Not many yacht brokers will care to see a repeat of the 2008 and 2009 U.S. brokerage marketplace anytime soon, but most have been encouraged by improvement that took place in the second half of the year.
As we reported online in Trade Only Today, December 2009 was a strong month for unit sales and total valuation of boats sold, according to sales recorded by member brokers of YachtWorld.com. After a dismal start, unit sales picked up enough to finish the year 1.5 percent ahead of 2008, with 27,250 boats sold.
Powerboats led the way, as brokers sold 7 percent more boats than the year before, finishing with 21,839. Although sailboat sales improved late in the year, they slipped overall by nearly 1,000 boats to 5,411, down 15 percent. Although the mix is different, looking at a five-year average of units sold (see graph), it's clear that sales in the fourth quarter returned to levels the market is used to seeing.
While a similar number of boats changed hands last year, total sales valuations didn't measure up to 2008 standards, falling 14 percent from nearly $3.2 billion to $2.7 billion. Only in the last quarter did values outpace those of 2008, but as readers will recall, during the autumn of '08 most U.S. markets were in a free fall, and valuations were way down. In recent months, market valuations do appear to have stabilized, and demand for boats has increased once again.
From a regional perspective, Florida remains the hub of U.S. brokerage sales. As a big-boat market, local brokers were hit in the first months of 2009 by very low sales volume, especially in terms of selling prices. It took until midyear before they were able to match and then surpass the monthly unit sales for 2008. Valuations only outpaced 2008 in the fourth quarter, but in December, Florida brokers led the big-boat market rebound, which has bred guarded optimism about 2010.
Three other regions had somewhat similar years - the Mid-Atlantic, the Northeast and the Gulf Coast. The Mid-Atlantic was an early leader of the unit-sales recovery, and improvements in total valuation have followed close behind. The Northeast took longer to see higher sales, but it finished the year very strong compared to 2008. The Gulf Coast has a slightly different story. Although unit sales all year were generally similar to 2008, valuations have been consistently better since midyear, especially in the fourth quarter.
West Coast and Great Lakes brokerages have had weaker years overall. In the Great Lakes, unit sales volume has been roughly the same as in 2008, and valuations have been as well, except that '09 values were significantly lower from a few early summer months. This sales curve may in some measure reflect the greater seasonality of the market, but it does look different.
West Coast unit sales have improved since midyear, but values have been erratic, generally lower than in '08 and only slightly improved in the fourth quarter.
This article originally appeared in the February 2010 issue.