The Boat Market Bubble is bursting...

[typhoon]

50K over listing price in CA gets you squat. I know a family that lost out on 4 homes before offering 90K over. They got their home. Crazy here.

That is nothing compared to Florida. The house next to me sold last month after 4 hours on the market, 150K over asking price!

 

[suke]

Exactly the same here.

We want to move NOW, and have over $100k of equity in the house. However we have some debt remaining, and are worried if we buy into another house that is double the sell price of ours, by rolling our $100k equity over to it, we'll be at or near upside down if the market falls. Then we're "stuck" in a house that is expensive to own and maintain, with no equity and a big payment. If we stick it out where we are, we know what the house condition is in, we have a TINY payment, and it's not BAD, it's just not what we want anymore.

We have been considering doing a refi to access that current equity, and improve the house. Fight off the loss in equity with improvements. I doubt we'll lose $100k worth of value on a $300k home, but we might lose $50k in equity. Might as well access what we can now, and have a nicer house to "weather the storm" in, so to speak.

Final thought......being an adult is difficult. Making this level of decision that so closely affects your personal life is.....well.....damn hard.

That was our original thought, but we're holding out now. We built our house about 15 years ago. We've maintained it, but the styling is welll........dated. It really doesn't make sense to take 100k and totally refit this house in our current neighborhood. So we're going to hold out, fix some things to make it sellable(replace the carpet, investigate some small fixes, etc) and move on next year. Hopefully finding someone that did decide to update an older house that's largely ready to move into. We want more land, and with new builds they just level all the trees and pack 3500 sq ft houses on .12 acres. We're looking for 1-2 acres where I can build a shop/pole barn to keep the boat home. Now that I perma WFH we can move out a little bit. If I had to go into the office from time to time the hour long commute wouldn't be all that bad.

Also have thought about when we do sell taking some of the equity and paying off all of our student loans and literally just have our house as our only obligation. Truck will be paid off in January, and boat likely next summer. We don't have any CC debt or anything like that, and our other vehicle is paid off.

 

[2kwik4u]

Nobody in the south is going to comply with a lockdown again, or listen to Dr. Fallacy “Wearing a mask is more likely to harm you than help you. You need to wear a mask to protect others. You need to wear two masks. There’s no evidence that wearing a mask does any good. Closing the borders is a bad idea. Closing the borders is a good idea. 3 million will die. 60,000 will die. 300,000 have died. It wasn’t man made. It was man made. Children can’t spread it. Children can spread it. A vaccine won’t be ready in less than 24 months, and if it is it won’t be safe. Everyone needs to take the vaccine.” ……etc, etc, etc. How many of you would still have your jobs if you sounded like this? The only thing more inaccurate than Fauci, was Yamaha dealer delivery promises. But about half the population still believes the old “I’m from the government, and I’m here to help”.

I'm in R&D.....this is literally how about 90% of my projects go. As time moves forward, my knowledge grows, and the information I give out to others changes. When faced with new information, one should always reconsider their position; regardless of topic or previous position.

 

[2kwik4u]

That was our original thought, but we're holding out now. We built our house about 15 years ago. We've maintained it, but the styling is welll........dated. It really doesn't make sense to take 100k and totally refit this house in our current neighborhood. So we're going to hold out, fix some things to make it sellable(replace the carpet, investigate some small fixes, etc) and move on next year. Hopefully finding someone that did decide to update an older house that's largely ready to move into. We want more land, and with new builds they just level all the trees and pack 3500 sq ft houses on .12 acres. We're looking for 1-2 acres where I can build a shop/pole barn to keep the boat home. Now that I perma WFH we can move out a little bit. If I had to go into the office from time to time the hour long commute wouldn't be all that bad.

Also have thought about when we do sell taking some of the equity and paying off all of our student loans and literally just have our house as our only obligation. Truck will be paid off in January, and boat likely next summer. We don't have any CC debt or anything like that, and our other vehicle is paid off.

Yeap, same here. Only been 5 years though. We want a little more land since we're only on 1/4 acre now. Would like to be on a full acre or so, for the same reasons. We also want bigger rooms. Not really any MORE rooms, just bigger ones. The youngest is in a room that is 10x11, and it just feels really small in there with a bed, dresser, and a chair. Something closer to a 13x13-ish room for the boys would be nice.

We're on the other end of the debt spectrum. Had a couple rough years in there, made a few missteps along the way and are now aggressively paying down credit card debt. Gonna take a few more years to get out from under that, but we're making progress. This is the first time in my life I've made the decision to stay put instead of move ahead based on debt. Want a balance sheet that isn't so lopsided before we move along.

