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Brokerage numbers are flattening out - Trade Only Today

Brokerage numbers are flattening out

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Early growth trend continued to fade in August; possible oil-spill effect shows up in Florida

For the second month in a row, yacht brokerage sales in the United States were roughly equivalent to the same month in 2009.

According to YachtWorld.com member brokerages reporting sales to the proprietary SoldBoats.com database, unit sales were nearly dead even with 2,743 boats sold (up three boats from 2,740 a year ago). Total valuation of boats sold dropped 4 percent, about $10 million, to $251 million, and most of that decrease came among boats over 55 feet, which were down $8 million compared to August 2009.

For the year to date, unit sales increased 14 percent, or 2,500-plus boats, and total valuation of sales is up 20 percent, or $370 million. Most of the gains came in the first four months of the year; since May, the sales patterns of 2010 have increasingly mimicked those of 2009.

Unit sales early in the year nearly equaled the five-year average for those months, but in recent months, sales have been a couple hundred boats per month below the five-year average and 400 to 600 boats per month below the same months in 2006 and 2007.

However, comparing August to August 2009, the valuation of sailboats sold rose 15 percent, up $5 million, while, for the same period, powerboat valuations dropped 7 percent, down $15 million.

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This month, we took a closer look at brokerage sales on the two coasts of Florida, a state we reported on last month as a whole. The Atlantic Coast is historically a much bigger sales region than the Gulf Coast, but the disparity in sales is even greater as the size of boats increase. While double the number of 26- to 35-foot boats are sold on the Atlantic side, more than 10 times the 55-foot-plus boats are sold. So the difference in total sales valuation is disproportionately greater on the Atlantic side.

Through eight months, unit sales were up about 100 boats, or 9 percent, on the Gulf Coast, to 1,221 boats sold. Total valuation increased $16 million, or 18 percent, to $104 million. Although brokers along the Gulf have seen year-to-date increases of 28 percent and more in boats sold over 46 feet, their biggest market is in small- to medium-sized boats - more than 1,000 boats and $70 million of the $104 million total valuation.

By comparison, through eight months on the Atlantic Coast, unit sales are up by almost 400 boats, or 15 percent, to 2,855 boats. Total valuation is $747 million, an increase of $122 million, or close to 20 percent. By both measures, the Atlantic Coast is having a stronger year than the Gulf.

Then last month, Gulf Coast sales actually fell more than 20 percent, compared to August '09, and valuation dropped 28 percent, from $13 million to $9.5 million. By contrast, on the Atlantic Coast, unit sales were up 4 percent, to 319 boats, but total valuation of sales took an ever steeper drop of 43 percent, to $53 million.

Most of the latter was due to much lower valuation of boats sold over 55 feet, and a very different picture emerges if we leave aside boats 55 feet and up. For boats 55 feet and under, Atlantic Coast sales were down only about $2 million, which is less than the decrease in the much smaller Gulf Coast region. Combine that with both the lower unit sales in August on the Gulf Coast and the smaller year-to-date increase in unit sales, and we might be detecting an effect of the oil spill on the brokerage market.

John Burnham is editorial director of YachtWorld.com.

This article originally appeared in the October 2010 issue.

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