December dip and a slowdown in the second half of the year temper optimism about prospects for 2011
What started the year as a broad rally in brokerage sales remained positive across all sizes of boats through the end of the year, but only sales of larger boats finished strongly. That's the essence of the 12-month report from SoldBoats.com, the proprietary database in which member brokerages of YachtWorld.com report the prices at which they have sold boats.
For the year, U.S. brokers sold 29,494 boats, 8 percent more than in 2009. The total valuation of those boats was $3.2 billion, an increase of $500 million or 18 percent.
The year began with valuations and unit sales up dramatically, compared to the recessionary lows of early 2009. The rally softened in the spring, in part because 2009 sales had begun to lift at that point. But it also became clear that an early return to the boom times of 2006 and 2007 was not in the cards and the market would have to redefine a new normal.
The summer doldrums hit in the form of a flattening of the U.S. economic recovery and loss of consumer confidence. Month over month, unit sales dipped below 2009 in the fall, but larger boats were selling at higher values, mitigating the overall brokerage slowdown.
In December, 1,597 boats were sold, 6 percent less than December 2009 but level with the five-year average for what is regularly the weakest sales month of the year. The 2010 sales number is only a couple hundred boats behind the Decembers of 2005-2007, but it only looks OK because, in 2008, 1,131 boats were sold, dragging down the average.
In any normal year, the year-end numbers would seem very solid, and the only blemish - an increase in average days to sale - would be easily viewed as a positive since many boats long on the market have finally moved. However, the relative weakness of 2009 and the slowdown in the second half make it hard to forecast 2011 with immediate optimism.
Certainly the market could improve as the U.S. economy makes gains in fits and starts, but December's modest numbers suggest that 2011 could bring more of the same. The most likely gains are in the higher-dollar boats selling at value prices to those with capital who are relatively unaffected by the country's economic challenges.
John Burnham is editorial director of Dominion Marine Media.
This article originally appeared in the February 2011 issue.