 

[AZMark]

Yeap, same here. Only been 5 years though. We want a little more land since we're only on 1/4 acre now. Would like to be on a full acre or so, for the same reasons. We also want bigger rooms. Not really any MORE rooms, just bigger ones. The youngest is in a room that is 10x11, and it just feels really small in there with a bed, dresser, and a chair. Something closer to a 13x13-ish room for the boys would be nice.

We're on the other end of the debt spectrum. Had a couple rough years in there, made a few missteps along the way and are now aggressively paying down credit card debt. Gonna take a few more years to get out from under that, but we're making progress. This is the first time in my life I've made the decision to stay put instead of move ahead based on debt. Want a balance sheet that isn't so lopsided before we move along.

Both of you should sell and rent if you know you want to move in a year or two. If you believe your home is substantially overvalued and getting that money will change your families lives for the better then a temporary place at a high rent is worth the trouble and won’t eat up that much of the equity you cashed out.

Taking a loan on inflated equity doesn’t get you ahead at all.

That said, it all depends on the market where you live. If you made that bet here any time in the past 12 years (when many were saying our price growth was unsustainable) you’d have lost.

 

[suke]

Yeap, same here. Only been 5 years though. We want a little more land since we're only on 1/4 acre now. Would like to be on a full acre or so, for the same reasons. We also want bigger rooms. Not really any MORE rooms, just bigger ones. The youngest is in a room that is 10x11, and it just feels really small in there with a bed, dresser, and a chair. Something closer to a 13x13-ish room for the boys would be nice.

We're on the other end of the debt spectrum. Had a couple rough years in there, made a few missteps along the way and are now aggressively paying down credit card debt. Gonna take a few more years to get out from under that, but we're making progress. This is the first time in my life I've made the decision to stay put instead of move ahead based on debt. Want a balance sheet that isn't so lopsided before we move along.

Oh we did that CC rodeo. When we were getting ready to get married I was like OK let's share balance sheets. Now I knew she had a fairly substantial student loan debt as I co-signed on a bunch of them. However, did not realize she basically lived on CC's her whole time in college. Holy crap! Did that take a while to dig out of. I worked in the financial industry so was hyper vigilant against debt and paid for my college through scholarships and/or saving. It did take me 7 years to get my undergrad as I worked full time, but graduated with little to no debt. Maybe like a little 5k student loan for my last semester to not work and augment my savings to power through and get done.

 

[suke]

Both of you should sell and rent if you know you want to move in a year or two. If you believe your home is substantially overvalued and getting that money will change your families lives for the better then a temporary place at a high rent is worth the trouble and won’t eat up that much of the equity you cashed out.

Taking a loan on inflated equity doesn’t get you ahead at all.

That said, it all depends on the market where you live. If you made that bet here any time in the past 12 years (when many were saying our price growth was unsustainable) you’d have lost.

Our market is/has been going gang busters here for more than 2 decades. Everyone is relocating here due to hot job market, tons of great schools (universities included), and "cheap" housing/taxes compared to Northeast/out West.

So it'll never "crash". Even if the market totally collapsed at best we'd lose about 10% of the value today. We'd still be magnitudes ahead. We're hoping the market just slows a bit next year to move into a house we're good with for another 15 years.

Rent we'd lose money as a house our size would cost about $3500 a month in rent. We can't live in an apartment with all the equipment I have.

 

[Epsmith19]

I'm agreeing with you, but soon we have to stop comparing boats to homes.

For all of our lives, boats have depreciated and homes have appreciated. Sooner or later, folks have to realize that boats do not appreciate in value. And when that time comes, I am going to be a boat flipping MF for sure. My wife is going to lose her mind on the money I may spend. (ok, she won't let me, but I can imagine doing it)

I would love to know what financing co. has written the most loans on used boats....and take a short position. I think that in a yr or 2 there are going to be quite a few loans that are underwater, especially on 5+ yr old boats. When a big repair bill comes due many of those loans will be a risk of default.

The same could be said about the used car market

 

[yam240sx]

heres the reason boat market will not blow up ... the main reason the market came so hot was NEW boaters entering market .. many people who always wanted one and with lockdowns and public beaches ect everyone wanted to isolate on their own . and a boat is best way to social distance ! .. this is not going away . in fact will only get bigger .. add the rocket fuel of manufacture having trouble building boats for lockdown reasons .. EVERYONE WILL WANT A BOAT

 

[anmut]

Like the famous economist John Maynard Keynes said, “the markets can remain irrational longer than you can remain solvent.” So be cautious and flexible as market conditions evolve.

