In July, for the second month in a row, the volume of U.S. brokerage sales was lower by 3 percent than it was in the same month a year earlier.
According to reports by YachtWorld member brokerages in SoldBoats, their proprietary database, sales volume declined from 3,383 to 3,269, although the total value of sales was level, at $332.3 million. For the year through July, sales volume was 18,604 boats, 2 percent lower than in 2015, and the total value of sales was off 3 percent, at 2.3 billion.
The U.S. brokerage market appears to be headed for incrementally lower sales for the second year in a row, even as new-boat sales are rising. The decline is not dramatic, but at current levels about 29,500 boats will change hands by year’s end. That would make 2016 the first year since 2012 in which brokers did not report selling 30,000 boats.
New designs, new powerplants and improving technology in the latest models may well be having an effect, but other fundamentals at work in the brokerage market are worth reviewing.
One undeniable factor is that a large number of powerboats were built during the period leading up to the Great Recession in 2008-09, after which boat production was significantly curtailed. For several years it was not hard to find a clean 5-year-old model on the brokerage market at an attractive price. Now those boats are more than 10 years old, and relatively few 5-year-old boats are listed for sale.
A second factor is the longer-term decline in the desire to own sailboats. The number of boats that changed owners in the past five years did not vary significantly, but as the economy stabilized and the brokerage market grew slightly, the sail segment has lost nearly 2 percentage points.
The uneven U.S. economic recovery is likely a third and somewhat harder to distinguish factor. The highest-volume segment of the brokerage market has long been relatively affordable boats between 26 and 35 feet. During the past several years this segment declined from being close to 40 percent of the overall market to 37 percent. By contrast, sales of bigger boats now make up a larger segment of all transactions on the brokerage market.
One additional relevant point is that average prices rose gradually over time, even as inventory in some sectors of the market has aged. In the 26- to 35-foot range the average price has increased from less than $55,000 in 2010 to close to $60,000. Among boats under 26 feet, the average price has risen just as much, from roughly $20,000 to $25,000.
The amount of weight to ascribe to each factor in the brokerage market equation is a matter of opinion. But looking ahead, the effect of the recession on the brokerage market will be considerable for quite some time.
John Burnham is the managing editor of Dominion Marine Media.
This article originally appeared in the September 2016 issue.