News Column

Boat Sales on the Rise

Nov. 12, 2012

Wayne Faulkner

Boat sales.

When the Great Recession hit, potential boat buyers headed for safe harbor -- and stayed there.

Now a few are venturing out, as consumer confidence has strengthened somewhat.

"We have been seeing an uptick and slow recovery for the industry," said Ellen Hopkins, spokeswoman for the National Marine Manufacturers Association, a Chicago-based trade group.

"Last year was the first time we started to see some growth," Hopkins continued. She said the group anticipates a 10-percent growth this year over 2011.

Figures from the marine manufacturers association show just how far sales had fallen. Total spending on power boats, trailers and accessories in North Carolina totaled $504.3 million in 2008, but by 2010 had plunged to $360.9 million, according to the industry group's figures.

Last year saw an 11.6 percent rebound in the state, however, to $402.8 million, ranking North Carolina No. 7 in the nation in expenditures.

Local impact

"It's been difficult but we're certainly coming back," said Tricia Bennett, president of Bennett Brothers Yachts, which does restoration and repair of craft ranging all the way up to Coast Guard cutters.

"There's been an increase in sales, which started about mid-year. The low point was about two years ago, and it's been slowly coming back. People put projects on hold."

Intracoastal Yacht Sales in Wrightsville Beach had a better year in 2011 than in the past four or five years, said Ric Stanley, broker and owner of the company's Wrightsville Beach location. Intracoastal also has locations in Charleston and Little River, S.C.

Intracoastal typically sells 35- to 45-foot yachts for about $80,000 to $200,000, Stanley said.

But the buyers -- "business owners or people that have done well for themselves" -- mostly are paying cash, Stanley said.

Kind of like the housing market, "Buyers are realizing that you can buy more boat for the money than you've ever been able to," he said.

Business at Atlantic Marine in Wrightsville Beach also has been healthier than years past, said sales representative Brent Floyd.

"The majority of what we are seeing ... is the buyer hasn't stopped, but he's not buying as high on the pole," purchasing a 28-footer rather than a 30, for instance," he said.

Most of Atlantic's boats start at $45,000, but average $100,000, Floyd said.

Prices nationally are mixed, according to the marine manufacturers association.

While the average price of a traditional new power boat rose 3.5 percent last year to $35,800, prices of used boats -- 81 percent of the market -- continued to falter.

The average price of a pre-owned traditional powerboat with engine fell 7 percent from 2011 to $10,612, the trade group said.

Small is big

For the most part, smaller boats have been leading the recovery in sales nationally, the boating trade group's Hopkins said. Aluminum power boats and fishing and pontoon boat sales were up 4 percent in 2011.

The trend toward smaller has shown up locally in the boat slip market.

"There has been an improvement both in rental and sale of slips in the last year," said Kraig Marquis, dock master at Anchors Bend Yacht Club in Wilmington and a real estate agent for Intracoastal Realty. "However, at least at Anchors Bend, it seems that the type of boat has gotten smaller."

Lease rates range from about $10-$15 per linear foot per month, Marquis said. A 20-foot boat would be $200 to $250 a month.

Previously, the club was getting closer to $15, but "we were leasing to larger vessels. Now the center console boat is a more common tenant than the 40-foot category we had in 2006-2007."

In Brunswick County, Southport Marina has seen "a little bit of an uptick but not as much as we would like," said manager Hank Whitley. It offers lease rates from $7 a foot with a year's lease.

Dockage facilities vary widely "depending on location, amenities, whether dry stack or wet slip, where they are located, on the river or the Intracoastal Waterway," Marquis said.

Prices vary accordingly.

On Wrightsville Beach, you're looking at listing prices of $3,000 to $4,000 per foot and up to buy a boat slip, he said. But by comparison, the rate would have been $5,000 to $6,000 in boom times.

On the other hand, in the Cape Fear Marina downtown, listings about $1,500 a foot range and around $1,000 in Carolina Beach, Marquis said.

Though prices continue to lag, sales are increasing.

There currently are 83 slips -- in-water and dry stack -- for sale in New Hanover County, Marquis said. Sixteen have sold in the past 12 months at an average price of $29,000, and four sales are pending.

In contrast, only nine slips sold from 2008 through 2011. In the peak years of 2006 and 2007, 26 sold.

Marquis is heartened by the pace of sales now, but he stressed that prices are much lower than the peak years.

In other words, good prices and distressed properties have brought out the buyers.

Homes with slips

Sales also have rebounded for homes with boat slips, said Chip Berry, an agent with Intracoastal Realty.

So far in 2012, 91 houses and condominiums with slips have sold in New Hanover County, according to the Wilmington Regional Association of Realtors' multiple listing service statistics. That compares with 82 for 2011.

About 110 such properties are on the market now, Berry said.

Slips contribute to a home's appraised value, he said. But that value is stagnant right now.

Though sales of homes with slips have risen the past three years, Berry said, the price per square foot has remained about the same.

The good news is that bargain prices and good inventory are slowly luring the buying public back to boats. But another factor is more central to a rebound.

"Boating sales follow consumer confidence pretty closely," said Hopkins, of the National Marine Manufacturers Association. "When you see rises in confidence, you will see increasing boat sales."



Source: (c)2012 the Star-News (Wilmington, N.C.). Distributed by MCT Information Services.