country, to helping to lead the new Front Runner center-console boats to success. Here's what Mordy had to say about the yacht brokerage market, "The yachting business is a sleeping giant waiting for the Covid-19 hysteria to subside, so we can back to business as usual. Prior to this health event, we were set to crush previous records, as the beginning of Q1 was on fire. With the stock market going through its own roller coaster I feel people are more cautious and are waiting it out as there is great confidence for a quick turnaround. The good thing is, we're not seeing the mass foreclosures or fire sales that we saw back during the recession. Currently, buyers and sellers getting very active, while at the same time getting impatient as cabin fever and anticipation are setting in to get through this, so we can conduct business as it was before this pandemic. The buyers are there, if you're looking to make a move, I wouldn't wait."
Mordy continued about his activity, "I showed a 64' Viking Yacht via FaceTime to a NY client that we made an offer on and we're still in negotiations. Sea trialed a 60 Hatteras for a client who wasn't able to come down, but most importantly busy keeping in touch with all my clients and showing them we are here to help in any capacity. The marinas in New York reopened last week so we are starting to catch up survey with the boats we contracted over the winter, as well as catching up on incoming listings now that they're moving towards the water. The phone is ringing, and we're busy. Inventory is still lacking as there are many voids in the market, as buyers are on the hunt for the right investment."
To sum up all of this feedback, boating is still the recreation of choice for many people and this passion for being on the water only grows stronger. With travel restrictions in place for many popular destinations, summer boating is going to grow substantially. If you are considering selling your yacht, we suggest contacting one of our yacht brokers near you or filling out our 'What's My Boat Worth' form online. United is committed to helping you grow in your boating lifestyle. Remember, it doesn't take becoming a billionaire to own a boat!
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