New baseline emerges in brokerage sales

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The number of brokerage boats sold in the United States in the first month of 2011 fell in line with a sales trend that had been in place for the second half of 2010.

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For seven consecutive months, aggregate unit sales reported by YachtWorld.com brokerage members have been within 200 boats - and usually fewer than 100 - of the number sold in the same month a year earlier.

Is a new normal for the brokerage market starting to define itself? Leaving aside January 2009, when only 1,247 boats changed hands, unit sales for the month have been in the same range in recent years - 1,564 boats in 2011, 1,604 in 2010, and 1,662 in 2008. By comparison, from 2005 to 2007, January sales were typically 1,900 to 2,000 boats.

A "new normal" hypothesis would suggest that annual sales of 29,000 to 30,000 boats (as in 2010) would become a benchmark expectation. We'll have to wait and see, of course. Meantime, the January sales data points to a few other notable trends.

The 1,564 boats sold in January represented a 2 percent decline from unit sales in January 2010. Total valuation declined 4 percent, to $178 million. Powerboat sales continued to be relatively flat compared to the previous year; they were, in fact, up 1 percent, to 1,258 boats. Sailboat sales, however, dropped 15 percent, to 306 boats. The decline in valuation was shared by both types, with power down 2 percent, to $155 million, and sail down 17 percent, to $23 million.

By length, one size range - 36 to 45 feet - showed a marginal increase in unit sales of 1 percent. Other categories were down slightly, except boats greater than 55 feet, which were down 17 percent. Generally, bigger boats sold better in 2010 than 2009, so that stat could represent either an anomaly or the start of a new trend.

Valuations, by length, had a couple of wrinkles worth noting. While unit sales of all boats under 35 feet were down 3 percent from January 2010, total valuation in that size range fell more than twice that, from $46 million to $43 million for the month.

In contrast, the valuation of midsize and bigger boats held steady or rose slightly: In 36- to 45-footers, a 1 percent rise in unit sales converted to a 4 percent rise in valuation. For 46- to 55-footers, a flat month in unit sales also saw valuation up by 4 percent. And for boats over 55 feet, although unit sales were down 17 percent, total valuation only dropped 12 percent, meaning that the average big boat sold for $1.11 million, up from $1.04 million the month before.

The average time it took to sell a boat declined in January from 275 days a year ago to 274 in 2011. The average selling time for all of 2010 was 281 days, and in 2009 the average was 271 days. That average time peaked during the summer of 2010 at more than 300 days and has typically been 270 to 280 since then. That's still substantially higher than the averages of 210 to 250 seen throughout the 2005-to-2007 period, but for now the market seems to be finding yet another new point of equilibrium in the current range.

John Burnham is editorial director of Dominion Marine Media.

This article originally appeared in the March 2011 issue.

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