Have used boat prices peaked?

[BlkGS]

This is one of the reasons that I'm hesitant about putting a deposit on a new boat. While I love the new AR220's, if I can get a lightly used AR250 for about the same money, I may go that route instead.

The other is that I still can't definite decide what I want to do with my money - do I buy a larger, more expensive boat or a smaller, less expensive boat AND buy a small camper?

Jim

The answer here is easy. Big boat AND big camper.

 

[HangOutdoors]

I saw an ad for the return of ARMs like a year ago and said "thats a really bad sign". ARMs are the canary in the mine for the supply of semi intelligent buyers evaporating. It's the mortgage equivalent of "I'm a Nigerian prince and will give you million dollars to let me use your bank account to bring money into your country".

ARM's are strong products if used correctly and for the right reasons. 1/1 ARMs are nasty. The 6 month LIBOR ARM is the kiss of death. 3/1 and 5/1 ARMs are great products if you need them. For instance I purchased a home with a 3/1 ARM in the early 2000's. It had an adjustment cap of .25% per year with a Max cap, which they all have, of 4% over the life of the loan. I planned in being in the house for 3-5 yrs. The rate was 5.125% and 30 yr fixed where in the mid 7% range. I let it adjust once and we upgraded and got a bigger home in year 5. Didn't plan on staying there long and to qualify at the time I need the lower interest rate/Payment to make it happen.

If you plan on paying off your home over 3-7 yrs ARM's are fantastic, if the spread is there and if the numbers make sense. Getting on an ARM and holding it long term or without a specific plan will hurt financially alot.

I wan in Mortgages back then and worked for Mortgage Companies so I was pretty in tune with the programs, derivatives and lending.

 

[Coult45]

This is one of the reasons that I'm hesitant about putting a deposit on a new boat. While I love the new AR220's, if I can get a lightly used AR250 for about the same money, I may go that route instead.

The other is that I still can't definite decide what I want to do with my money - do I buy a larger, more expensive boat or a smaller, less expensive boat AND buy a small camper?

Jim

I vote for boat and camper. The camper comes out when the snow melts, gets parked again when the ice melts and the dock goes in, then comes back out for a few months when boat gets put up for the winter. The boat can't get me to Acadia, Yellowstone, etc...and the camper sucks for wakeboarding.

 

[HangOutdoors]

You know what I find humorous?

When I see listings that indicate, "I don't have to sell my boat, but I am listing it for MSRP + taxes + fees + all the modifications I did....... If no one is interested at this ridiculous price, please don't send me low offers, I will just keep it, I don't have to sell it! (My lack of urgency should also support the ridiculous price I am asking). It is one of a kind, you can't find them and if you order one it may take a year"

Translation...

"I bought a boat, don't like it or don't use it or spent way to much money and can't afford it. It would be awesome if someone would give me everything I put into to (including gas) it so I don't lose anything and I feel good about myself again."

I foresee these boats at a discount next year......

 

[mwalker4]

I saw an ad for the return of ARMs like a year ago and said "thats a really bad sign". ARMs are the canary in the mine for the supply of semi intelligent buyers evaporating. It's the mortgage equivalent of "I'm a Nigerian prince and will give you million dollars to let me use your bank account to bring money into your country".

ARMs aren't inherently bad. When there is a big enough difference in rates they are correct way to go if you need to buy. Yes, I wouldn't push my ratios quite as far with an ARM. It's the 3 2 1 buy downs and interest only loans which signal huge issues. They might be illegal now.

As for used boats, there is not enough blood in the water yet. Looks like the end of next summer people should be truly desperate. The fed is now on the job.

 

[BlkGS]

You know what I find humorous?

When I see listings that indicate, "I don't have to sell my boat, but I am listing it for MSRP + taxes + fees + all the modifications I did....... If no one is interested at this ridiculous price, please don't send me low offers, I will just keep it, I don't have to sell it! (My lack of urgency should also support the ridiculous price I am asking). It is one of a kind, you can't find them and if you order one it may take a year"

Translation...

