Inventory Is the Mother of Invention. . .
Or to be more accurate, lack of inventory inspires creativity among boat buyers. Here’s what I mean. When there’s a great selection of used boats out there—boats that aren’t too old and in good condition—then boat shopping is easy. But when the going gets tough, the tough get going.
“The inventory of late-model boats is certainly declining,” says Roger Herd (below), director of sales and marketing for United Yacht Sales. “So I think now that we’re seeing a resurgence in buyers, it’s a strange scenario that we’ve not seen before.” What’s happened is this: Boatbuilders slowed production in the years since 2007, and so now the pipeline is lacking in boats built in the ensuing years—boats that would be the prime selection on the brokerage market as their owners move up.
The other thing that happened was a presidential election last fall. Regardless of who you supported in that election, the fact is the course of the nation for the next four years is more certain now. Whether you like the policies or not is irrelevant. For the next few years they’re going to be consistent—and the uncertainty markets abhor will be reduced. So buyers feel they know the score now, and that’s enough to get them back in the game.
But the game is different. “People used to say ‘I’m not buying something more than three or four years old,’” says Peter Schmidt (above, on deck), CEO and founder of United Yacht Sales. “But now people are looking at something that’s six or seven or eight years old. So while the inventory of good three- and four-year-old boats is dwindling, there wasn’t much to start with because there hadn’t been a lot of boats built. But if you go back into the mid- to early 2000s there were plenty of boats being built.”
Buyers are opening their eyes to what’s available. “The inventory is actually growing because people are more accustomed to buying a boat that may have 900 hours on it and be seven years old,” Schmidt says. “The price of new boats is up so people are expanding their search deeper into the market.”
And what’s happening when a buyer’s search yields results? “The other thing we’re seeing is that there isn’t as much of a drop in price at negotiation as there’s been in the last couple of years,” Herd says. Think more creatively and you may find yourself at that negotiating table.