Turning the corner?

J

JamesTXSD

Active member
Two things that I read today lead me to believe that we have turned the corner... maybe the worst of the economic downturn (especially in the boat industry) is behind us?

Marc Grove's Wefings newsletter came to my in-box this morning...

http://wefings.com/newsletter/42-latest ... l2010.html

Marc's newsletters are always informative and entertaining, this one just felt good to read. Check it out.

A friend of mine made a post on one of the sailing forums regarding the Ft. Lauderdale Boat Show - more boats on display, more boat stuff, and more people. And people seemed to be buying stuff. Unlike last year's show.

Good indicators. Good time to buy a boat.

Best wishes,
Jim B.
 
Jim,
I think it may depend on where you live. In my discussions with people in the marine industry--boats are being built pretty much to order. The delivary business is still extremely slow--almost non existant in some areas.

In our specific area, water front houses are going for less than 50% of building costs only a few years ago (costs are more now). Unemployment is still extremely high--even higher when you look at those who are under employed or have stopped looking. Even our rental market (unless you will take section 8) is the slowest it has been in many years.

Business starts are down--Today's financial news shows that incomes and spending for the last month measured (Sept) are down below where they were.

For us older folks, the printing of more US dollars, along with its weakness, suggests inflation may be around the corner.

I hope that I am wrong, and that things improve. But there are still a lot of unknowns--such as where taxes will be going, which still impact the boating discresionary spending. Also folks who were going to retire, are still putting it off a few more years; saving more for retirement.
 
Here is my own unscientific barometer (single data point) of the economic situation:

My 800 number for my business is one number off of the number for the catalog of national mail-order company. Two years ago I was receiving several wrong numbers per day. It was so annoying that I sent all my 800 calls to voice mail and screened out the ones that were actually from my customers or potential customers. Last year, I changed it back to ring my cell directly, as the wrong numbers dried up from 7 or 8 per day to zero. In the last couple of months, the miss dialed calls are picking up. I am now getting about two per day. So that proves to me that at least this national company's business is picking up. They must be getting a tremendous number of correct calls, if I am getting this number of incorrect ones.

Conclusion?:

The world has not come to an end yet and life goes on.
 
Hey Dr. Bob,

Always great to hear from you! Oh, I sure didn't mean to paint an image that all is rosy. I am aware that Florida property values have taken a real hit. Our little home is on the water here in the Tropical Tip; values here did not take the big dive that some areas experienced... perhaps 10-20% or so, but sales are still slow. Yet, new homes and condos are being built here.

It may be a long time before we see boat dealers having lots full of inventory. From my perspective, boats made to order is better than no boats to order. I see the signs as improvement.

I hear the laments that the current younger generation will be the first to have a lower standard of living than their parents. However, there is an entire generation of baby-boomers who will be (and are) retiring; people who are used to working hard to get what they want. They've felt the pinch, but they don't want to see their dreams denied. They may not buy the 42' cruiser, but if boating is their dream, an economical cruiser can be the answer.

I know you also enjoy RVing. In the RV forums, I see more people who are interested in buying full-time living RVs. Not because it is a cheaper alternative to their homes, but because they have planned for years to do this. They're ready to travel. The maker of our 5th wheel considered stopping production; actually did for a few months. Then came back with a re-focus on the market that was under-served due to many of the top end manufactures going bust. They restructured their business model to serve the buyers who are out there. No haggle pricing. Units built to order. And it is working. They are not building the numbers they once did, but they have orders. Buyers are willing to wait for a few months to get the unit they want.

I see all this as encouraging. Especially after the past few years. Are we back to Happy Days Are Here Again? It might depend on the local perspective, but I see we have a long ways to go. One step at a time.

Build what buyers want. Dealers who provide support. Manufacturers who listen to buyers/owners. From a time when manufacturers couldn't keep up with demand to where we are now, this was not just a downturn, but a real change of our economic lives. We've all seen, felt, and lived these changes. It is different on the other side.

Glass half full or half empty? I've said this before: I'm just happy to have a glass. I don't have my head in the sand. As a kid who started with nuthin', I don't want to go back to that. I'm happy to see that people who feel that pull to be on the water (or on the road) have the opportunity to order the unit that will allow that. As buyers come back, the job situation will improve. The tax base will get better. It won't happen overnight, but there has to be a time and a commitment when we see that improvement begin. I'm encouraged.