But also:

“Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.”
- Peter Lynch

 

[anmut]

heres the reason boat market will not blow up ... the main reason the market came so hot was NEW boaters entering market .. many people who always wanted one and with lockdowns and public beaches ect everyone wanted to isolate on their own . and a boat is best way to social distance ! .. this is not going away . in fact will only get bigger .. add the rocket fuel of manufacture having trouble building boats for lockdown reasons .. EVERYONE WILL WANT A BOAT

I think you're half right. Like anything new and shiny, you'll have a percentage of people that never knew they enjoyed boating, really love boating, and will continue to stick with it. Then you have the other side that bought boats simply because they had extra money and nothing to do. But with payments looming, storage and maintenance to think about, and inflated values being reported, they'll ditch out of the activity.

What I don't understand, mainly because I've never been upside down on a loan before, is how does it even work to buy a boat that's value is 70% of what's owed?

Like if I found a great deal on a Nautique, but the guy owed 40k more than it's worth, how do I resolve that and get the title for the boat? Does he have to take out a separate loan that doesn't have collateral attached to it for the balance? Sounds like a real cluster f.

 

[anmut]

I would love to know what financing co. has written the most loans on used boats....and take a short position. I think that in a yr or 2 there are going to be quite a few loans that are underwater, especially on 5+ yr old boats. When a big repair bill comes due many of those loans will be a risk of default.

The same could be said about the used car market

Now that's a good idea...

 

[mwalker4]

But also:

“Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.”
- Peter Lynch

Or, I've successfully predicted 10 of the last 2 recessions.

 

[biffdotorg]

Now that's a good idea...

I would love to know what financing co. has written the most loans on used boats....and take a short position. I think that in a yr or 2 there are going to be quite a few loans that are underwater, especially on 5+ yr old boats. When a big repair bill comes due many of those loans will be a risk of default.

The same could be said about the used car market

So many people taking out 10-15yr loans. That just kills me to see by itself. Let alone doing it on an over inflated price, that will tank hard easily within the first 5 if not 3 years.

 

[anmut]

Or, I've successfully predicted 10 of the last 2 recessions.

LOL do you write for Zerohedge?!

 

[BigN8]

That is nothing compared to Florida. The house next to me sold last month after 4 hours on the market, 150K over asking price!

I wish the Californians would stop moving to TX and screwing our market up here. I talked to a CA lady yesterday that paid $50k over for a house she never saw. Just her friend walking around inside as she Facetime'd her. Freakin insane. Then she goes on to tell me her parents just moved here, her sister moved here, and 5 of her friends all moved here from CA within the last 6 Months. That's 8 family units just from talking to one freakin person.

 

[Lawman25]

You are a fool if you think he couldn't get 4k above MSRP. There are a lot of people in this country who have plenty of money and if they want something they will pay a premier to get it.

Yeah but those people with all that money to throw around aren't buying 19ft boats either if we're being honest

 

[Mesa50]

I wish the Californians would stop moving to TX and screwing our market up here. I talked to a CA lady yesterday that paid $50k over for a house she never saw. Just her friend walking around inside as she Facetime'd her. Freakin insane. Then she goes on to tell me her parents just moved here, her sister moved here, and 5 of her friends all moved here from CA within the last 6 Months. That's 8 family units just from talking to one freakin person.

Same thing is happening in South Carolina. Lake houses have shot up 30% in the last year. I hear the same story from everyone moving here from the Northeast… “Our taxes were too high. City services were terrible. We couldn’t afford to run a business. There were too many restrictions”….. And then, in the same conversation, they tell us that we are doing everything wrong, and how much better everything was back home.

 

[HangOutdoors]

I wish the Californians would stop moving to TX and screwing our market up here. I talked to a CA lady yesterday that paid $50k over for a house she never saw. Just her friend walking around inside as she Facetime'd her. Freakin insane. Then she goes on to tell me her parents just moved here, her sister moved here, and 5 of her friends all moved here from CA within the last 6 Months. That's 8 family units just from talking to one freakin person.

Long as you keep em in Texas I will be fine I think Michigan is too cold for them.

 

[typhoon]

Same thing is happening in South Carolina. Lake houses have shot up 30% in the last year. I hear the same story from everyone moving here from the Northeast… “Our taxes were too high. City services were terrible. We couldn’t afford to run a business. There were too many restrictions”….. And then, in the same conversation, they tell us that we are doing everything wrong, and how much better everything was back home.

I understand. #dontnewyorkmyflorida is something I am seeing a lot.