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Why record boat sales? Will 2021 be the time to buy?

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Why record boat sales? Will 2021 be the time to buy?

Old 07-25-2020, 05:51 AM
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Default Why record boat sales? Will 2021 be the time to buy?

From FL to SC to MD to CT, everyone I have spoken with has told me that boat dealers cannot keep inventory in stock, especially saltwater fishing boats, PWC's, outboards, and jet boats. I little Google research will tell you that this is all due to C19 and boating being the ultimate form of recreation while social distancing. That makes sense, but what I am wondering is - where the heck are all of these buyers magically coming up with the money to buy boats now? One theory I have is that there are a LOT of small businesses that may have not been impacted by C19 all that much and still received PPP checks, which the owners took as a windfall and bought themselves some new toys. I personally know a lot of business owners like this (far more who received the funds and really needed it to stay afloat, and also many that received the funds but will go out of business anyway), but here is the catch - 99% of the ones who I know who took the funds as a windfall do not understand that (currently) their PPP expenses will not be deductible and that that a third of what they received will be going back to Uncle Sam in April. Also, what if C19 roars back during the coming fall/winter/flu season and the economy shuts down even worse than it did in 2020? It seems to me, as a business owner, that now is NOT the time for large purchases but rather a critical time to sock away as much dry powder as possible, and a great time to sell if that is on your radar. I think there could be a flood of boats for sale in 2021 and that it could create some unique buying opportunities. You could take this a step further and speculate what would happen to the economy after the election, regardless of who is elected President.

I would love to get the thoughts of some THT experts in the industry that will give it up straight.

Thanks and tight lines!
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07-25-2020, 06:22 AM
mintregila
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When I was a kid, my father said we were going fishing on Sat and that was it. Fast forward. Weekend sports and activities like baseball and soccer killed weekend boating for many. Just watch what happens when the kids have weekend games again. Lots of boats will be for sale.
Old 07-25-2020, 05:56 AM
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Boats have sold in record numbers the past few months thanks to the government.
Many people who own businesses applied for PPP funds since they were "grants" that didn't have to be repaid if certain criteria were met. Even if the business wasn't impacted by the pandemic, they still applied for and received funds.
What better way to put to use your recent windfall of cash than to buy a boat.

This isn't speculation, I know of multiple instances of this occurring.
Old 07-25-2020, 05:56 AM
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Maybe...........or maybe not?
Old 07-25-2020, 05:57 AM
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A lot of people are scamming unemployment as well. There are folks out there who will get you setup but then you pay them a cut of every check you get...

I also think everyone with money in stocks has made a good bit of money recently if they were paying attention, and everyone in realestate has been selling houses like crazy so they are flush with cash as well. Realestate in Florida is selling like it did before the last crash.
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Old 07-25-2020, 06:05 AM
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I'm sure some people have used that ppp money to purchase boats.

However, a few months ago my business partner called me wanting to buy a boat. He has always been into cars, has like 10 of them. But now wants a boat. He isn't spending bailout money,, just has money..

I also have another friend who travels often.. Has a youtube or instagram account setup just for traveling.. well his summer travel budget is 30k and is no longer traveling do to covid. Guess what, asked me questions about buying a boat.

There are plenty of people out there with money, who are now becoming interested into boating.

If there isn't football in the fall, the market is going to heat up even more.
Old 07-25-2020, 06:07 AM
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1 - There is nothing to do. Everything is closed down. Boating opens up a lot of options right now.
2 - People got scared into thinking that they might as well enjoy it while they still have their health.
3 - Interest rates are low.
4 - Not everyone's finances were significantly affected by the pandemic.
5 - People don't always make good financial decisions, and basically spend money as they get it without much thought on the future.

It is really an interesting time. Just how boat sales are up, same thing is happening with the real estate market in beach towns, ski towns, and other vacation destinations. I would agree, that a lot of people are jumping the gun here. I am not quite sure what the economic fallout from all this will be, but think a lot of the effects are going to be felt in the next year or so, not right now. I guess it really depends on your industry, as some are more recession proof than others. Personally, I am trying to be a bit more frugal through the next year, in order to have cash on hand in the event some opportunities arise. Those who were properly positioned after 2008 did very well.
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Old 07-25-2020, 06:07 AM
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Using rough numbers, the Rona has caused 15% unemployment. That means 85% are still employed.
That 85% can't go to movies, concerts, sporting events, etc, leaving other forms of family activities, like boating, as a popular alternative.
Couple the increased demand with boat manufacturing being throttled by the Rona and you have a supply/demand situation we're seeing now.
If there is a misuse of PPP funds, my guess is very little of it is going towards buying boats.
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Old 07-25-2020, 06:15 AM
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Lots of great comments, I really appreciate them. My business was somewhat impacted by C19 and I received a pretty substantial PPP check. I don't look at it as scamming the system because at the time I applied for it, we all thought the bottom was going to fall out of everything (and lord know I have paid my share in). But the money is sitting in the bank with 1/3 in escrow for taxes. I think there could definitely be a recipe for a buyers market in 2021, time will tell, but for now, I am playing defense.