"I bought a boat, don't like it or don't use it or spent way to much money and can't afford it. It would be awesome if someone would give me everything I put into to (including gas) it so I don't lose anything and I feel good about myself again."

I foresee these boats at a discount next year......

I think your translation is off some. They may just be selling to maybe turn a profit. If they can turn a profit, it's worth selling, if not, they keep it.

I'm sure some of them will be discounted next year as the economy worsens, but that's likely just a result of poor policy rather than the owners or boat pricing.

 

[HangOutdoors]

I think your translation is off some. They may just be selling to maybe turn a profit. If they can turn a profit, it's worth selling, if not, they keep it.

I'm sure some of them will be discounted next year as the economy worsens, but that's likely just a result of poor policy rather than the owners or boat pricing.

Some try and get a profit, but I see ALOT of family purchased boats going up for sale, especially around here. You can tell by looking at their previous posts on facebook during their boat journey. Then after a day or two they start whittling down the asking price. Smacks of fear/desperation. Used boat prices are coming down and the Economy is having issues with inflation moving up still. Then humorously you see the words "Dropping price, looking to get into a larger boat" on a lot of them. Same pattern same tune. I guess use the marketing that works.

 

[adrianp89]

I think your translation is off some. They may just be selling to maybe turn a profit. If they can turn a profit, it's worth selling, if not, they keep it.

I'm sure some of them will be discounted next year as the economy worsens, but that's likely just a result of poor policy rather than the owners or boat pricing.

Agreed. I would sell something if I could make a hefty profit. I love my golf cart but if someone offered me 13k I’d take. I’ve been loosely offered 100k for the 252 (last year), and if it didn’t generate income for me I would have taken it seriously.

 

[HangOutdoors]

I wouldn't mind getting a project Yamaha to work on for the Brother In Law. I keep hunting around for something that needs work or is pretty beat up, etc. Hence the reviewing of boat listings.

 

[I_squared_r]

A lot of boats are for sale, but they're not really priced to sell.

2018 Yamaha AR240 that I was looking at:
NADA Average retail: 60k
NADA Low retail: 53k
Actual listed price: 60k

They're mostly listed at average retail which isn't a good expectation because the season is ending, interest rates are rising, and we're likely heading into a recession (or in one already). The motivated sellers are starting to cut their prices and maybe it's possible to get one at low retail 53k. In my opinion it's still high, but I'm starting to think that these inflated prices are here to stay because Yamaha has increased their prices substantially. The same can be said for cars or any other product: the manufacturers aren't going to cut prices when supply chains return to normal. If unemployment begins to rise then the dealers may start to cut prices, but I don't think they have a lot of room to do meaningful price cuts.

If I can get a clean 2016+ AR240 with galvanized trailer for 50k then I'd probably buy it. NFFCU still has low rates, 4.49% on a 10 year boat loan, which isn't far from CD rates: (capital one 360 has 5yr at 3.25%). I could sell my AR192 and invest that money. Or keep the AR192 as a rental and charter the AR240.

The other option is to keep my AR192 and save my money for when home prices cut substantially and take a 7%+ mortgage.. Hope to survive any recession related unemployment.. And then refinance when the fed reserve starts cutting rates in the future. This is all very speculative and I think the safer option is to start renting boats as a side hustle.

 

[HangOutdoors]

Prices will be driven, I think, when the spring gets here and supply and demand level out, basically. IF there is new available inventory then used prices will feel downward pressure. Demand for boats will be the second component. The third component will be rates.

@I_squared_r Personally, being a boat owner, I would most likely consider a nice used, fairly priced option for an upgrade. Unless a new boat gives options that I must have or need.

 

[BlkGS]

ARMs aren't inherently bad. When there is a big enough difference in rates they are correct way to go if you need to buy. Yes, I wouldn't push my ratios quite as far with an ARM. It's the 3 2 1 buy downs and interest only loans which signal huge issues. They might be illegal now.

As for used boats, there is not enough blood in the water yet. Looks like the end of next summer people should be truly desperate. The fed is now on the job.

