Brokerage sales and sales prices decline in May - Trade Only Today

Brokerage sales and sales prices decline in May

U.S. brokerage sales in May were 2 percent lower than in the same month a year earlier as 3,586 boats were sold, yet they beat the five-year average for the month for the first time this year.
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U.S. brokerage sales in May were 2 percent lower than in the same month a year earlier as 3,586 boats were sold, yet they beat the five-year average for the month for the first time this year.

For April and May combined, sales were down 3 percent from 2014, but they improved incrementally by that measure from sales in the first quarter of the year, which were 4 percent lower, according to YachtWorld member yacht brokerages reporting in SoldBoats.com, their proprietary database. Through the first five months of this year, 11,919 boats were reported sold.

The total price paid for boats sold in May declined 10 percent, compared with the previous May, from $444.6 million to $400.4 million. The majority of the decline was attributable to lower sales of superyachts (boats 80 feet and larger), but the lead category driving prices higher in 2015 — boats 46 to 55 feet — also cooled in May, with unit sales down 4 percent and the total price paid level at $47.25 million. Whether the market is changing direction or it simply paused in May remains unclear.

On a year-to-date basis, market value was up strongly, from $1.47 billion to $1.63 billion. Superyachts (boats 80 feet and longer) were responsible for $114 million of that increase, and the total value of boats from 46 to 55 feet rose 17 percent, or $30 million, on sales of 714 boats, up from 651 boats in 2014.

Most other segments of the market gained in value for the year, as well, even the under-26-foot range, in which sales volume declined 6 percent, with 3,900 boats sold, yet the total value increased 3 percent, to $96.9 million. The exception was among 36- to 45-foot boats, where the total value declined by $18 million, or 5 percent, on a volume decrease of 94 boats, or 4 percent.

This month, we continue our study of the age of brokerage boats sold with a breakdown of ages of powerboats sold between April 2014 and March of this year (see graphic). Of 24,888 powerboats sold during that period, the largest number, 3,336, were 8 to 9 years old and more than one-third were 6 to 11 years old (8,926). More boats 12 to 17 years old were sold (5,610) than more recent models 5 years old or younger (4,221).

As we have noted in earlier articles, the available inventory was dramatically affected by decreased boatbuilding during recessions. The recent recession’s impact on sales of recent models is clearly evident in this graph and, to a lesser extent, so is the recession of the early ’90s.

Although a lack of inventory among recent models has visibly put the brakes on sales of recent-year models, as new building increases, brokers are taking advantage of the opportunity to sell more new and 1-year-old powerboats. As the bulk of boats listed continue to age, this trend seems bound to continue, although the higher prices of new and nearly new boats will be a limiting factor.

John Burnham is the editorial director of Dominion Marine Media.

This article originally appeared in the July 2015 issue.

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