Thanks again.
Old 07-25-2020, 06:22 AM
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When I was a kid, my father said we were going fishing on Sat and that was it. Fast forward. Weekend sports and activities like baseball and soccer killed weekend boating for many. Just watch what happens when the kids have weekend games again. Lots of boats will be for sale.
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Old 07-25-2020, 06:25 AM
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2023. Covid will be over and kids will be back to school activities. Boats will have sat for 6 months to a year. The fire sales will start.
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Old 07-25-2020, 06:31 AM
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In the NE it is popular for people to send their 2-3 kids to summer camp for ~$10-15k per kid and also take a 1-2 week vacation with the family in late August. Well all of that is over. So if you figure summer camps are 20-45k and the vacation is 10-20k you get a total 'savings' of 30-65k due to covid curtailing travel. If you are a family that can drop that kind of money on a couple months of entertainment it isn't hard to walk into MarineMax and drop $200k on a boat on a whim. After all the first year of depreciation is the same you would have spent on summer camps and vacations. So you likely can sell the boat and be equal to where you would have been if normal times.

You can scale this thinking to different economic situations. The family that is giving up the $4k vacation can take that and put it down on a loan for $30k used boat and have some fun on the water. The loan on 26k isn't much so people can make it work.

Also note the people in the groups I mentioned above haven't been affected by Covid layoffs, these aren't restaurant workers, retail employees, etc. Now that companies are laying folks off that fall in the groups above the THT dream of great deals on boats and blood in the streets might come true.


EDIT: I agree that once covid goes away many people with ditch the boat as they will return their old lifestyles. However many will probably stick with it, so it seems boating overall will get a good infusion of new customers due to covid.

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Old 07-25-2020, 06:31 AM
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It's definitely true that some business owners are misusing PPP funds to buy boats. I know of at least 3 doing so. Their businesses have rebounded nicely so they don't really need the PPP money to keep the business running, so they bought toys instead. I'm not sure if they realize that the IRS is going to audit them and look at where that money was spent.

There's gonna be some shock and awe and embarrassment when Uncle Sam starts digging into these funds in a year or two from now.



Old 07-25-2020, 06:38 AM
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As someone who lives in a beach town I can tell you that there has also been a pretty big shift of people leaving bigger cities inland and moving full time here. The cities now offer none of the fun activities that they used to (shows, bars, concerts) but still have all the bad qualities of crowdedness traffic and so on. When you combine this with so many more people now being able to work from home the attractiveness of the large cities is diminished.
I've also noticed that the difference between the week and weekend is way less. If it’s a pretty day there are lots of boats out at the sand bar or fishing no matter what day of the week it is. Lots of these people are “working from home” and they are already here so if it’s a pretty day they are out. This all leads to more boat use and boat buying. Not too many other family activities to do right now.
Old 07-25-2020, 06:45 AM
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I wonder how many consecutive days this exact question/thread will get reposted. THT is on a roll right now.
Old 07-25-2020, 07:00 AM
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I think a lot of people are missing the bigger picture when it comes to the economy. The money being handed out now is just printed money, there is no backing to it. When (not if) the bottom falls out the US dollar will be worth less (significantly) than it was pre-pandemic because we are trying to buy our way out of this crisis. So smart folks are putting their money into tangible assets. Yes, boats and cars are usually a diminishing asset, but if the bottom falls out of the dollar those assets will actually sell for a higher dollar amount than what was originally paid. Then you invest that money and as the market grows and the dollar is back where it was, that money is now worth SIGNIFICANTLY more. It's a long game and a long risk, but that's what the big money players are gambling on. That's the big money stuff (expensive boats/vehicles.)

As far as the cheap stuff goes, that's people that took unemployment plus an additional 600 bucks a week, so they make more than they make on unemployment than they did working. There is no incentive to go back. So they buy a bunch of stuff they don't need or can't truly afford and when that stops then they're holding the bag. Repo's will be off the charts (that's already starting) so that's why you can't find a cheap used vehicle or boat anymore.