Best wishes,
Jim
 
m2cw is 2010 has been a blessing. One child in college. The other is starting to drive and doing well in high school. The Admiral has retired from working 60 -70 hrs per week plus three times per week having a 2 hr conference with a group in Singapore and now making glass beads. All 3 properties are paid in full plus a FEMA flood buyout and now just have 2 homes but there are alot of foreclosures in Cape Coral so might buy another FL home.
I guess I live by What is the hardest math problem in the World?
A. Taking time to count your blessings
 
From today's Kiplinger Letter: Jobless rate will not start a sustained downward trend until mid 2011. Even then it will remain over 9%. What distrubes me more is the "long term unemployed". Currently at 4.2 million, and the prediction is that most of these will never work again.

The biggest worry for those who are going to retire is inflation. If we have inflation--and I belive that it is coming shortly--then they will hurt the most. My mother in law retired as a teacher in 1970, she lived until last year. Her savings, social security and PERS pensions were not enough to pay for her most basic needs even with the low inflation rate we have had recently. We supplimented her needs for the last 10 years. If the baby boomers children have less than they do--can they sustain the boomers in their last 10 years?

So how much do you have to have to retire? How much income, how much staging of income and how much savings? This is a major question which faces those "baby boomers" who are looking at retiring now. Many of the RVers (and boaters) I correspond with are going full time. This is ok for some time--but at a certain point that no longer becomes practical. I always advise that at least have some rental property to fall back on, if you have to for a primary residence. Both RVing and boating have become much more expensive (especially the bigger units) in the recent years.

It will be an interesting time--and I do hope that industries come back--and people can afford to buy boats and RV's. (We saw a number of large RV lots which were basically out of business this summer) At least many of the boats and RV's are still made in the US. Unfortunately the large mega yacht builders in the US are not doing well--maybe next year--
and I look at these from the job's standpoint. Vs those built in the Orient or other areas with less costly labor....
 
The comments are especially instructive.
Click to expand...


Here's a good one...

"The dollar will be debauched. Hyperinflation will rage. Economic winter will settle in throughout the world. Protectionist forces will compound the problem. There will be mass unemployment throughout the world, worse than the 1930s. Social unrest will lead to the rise of extremist politicians with their own "solutions" to the problem.
My advice, dear readers, is to buy gold and silver coins, sacks of rice, flour and tinned goods, candles and a shotgun."
Click to expand...
 
I agree with Bob in that it depends on where you live. I own commercial and residential properties in Madison, WI and have made it through the recession so far with 100% occupancy on both commercial (small business retail mainly) and the apartments.

The difference is that Madison's employers are mainly the State of Wisconsin, City, and County along with some major insurance companies - all this keeps us stable. Right now our unemployement rate is 5.1% and falling.

We also did not have the huge runup on real estate prices, so we don't have the foreclosures like other areas do. Recently I went to Cape Coral to look for properties to purchased and could not believe the scope of all the properties bank owned.

I'm just thankful my business assets are in Madison.
 
Jim has brought up the subject of the economy, continuing a discussion begun way back in January '08, when it was suggested we were in for a downturn for the economy, the boating industry, and all of us as boaters. ( http://www.c-brats.com/viewtopic.php?t=12747&start=0 )

The popular news is full of economic discussions right now, and the ideas expressed by others in the earlier thread and this thread are interesting and informative to read.

Our take:. Much of the recent downturn was initiated by a bubble in the housing market, and this had a profound effect on the credit markets (that were a primary cause of the problem in the housing market). Uncertainty has prevailed for all of us as the Great Recession shook the economy. It DID affect the boating industry (and most all industries in the US) and each of us as boaters (some more or less, depending on location and our individual economic circumstances).

What now? The stock market is often a leading indicator for the general economy. Many companies are reporting fine profits for the past quarter and the market is responding with a nice uptrend. There are other signs, as folks have noted on this (and earlier threads). The economists whom we respect are generally reporting that we are indeed moving toward recovery. As they predicted a year ago, the job recovery will be slow with this kind of recession - housing bubble pop and uncertainty going forward.

Interesting times.
 
