The boat re-sale market has changed considerably over the past few
months. I attended a industry conference on October 2nd that was
hosted by Yachtworld.com, the international Multiple Listing Service
used by yacht brokers and a major service that yacht brokers use in
marketing and advertising their boat listings to the boat buying
public. One piece of disturbing information that we learned at the
conference was that in the month of September 2007 the total number of
boats sold by the 275 Yachtworld broker members in California was 274
boats. This averages a little less than one boat sold per brokerage
for that month. It is forecasted that the average will continue to
decline as we go into the holiday season and then the "tax season"
which will follow shortly thereafter. All of the boats that my
brokerage sold in September were sold at considerably less than what
the market values, or listing prices, were for the boats.

The slow down in the boat market can be attributed to, among other
things, the current down trend, recent decline and uncertainty in the
United Stated stock and real estate markets and the tightening of loan
criteria in the finance industry. Historically the boat sales market
is highly affected by theses, among other things. The number of boat
for sale inquiries that my office receives on a daily basis declined
drastically the day after the announcement of the Countrywide Mortgage
crisis a couple of months ago. As the boating season enters its annual
hiatus we will see further declines in inquiries from prospective
buyers. This is something that yacht brokers plan for yearly. The
question is will the boat sales market rebound in the spring when
people normally get the "boating bug" and the start of the boat buying
season begins? In my opinion, as a professional industry observer, the
answer to that question is a resounding "no."

The fair market values for boats today are not what they were even one
month ago. For the past few months, in the middle of the boat buying
"season," we have consistently seen boats sold for as much as 60% of
what their fair market values were just three months ago. Typically
boat owners, who take good care of their vessels, have made numerous
upgrades, have low hours on the engines, etc., feel that their boats
are certainly worth more than what the fair market values are. In a
good sellers market this can sometimes be true. In today's market,
however, this is far from being true or even realistic. Right now, and
for the foreseeable future, we are in an extremely favorable buyers
market.

Yacht brokers, marine lenders, yacht surveyors and other industry
professionals try to keep a good positive attitude about the future of
the market. However positive their attitudes might be will not be
enough to magically turn the market around. It is well known that a
boat will sell only for as much as the market will bear. The market is
not bearing very much right now and it will have to get in line behind
the real estate market, stock market and the finance industry and wait
until after they get healthy again before the present buyers market
begins to lean in the other direction favorable to boat sellers.
Meanwhile a boat seller can expect to keep his boat on the market
possibly for a long time before finding a buyer who is willing to pay
the fair market value for the boat. What about the seller who needs to
sell the family boat quickly, or at least in a reasonable amount of
time for whatever reason? Based on what I, as well as many other
industry professionals, who have been closely observing the market for
the past few months think, is that the seller can expect to get offers
to purchase the boat for as much as 60% below what the fair market
value of the boat was a few months ago. All too often, for lack of any
better offers and the need for cash, the seller will end up selling at
a highly deflated price. Time will tell, but this might be the best,
or at least one of the best boat buyers market ever and the market
will likely continue to favor buyers for quite some time to come.

There are some things that a boat seller can do in order to get top
dollar, or even substantially more, for his boat without incurring any
additional out of pocket expenses preparing the boat for sale. Some of
those things will be discussed in my next post entitled "How A Seller
Can Profit In A Boat Buyers Market."