Big-boat sales are leading the way

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The rally in yacht brokerage sales continued in March across the United States, with 2,574 boats sold, compared to 1,759 in February - not an unusual seasonal gain - but unit sales were also much stronger than March 2009, when 2,037 boats changed hands. According to reporting YachtWorld.com member brokerages, the total value of sales was almost double, with $326 million in sales this year versus $167 million in March 2009.

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Sales of the biggest boats brought in the greatest increases in dollar volume. The collective selling price of the 89 boats more than 55 feet that sold in March was $148 million, up 260 percent from the 51 boats sold in that size range a year earlier.

Bigger boats have led the surge in unit sales throughout the first quarter of the year on a percentage basis, as 520 boats over 45 feet have been sold compared to 363 in the first three months of 2009 - a 70 percent gain. The market as a whole is up 28 percent, with all size ranges showing increases of 25 percent or more.

This month, we look more closely at brokerage sales in one region, the Northeast, which includes the New England states and those parts of New York State not on the Great Lakes. Studying sales patterns, we find that of all boats recently sold in the U.S., close to 20 percent of them were sold in the Northeast; their total valuation was close to 10 percent. The region is often considered a strong sailing area, but while 21 percent of the boats sold nationally year-to-date have been sailboats, in the Northeast, only 19 percent of boats sold had masts.

Compared to the first quarter a year ago, brokers in the Northeast have sold almost 300 more boats, with 1,138 boats changing hands. That's a 34 percent jump, exceeding the national average by more than 5 percent. Total valuation grew as well by 40 percent from $52 million to $73 million, but this was a much slower rate than the national average.

Where the Northeast has come up short year-to-date is in its distinct lack of sales of boats over 55 feet. While more than 200 have sold nationally, only three have sold in the Northeast, six fewer than a year ago. On the other hand, they sold for a total of $4.3 million, collectively nearly as much as the nine boats sold in the time period a year ago.

In all other size ranges in the Northeast, sales were up 30 to 50 percent in the first quarter. And the middle of the market was especially strong, with 167 boats from 36 to 45 feet sold, up from 111 a year ago. That 50 percent increase in unit sales was matched by a 47 percent increase in valuation.

As indicated by an increasing average time to sell, a lack of buyers or unwillingness to reduce prices in the sailboat market would seem to have had an effect in the Northeast. The number of Northeast sales of sailboats is ahead of powerboat sales in the first quarter on a percentage basis - 38 percent compared to 33 percent. But the average time for those sailboats to sell is dramatically higher than it was a year ago - growing by more than two months, from 323 days in the first quarter of 2009 to nearly 400 days this year. In contrast, first-quarter powerboat sales averaged 268 days on the market, a 9 percent drop (26 days) from the first quarter of 2009.

This article originally appeared in the May 2010 issue.

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