Hi,
Without getting into politics to much, the recent events which shivered the timbers of the donkey group; will hopefully change the way business in general is perceived by Washington. I think much of the rhetoric / distrust around health care issue was caused businesses not knowing what the actual costs/tax ramifications, would be once the dust settles. Other issues such as foreign affairs, mounting national debt, the dollars weakness against other currencies does not do much to set the stage for expansion and hiring of more people. From a independent view point I'm thinking the mid terms got someones attention. If this does not work It will be time to pull the flush lever again if the newbies don't get the job done. Fortunately for me our homes value never really changed aside from our business being off by a third we were relatively unaffected by the down turn. Our 401k's have rebounded nicely. We made some adjustments, cut back on expenses, shopped insurance in general very hard, took advantage of our buying power and are still showing strong earnings. We tightened up accounts receivable and took discounts on payables. I think our area remained much less affected than parts of Ohio and Michigan. If I had one wish I would hope that Washington starts taking the deficit more seriously both republicans and democrats included. Amen Brother :disgust
D.D.
 
I agree with Bill and El. My own view... Forget the election and politics. Economies ebb and flow naturally and as Bill said the real issue was over valued, over leveraged housing. That bubble burst and rippled.

We were in the process of downsizing from large home to smaller home on a lake in preparation for retirement. Large home sat empty on the market for 18 months and sold for far less than it would have two years earlier but it sold. Large boat (40' Searay) sold for significantly less than it should have but I'm realistic and the price I got was the best price I was going to get.

Our investments have pretty much recovered, our retirement postponed by a year but now on track for end of February, We got a good deal on additional property next to us because of the depressed market, got a good deal on our C-Dory and on a Bennington pontoon, and in general feel pretty comfortable going forward.

I have friends who've been less fortunate, thrown out of work and struggling with what to do. I've been there in my career and I know that can be difficult to deal with but, things do turn around, people find a way to prosper, and after all, for those of us in the US and Canada, we have a heritage of moving forward and succeeding despite the odds.

So for me, I'm optimistic.
 
I sure didn't mean to imply that all is well and we're skipping down the road to recovery, picking roses along the way. As occasionally discussed here, having no debt and not being in a "threatened" job situation makes as much difference in perspective as does location on a personal level.

There hasn't been a lot of optimistic news in much of the boating and RV industry in the past few years. Seeing Triton producing boats, reading Marc's upbeat newsletter, seeing the reports on bigger crowds and more vendors at the Ft. Lauderdale Boat Show, reading reports of increased orders from the RV manufacturer that we follow, and the current stock market upturn (yes, I know it can go down just as fast), is all encouraging.

I put the RV market reference in here, not because I think it necessarily pertains to all C-Brats, but because these industries are similar indicators of leisure activities that depend on a good chunk of discretionary income. Both industries were decimated over the past few years, and we're now seeing how some some in those industries have adapted to survive. We may never see the "push 'em out the door" days of production, but some sales are better than no sales or padlocked doors. Build to order may be the only way for a while.

The national psyche was slammed, consumer confidence plummeted, and everyone suffered in some way. It seems that some folks are looking to buy again. I see that as a good sign.

Thanks for the discussion.

Best wishes,
Jim B.
 
People who's only motivation in life is to push a button or to wipe a table 'when told to', are going to remain unemployed...

I have a fella in my practice with a bad back who(5 years ago when times were better) was told he would never work again and to go on welfare...

He and his son bought a $10 lawnmower at a yard sale and a $100 dollar trailer and started offering to mow lawns... Today he employs 6 full time men, has two brand new pickups pulling trailers/zero turn mowers/blowers/hand tools and goes like gangbusters all summer, daylight to dark, 6 and a half days a week... In the winter it is slower but the crew works plowing snow, shoveling, clearing iced up gutters, etc...

I have another patient who does only building door and window repair/replacement... He does not advertise and works strictly by word of mouth referral... He is fast, and meticulous... Everyone in the area knows that if you want the job done right, you call George..,

I have others who are without work for years now... When I gently suggest that the try this or that, or that I heard so and so needs some part time help, I get a flurry of excuses.... They will never work again as long as there is a welfare check in the mail - perhaps they have a full time job and we as a society refuse to see it?
 
The "housing bubble" was only in effect in certain parts of the country.
When looking at properties in Florida for example, one selling point always listed is that a place now selling for 60 g's, sold in 2006 for 228 g's (just an example). Certainly no selling point but it's always in there.

My recent research into boat buying show that the boats I have most interest in have been on the market for more than a year. They also seem to go for real big money. I understand why the old monohulls are so popular and wonder if there was a boat bubble that hasn't really burst yet for the more sought after boats (like the buble for choice real estate markets)?

