Buying & Selling in a Changing Economy

When life gives you lemons...

By Amanda Comission

Even a 12-year-old managing a lemonade stand grasps, at least theoretically, the concept of supply and demand. No matter how great that lemonade tastes, unless you’re set up in the middle of the desert, no one’s paying $10 for a glass. Well, over the past year or two, those in the market for a new boat have essentially been looking to buy a glass of lemonade in a field of lemon trees.

The U.S. economy was hit hard and fast a couple of years ago. Since boats are luxury items (even though they might FEEL necessary some days), the market dried up faster than the big manufacturers could respond. This dramatic drop left a huge excess of inventory in the pipeline. More available meant lower prices.

With cutbacks, factory shutdowns and other adjustments, boat builders south of the border gave the market some time to begin to absorb the extra boats. Sales and promotions meant deals were to be had, especially on brand-new prior year models (new non-currents). The addition of “new non-current” to the NADA guide points to how much of these were available.

Now, as the cloud begins to lift on the doom-and-gloom, manufacturers are beginning to ramp up production – but very conservatively. In order to gauge where the market is at and where it is heading, they will be building more to demand for at least the next couple of years. This means less new boats will be available. Of course, less availability means higher prices.

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