Recently Steve Russell was interviewed by America’s Great Loop Cruising Association to give his take on the current Boat Market. Below is the article from the Great Loop eLink Magazine by Karen Nettles.
While most industries saw a dramatic downturn in business when the COVID-19 pandemic began, the marine industry saw just the opposite as the pandemic ravaged on. According to the National Marine Manufacturers Association (NMMA), sales of boats, marine products and services across the U.S. leaped to a 13-year high in 2020 to $47 billion, increasing 9% from the prior year. And, that demand included a new surge in Great Loop-capable boat sales as well.
The pandemic forced many people to have more flexible work schedules and environments, causing some to turn to boating as a way to embrace a new normal and enjoy a hobby or lifestyle that already included social distancing. This too was no different for those interested in the Great Loop. AGLCA saw an incredible 20% increase in membership in FY2021 and with so many new members who are or will be in the market for a boat, AGLCA reached out to all its Yacht Broker and Boat Manufacturer sponsors and offered them an opportunity to participate in a Q & A about the boat-buying market for this article. Thanks to Captain Steve Russell of Admiralty Yacht Sales in Delray Beach, FL and Michael Schwartz of Schwartz & Co. Yacht Sales in Westmont, IL for taking us up on the offer.
What’s the current status of the inventory of boats for sale?
Russell– Inventory for Looper boats in good to excellent condition is still very low. As the Great Loop and associated Loops continue to grow in popularity. With more people keeping their boats longer, I anticipate this status to exist for another year or two. Of course, some makes and models are more popular than others and they are the hardest to find. I’ve noticed that the types and sizes of Looper boats has changed since I did the loop in 2017. Mostly, they have gotten bigger. With a limited inventory, this is where using a Buyers Broker can be a great help. At no cost to you, a buyers broker will often know about boats for sale that are not on the market. This, along with helping you work through the steps of buying a boat and often dealing with a selling broker, can relieve a lot of stress.
Schwartz-Inventory continues to move quickly in this market. We have seen listings go as soon as they are posted, and oftentimes the listing broker will already have some buyers in mind when a new opportunity comes in. This certainly presents a challenge for unrepresented buyers who aren’t as familiar with the brokerage process and do not have relationships with the various brokers throughout the Region to be able to call directly and get quick answers.
Are there any particular boat makes or styles that are in high demand?
Russell– I specialize in Power Catamarans. High demand boats are the Endeavour 36, 38, 44. But all Powercats in the 38-50’ range are in demand. Other makes that are very popular are PDQ, Manta and Lagoon in the used market. Newer boats include the Aquila, Leopard, Fountaine Pajot and Aspen.
Schwartz- If it floats, it’s in demand! The AGLCA comprises a very specific segment of the boat-buying population that typically prefers tugs & trawlers which is a particular niche for us. As the Great Lakes representative for American Tug, we see a lot of buyers looking for these and similarly styled vessels. Our view is that current market demand is artificially inflated due to the pandemic as boating by its nature is socially distanced. Boats, RV’s, ATV’s, etc. have seen unprecedented demand in the last year and a half. As it relates to the Looping crowd, we have seen younger families considering the Loop and like the space provided by tugs & trawlers to also accommodate the kids. We have also seen the Loop crowd being more thoughtful and prepared related to their purchase. Loopers generally know what they want, are quite educated on the vessels and haven’t been acting impulsively like the rest of the buyers in the market.
How quickly after hitting the market are most Looper-type boats selling?
Russell– Powercats and most other Looper boats that are in good condition are not lasting a week. The last 5 boats that I have sold never even hit the market. Several others sold before I had a chance to sell them. For example, an Endeavour 44 was listed one day. I had a couple that wanted to see it the next day. When I contacted the listing broker he already had a full price contract on it sight unseen!
Schwartz-With used American Tugs, we are seeing them gone at full ask with a backup offer at full ask, almost as soon as they hit the market. This has led to lots of new orders. With other popular manufacturers that dynamic also seems to exist, but not quite to the same extent. Looper-style vessels that aren’t moving quite as fast are those in the 40′ + segment which present higher purchase prices, a higher cost of ownership and higher costs to Loop.
Do you have any thoughts or data on how close to asking-price boats are typically selling for?
Russell– Most boats are selling for close to asking price, and if in good condition, usually not more then $10k below asking. There have been some instances where people have paid more because that boat is so hard to find. Some of that has to do with the Year and price of the boat. The lower priced boats, in the $80k- $250k range tend to not veer off the asking price as much as the higher priced boat in the $250k – $800k range. If you are working with a buyers broker, they can help by providing information on previously sold boats to understand the acceptable ask/buy variable.
Schwartz-Generally, across all classes, vessel sales are tracking pretty close to ask. In the tug & trawler space, we are seeing most deals at ask where the vessel is less than 10 years old and not a project. For American Tug (specifically the 34 and newer 362, 365, 395 models), we are seeing deals at ask with backup offers at ask almost immediately upon listing, with the larger vessels taking a little more time and being a little more flexible on price.