Thanks for your thoughts-
Kenny
 
Here in the Seattle area I have definitely seen a sustained decline in the asking prices of large fiberglass boats. I don't know if I'd call it a bubble per se, but I've seen 45' Bayliners dropping from the $180K range a year ago to the $130K range today - and they're still not moving. Moorage costs have not declined, or maintence costs, so owners are having to take huge haircuts. And people are deferring maintenance - the small yard that works on my boat is slow but has a backlog - the small yard next door to them has zero work in the pipeline.

There are a number of these 45' to 50' boats in my local yacht club that have been for sale for a year or more with no prospects in sight. It's particularly noticable because members are having to wait significantly longer to get moorage there than was the norm a few years ago.

There's a really nice, stabilized 58 Hatteras there for $250K and the owner says the price is soft and he's willing to finance. He bought a 70' and is extremely motivated.

Smaller, trailerable boats seem to sell, though they seem to remain on listing sites longer than in the past. Still, a VERY well priced popular boat - I've been watching Arimas, C-Dories, and Sea Sports - will sell in a couple of days. But these are mint boats, 4-strokes, decent electronics, and totally turn-key. Project boats...those seem particularly challenged.

Also, sport fishing boats in California seem to have been a bit harder hit - they have been experiencing declining fisheries and increasing restrictions and I'm aware of several owners who have become discouraged but found the market softer than they expected. I've also heard the same thing about sport fishing boats in the Boston area.

Well, that's just how I see it...
 
thataway":1dzg0u15 said:
My mother in law retired as a teacher in 1970, she lived until last year. Her savings, social security and PERS pensions were not enough to pay for her most basic needs even with the low inflation rate we have had recently.
Click to expand...

Rank and file public employees, they make a meager salary and an even meager pension, but some folks are outraged even at that.


I think the bottom line to our economic situation here in the US is, the standard of living here is going down, there's no denying the simply fact that we do not produce as many goods as we use to. All the goods we buy from China simply takes money out of circulation here and puts it in circulation over there. There is generally a world average standard of living. If it rises in some countries (China, India, Brazil), it's going to fall in others (US, most of Europe). the question for us is, is our standard of living going to go down for everyone and by how much?

-Mark
 
A number of excellent points. For example, I had seen the listing on 58 Hatteras in Seattle for 250 K--but there is one in San Diego for $159K and I suspect you can buy it for less....There is another in the Seattle area for $199K, and similar ones which have sold recently sold for $79K and $110K. (granted that the decor and some systems may be in better shape in the more expensive boat.) I have a neighbor with a 72 foot boat for sale, and his point is well taken, that in order to buy that boat, you either have to have waterfront property where you can keep it, or live aboard. The dockage for a vessel that size is so expensive. It used to be that the 25 foot boats were worth what a few months dockage costs--now it is creeping up in size!

Yes, there are some areas where real estate has not gone down. It can even be neighborhood related. My son lives in San Clemente where real estate is down at least 25%--and little is selling. My daughter lives in Culver City, and in her area, real estate is still slowly going up in price, in her are, homes don't stay on the market long.
 
I think the bottom line to our economic situation here in the US is the standard of living here is going down, there's no denying the simply fact that we do not produce as many goods as we use to. All the goods we buy from China simply takes money out of circulation here and puts it in circulation over there. There is generally a world average standard of living. If it rises in some countries (China, India, Brazil), it's going to fall in others (US, most of Europe). the question for us is, is our standard of living going to go down for everyone and by how much?

-Mark

the NAFTA (North American Free Trade Agreement) was a product of a Corporate "New York think tank" spent millions lobbing and selling it to our governments .. came into effect 1986 and within 6 months 20,000 production jobs went to Mexico .. that was the trickle before the stampede ..

Joe average in North America is now along side every third world country, Commnist country, (young lives lost fighting communisn???) North American corporations were lined up at their doors to get in.. the cheapest labour supply "wins" in the quest for jobs related to production lines .. North America INCLUDES CANADA so don't go Polictcal its just my silly opinion not a rant .. the Corporate Elite average salary 7m for their good work and are laughing at us .. the one survey has the average wage in Canada at 42,000 the other !% are hideing in gated communitys their so damned rich .. lol .. i pick this up out of the Library over the years .. not my research .. WC
Click to expand...
 
Back
Top