Disagree. I think an ARM is only reasonable if you're effectively paying way over it anyways. An ARM is effectively a bet against the bank on interest rates going lower. They're giving you a discount now to entice you, if rates go down, you win, if they go up, you lose. But banks don't (typically) make bad bets, they offer ARMs when they're confident rates will be going up and they're going to win. So unless you know something they don't (ex: paying off a 15 year note in 5), they are Inherently bad.

Especially when you remember the whole point of an ARM is to sell someone a house they can't afford now on the promise that they'll be able to afford more later on.

 

[BlkGS]

Agreed. I would sell something if I could make a hefty profit. I love my golf cart but if someone offered me 13k I’d take. I’ve been loosely offered 100k for the 252 (last year), and if it didn’t generate income for me I would have taken it seriously.

Do you rent your boat out? What's the liability insurance for something like that run?

 

[mwalker4]

Disagree. I think an ARM is only reasonable if you're effectively paying way over it anyways. An ARM is effectively a bet against the bank on interest rates going lower. They're giving you a discount now to entice you, if rates go down, you win, if they go up, you lose. But banks don't (typically) make bad bets, they offer ARMs when they're confident rates will be going up and they're going to win. So unless you know something they don't (ex: paying off a 15 year note in 5), they are Inherently bad.

Especially when you remember the whole point of an ARM is to sell someone a house they can't afford now on the promise that they'll be able to afford more later on.

I'll leave it at disagree. But if someone is reading this string who needs to buy a home, they should do their research and include ARMs in their research.

 

[Bluewater272]

Considering, let alone recommending, an ARM in this environment is simply unconscionable. Interest rates will rise, property values will fall. Values are already dropping in HCOL areas, fast, and it will continue to spread.

 

[Jim_in_Delaware]

The answer here is easy. Big boat AND big camper.

Ain't gonna happen!

I'm 62, recently retired, and don't plan to wait long on any big ticket purchases. Want toys that my wife and I can enjoy now.

Jim

 

[Jim_in_Delaware]

I vote for boat and camper. The camper comes out when the snow melts, gets parked again when the ice melts and the dock goes in, then comes back out for a few months when boat gets put up for the winter. The boat can't get me to Acadia, Yellowstone, etc...and the camper sucks for wakeboarding.

I agree.

The camper that I am actually thinking about is a small toy hauler. We could take some of our toys with us and since I am now retired, go whenever we wanted.

Jim

 

[Jim_in_Delaware]

You know what I find humorous?

When I see listings that indicate, "I don't have to sell my boat, but I am listing it for MSRP + taxes + fees + all the modifications I did....... If no one is interested at this ridiculous price, please don't send me low offers, I will just keep it, I don't have to sell it! (My lack of urgency should also support the ridiculous price I am asking). It is one of a kind, you can't find them and if you order one it may take a year"

Translation...

"I bought a boat, don't like it or don't use it or spent way to much money and can't afford it. It would be awesome if someone would give me everything I put into to (including gas) it so I don't lose anything and I feel good about myself again."

I foresee these boats at a discount next year......

I suspect that some of these boats were probably bought with no money down and some owners will find themselves underwater on the loans as boat prices drop.

Jim

 

[BlkGS]

Ain't gonna happen!

I'm 62, recently retired, and don't plan to wait long on any big ticket purchases. Want toys that my wife and I can enjoy now.

Jim

Think of it this way, of you don't buy them, your kids are just gonna want to inherit money. Spend it before they can.

 

[BlkGS]

I'll leave it at disagree. But if someone is reading this string who needs to buy a home, they should do their research and include ARMs in their research.

My perspective, people who don't have a very clear situation that they have mapped out that an ARM works for them should not get an ARM. If people are doing it to afford a house they can't normally (which is typically the case), they're going to get screwed.

Anyone for whom an ARM is a viable.option would not be on here reading this and taking any of it into account, because they'd be far above expert level. The 28 year old guy I work.with who needs to move out of his mom's and has a mortgage broker who told.him an ARM would let him buy something now and bank on.future earning potential, he'll get screwed.