The crash will be far worse than 08-09. Housing will plummet, vehicles will be everywhere, boats will be everywhere, all these 4 wheelers/sideXsides/motorcycles, everything will be for sale. And again, the rich will keep getting richer because they play games we can't afford to play.
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Old 07-25-2020, 07:04 AM
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Originally Posted by Furbird View Post
I think a lot of people are missing the bigger picture when it comes to the economy. The money being handed out now is just printed money, there is no backing to it. When (not if) the bottom falls out the US dollar will be worth less (significantly) than it was pre-pandemic because we are trying to buy our way out of this crisis. So smart folks are putting their money into tangible assets. Yes, boats and cars are usually a diminishing asset, but if the bottom falls out of the dollar those assets will actually sell for a higher dollar amount than what was originally paid. Then you invest that money and as the market grows and the dollar is back where it was, that money is now worth SIGNIFICANTLY more. It's a long game and a long risk, but that's what the big money players are gambling on. That's the big money stuff (expensive boats/vehicles.)

As far as the cheap stuff goes, that's people that took unemployment plus an additional 600 bucks a week, so they make more than they make on unemployment than they did working. There is no incentive to go back. So they buy a bunch of stuff they don't need or can't truly afford and when that stops then they're holding the bag. Repo's will be off the charts (that's already starting) so that's why you can't find a cheap used vehicle or boat anymore.

The crash will be far worse than 08-09. Housing will plummet, vehicles will be everywhere, boats will be everywhere, all these 4 wheelers/sideXsides/motorcycles, everything will be for sale. And again, the rich will keep getting richer because they play games we can't afford to play.
You also need to look at this globally. We're not the only country printing money. The 08-09 crash was a big deal because it was OUR problem. A global pandemic wont have the same result. Shit will hit the fan, but it wont be like 08-09
Old 07-25-2020, 07:14 AM
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Ive got some friends that recently got into boating and all of the above are the reasons. Their typical Saturday when nothing was going on was get up late, eat breakfast, work in the yard for a while, go out to lunch and shop downtown until they had dinner plans. Typically dropping 2-300 dollars in a weekend, just on eating out at nice restaurants. That dried up and they realized they had a lot more money than they thought. Now they boat and don't eat out as much. I say good for them. However, I do see them selling the boat in the next year or two and going back to their old ways.
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Old 07-25-2020, 07:25 AM
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Originally Posted by RBertramHoff View Post
Lots of great comments, I really appreciate them. My business was somewhat impacted by C19 and I received a pretty substantial PPP check. I don't look at it as scamming the system because at the time I applied for it, we all thought the bottom was going to fall out of everything (and lord know I have paid my share in). But the money is sitting in the bank with 1/3 in escrow for taxes. I think there could definitely be a recipe for a buyers market in 2021, time will tell, but for now, I am playing defense.

Thanks again.
may want to look at the rules that come along with the PPP. Have to use 80% toward employee salaries, cut off date to spend it was December if i recall correct.

Anyone running out and buying boats with PPP going to have one hell of a tax bill next couple years..

Simple answer is people are bored. not just Boats, RVs, ATVs, race cars, etc.. most all redneck toys people can still go out and enjoy are selling like hotcakes.

boat buying market may be better in 2021, but would expect demand to stay high for boats and all REC hobbies for years.
Old 07-25-2020, 07:34 AM
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It's a shame. It's even hitting us up in Canada because we can't sell boats to the US because the Canadian government won't open the border. People are meeting each other in the middle of the great lakes and doing an exchange of boats that way now.

Watching your crisis down there, I'm expecting the border to be closed well into 2021.

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Old 07-25-2020, 08:14 AM
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It’s not just boat sales, its home sales in vacation areas. In both the Keys and Martha’s Vineyard, and probably happening in many other coastal/vacation type places as well. Homes in the two areas I have mentioned have been selling within a day or two of hitting the market if they are priced somewhat correctly. Many people have come to the decision that they cannot or will not be flying for the foreseeable future, but want some place within driving distance to get away.

My wife is in the position that she does not work at a hospital, but has privileges at the hospital and needs to have the ability to go there to conduct business, but the hospital has instituted a rule that if you take a commercial flight, you have to self quarantine for two weeks afterwards.

A lot of people are looking for alternatives to their normal fly away vacations and staying at home (or close by) is their only alternative. Boats are becoming the alternative to spend time with the family if you live near a coastal area.

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