How does the current market for Looper boats compare to before COVID?
Russell– Like everything out there, Looping has become a highly desirable adventure because of Covid. I would say that the current market has exceeded pre-Covid numbers by 2 to 3 times. That has helped to drive up the prices in the boat market as the inventory decreased.
Schwartz- Loopers are an interesting crowd. They don’t seem to be the same impulsive buyer we’ve seen enter the market since COVID. Loopers do their homework and are intentional about what they do. The market was consistent with Loopers before and we expect it to be consistent going forward. That there is now more awareness of the Loop and younger families looking to Loop is a trend we hope will continue.
Do you have any anecdotes from recent brokerage deals that help highlight the state of the market?
Russell– In my last deal, the seller did not want to actually sell his boat for 2 months because he was still traveling. I keep a list of people that are using me as a Buyers Broker so I sold it in 2 weeks and delayed the Closing for 2 months. They did not want to take a chance of missing the boat, so to speak. Many times we hear about boats that are coming up for sale before they actually do.
Schwartz-Our counterpart for American Tug down in Florida brokers more used American Tugs than anyone in the business. A recent listing of his came to market and I sent a message asking how many offers he had. Long story short, he had an accepted offer at ask with a backup offer at ask, both with full deposits not long after posting the listing.
What is your best advice for someone seeking to buy a boat for the Loop in the next 12 months?
Russell– Know what you want. Do not wait. If you have questions on what kind of boat you want, contact a buyers broker. There is not cost to you and let them help you work through the search. When a desired boat becomes available, do not wait and think about it. If it is a boat in good condition, it will be taken before you can even make an offer. In the current boat market, low ball offers will be rejected and you will lose out on the opportunity. If you do not know what boat you want, go on any Looper boat you can. Go to any show you can. Meet up with current loopers that have a boat ( make and model) that you are considering. Talk to them about their boats and possibly travel to see their boat. Do Not expect to find a low dollar deal. You will miss out very quickly.
If you find a cheap boat, expect to put a lot of money, and time, into it. Most of the time, it is not worth the time, money or effort. If an owner has not taken care of the boat, there will be a ton of catch up to do to make it Loop Ready. You don’t want to be Looping and making excessive repairs along the way. It takes all the joy out of the trip. If you want to use a Buyers Broker, which doesn’t cost you anything. Do Not approach a broker selling a boat directly. Once you do that, your Buyers Broker will not be able to help you buy that boat. Let the Buyers Broker do the work for you.
Schwartz – That’s a tough question to be honest. It remains a seller’s market and inventory is tight. There are no “deals” and buyer beware any “deals”. I generally advise those looking to Loop or engage in any extended cruising to have their vessel for at least a season to get to know it first. This may not be as important for experienced captains, but oftentimes the new vessel is larger than what the buyer has experience with. On the Loop you will be doing a ton of locking and docking so Loopers need to become proficient at this prior to embarking on the Loop. Knowing how to properly set an anchor with sufficient rope is also a skill that should be practiced. The Loop shouldn’t be the first time sleeping on the hook! New owners are advised to practice before they play.
We would advise attempting to secure a Loop vessel between now and the end of the next boating season in 2022. Plan lots of mini-trips once securing the vessel and through the Spring/Summer of 2023. Be prepared to start the Loop in the Summer/Fall of 2023 depending on where you are starting from. For those we work with here in the Great Lakes, we advise they cruise regionally and hit the river system in Chicago with everyone else in the Fall of 2023. This timeline generally provides time to also order new, get lots of mini-trips in over the 2023 boating season and then embark on the Loop in the Fall of 2023. As order slots get taken over the next couple months for new vessel orders, the timeline to take delivery and practice before starting the Loop in 2023 will tighten.
Based on these comments, the boat-buying market for Looper boats shows no signs of slowing down any time soon so if you are in the market for a boat, educate yourself, get a broker and be prepared to move fast. If you need a broker to find your Great Loop boat, please be sure to utilize the AGLCA Sponsor Directory found under the Information menu on the AGLCA website. AGLCA has over 30 Yacht Broker and Boat Manufacturer sponsors that would be happy to assist you. And, if you’re not certain where to start to find the right boat for you, be sure to check out the AGLCA webinar library on vimeo.com which includes these titles: Finding & Buying Your Perfect Great Loop Boat, Virtual Looper Crawl: Trawlers, Virtual Looper Crawl: Motor Yachts & Express Cruisers, Virtual Looper Crawl: Tugs & Down East Boats, Virtual Looper Crawl: Sailboats & Power Catamarans. You’ll also find the podcast on the Boat Buying Market helpful as well as this Show & Tell presentation from a Virtual Rendezvous.