Boats and the housing market

I was speculating that the housing market is going to really take a big bite out of the boat industry... especially the $40K+ type boats like most of the ones talked about on this site.

I think that alot of people pay for their boats(like I did) by getting a refi. Since most of the loan programs are gone and the rates are through the roof, I think boat companies will really suffer....especially start-ups like Epic.

What do you guys think?

i would think you are fairly right on the money..

house's... cars... boats.... construction.. public works projects... if everyone is afraid of a bad market no one is willing to risk any extra money

There are more boats out on the lakes than ever this summer, even after the housing market "went down".

And there's also more than ever for sale it seems as well. Just look at Craigslist, virtually new boats and more than ever before labeled "must sell now due to financial situation". I'm even starting to see some that say "loosing home, must sell". People are actually taking losses to dump them.

I think it will slow boat sales down a lot by next summer.

And there's also more than ever for sale it seems as well. Just look at Craigslist, virtually new boats and more than ever before labeled "must sell now due to financial situation". I'm even starting to see some that say "loosing home, must sell". People are actually taking losses to dump them

Hey, how do you "loose" your home.

I sure hope less people will be able to afford new boats

Better water for all of us.

Without a doubt there will be a lot of people getting rid of their boats and other luxury items. Those people in debt to their ears will be the first ones of course.

Quote: Hey, how do you "loose" your home.

Foreclosure.

http://en.wikipedia.org/wiki/Foreclosure

The joke was the spelling. You can "LOSE" your home not "loose" your home.

I hate to see people get into those bad situations, especially with kids and such. Local dealer says business is at a stand-still right now...

I hate to say it but thats why the only two things you should ever finance are a house and car. Pay the car off then get a boat or do like I did. Last year bought a semi new I/O and started saving. Next year will buy 25-30k wakeboard boat CASH. Credit is a good thing to have but with variable interest rates and such it has just put people in a tough situation. I really do feel for all the people who are losing their house and have to sell their toys but also hope they learn their lesson and pass that knowledge down to their kids so the same mistakes are not made over again. Last thing. Live within your means!!

Trevor, I agree that people should live within their means. But it's not always best to spend your cash depending on what you can do with your money. If you can finance at a low rate, say 6% maybe even 7%, you may be better off letting your $30K make money for you through investments. Sure you may have a $400 a month payment but you can make more than that through proper investing on a monthly basis.

I agree that the housing/finance market is going to hit hard though. We've already seen that. Sucks to see people losing their homes, etc.

I believe that the housing market will continue to crash. Unfortunately for those who will lose their homes, I don't think we have seen even close to the worst of it. However, IMO, I don't think the wake boat market will suffer too much. It seems to me like there are too many people who love this sport and are dying to get into the quality boats to let supply outweigh demand enough for prices to drop significantly. Just my two cents.

if you make enough $$ to buy a boat or good credit to even finance it (i didn't have 50K lying around) then go for it. everyone's situation is different, priorities, needs, etc. so have fun dammit!! as long as you are smart and plan it out right, but yeah, i wouldn't suggest refinancing your home to purchase a big ticket item such as a boat right now, not with our current property values plummeting

Can any of you experts help me get some of my real estate appraisal assignments done tonight or maybe my Masters of Real Estate Development homework?

Thanks,
Ryan

im glad i live in portland and real estate is still continuing to rise

bocephus, if you owned a home in nor-cal, you would feel our frustration

I live in the heart of the frenzy, the greater Phoenix Valley and have seen all the "smart" California investors buy houses for twice what they are actually worth. When I come in low on the appraisal they call me up and yell at me and tell me how stupid I am. When they can't find a renter to actually move in and pay the $5,000 a month rent they provided the phony lease for to get the financing and now can't make the payments they try to sue me!!! LOL, suckers then have to pay my legal fees with the juice running and damages - my lawyer is good!! What they don't know though is that the banks that are letting them do the short sale or taking back the properties are going to 1099 for the difference between what they sold/took the property back for and what they owed!! It's called taxes on GHOST INCOME!! They will then have an IRS lien and probably lose their primary residence after homesteading what they can!! It's the domino effect big time!! Stupid investing is stupid investing!! I promise it is going to get a whole lot more fun in the next year or two with all the ARM's coming to term and with no one left to refi these fools! They are all going to be stuck with 9-12% loans!! I hope you all have your seatbelts and helmets on!

The real kicker in this deal is going to be the lack of subprime lenders willing to refi these people out of their ARMS and the 1099 on the GHOST INCOME, you watch and see!

ouch that's gonna hurt. i'm glad i got locked in on a fixed 6yrs ago. back to wakeboarding, this is depressing

Another sec that is hurting is the townhomes. Take an example that Ive seen ppl go into these for 200k just barely making the payments, now the ARM is adjusting and they want to refinance right? However there is a curve ball townhouses next to them are still vacant from the builder and he is selling them for 170k just to get off of them. All the while the ppl that bought the 200k invested and finished the basement,etc. And now the townhome is worth less then they owe ex. maybe-180k and they cant even refinance since they'll need 20k+closing fees to do so. And no appraiser will put there name on a high # TH.

Not to mention there screwed either way like BOcephus said since there ARM is adjusting to 8+ %.

Just plain old horrible, and that is only one section of the problems. Think about all the forclosures,ppl that are trying to get out. Its just a Fu**ing mess

It's a buyers market.

I was listening to a nationally renown economist about a week and a half ago and things are going to get much worse before they get better. The population as a whole is carrying more debt than ever and disposable income has basically vanished. So many people got interest only home loans while the housing market was good, now they can't sell and the prices are dropping. This is causing people to try to free up some cash by selling some of their "toys" and they are selling them at a discount to get rid of them.

If you are fortunate enough to not be one of these individuals and are in the market for a new (used) boat your choices are going to be good.

The key for the ARM problem is that lenders, at a certain point, are going to be willing to work with buyers to modify the terms of the original note, or do a "no-cost" refi (a la Countrywide) to avoid foreclosure. Lenders don't want to foreclose any more than owners want to be foreclosed on.

Kind of brings up another point that ski boat manufacturers other than I guess Moomba etc are really pricing the average guy out of the market that wants to take his family out wakeboarding etc. The cheapest MC,CC,BU you can get your hands on is maybe mid 40's if your lucky. Houses and cars you have to have but boats are definitely a luxury item but what a way to do things as a family.

I just bought a home in early March from a person in California that bought it 1.5 years ago as an investment property. She bought it for 197K and tried to sell it for 229K. Well she bought at exactly the wrong time. The housing market started to drop off big time. After 1.5 years and a new asking price of 199K, she was getting foreclosed on with 17K in back payments owed. We picked it up for 183K. 1.5 years old and never lived in. Guess we all get lucky at least once in a while. She took it in the shorts on this one and I found another property online she was being foreclosed on in California. That one was 565K and she was 18K past due on it.

Buy a Houseboat.

30year fixed at 5% on my lakehouse

My girl is in RE in Az and it's insane here. Bo is 100% correct about local economics. I have no idea about anywhere else. There's articles in the paper about how many homes go into foreclosure every day (hundreds?). I am curious to see what the local gov will do to regulate this mess. Chandler, Mesa, Anthem, Surprise, and outskirt towns are turning to ghost towns and getting run down. The concern for the used market is that people with no spare income don't take care of things. Boats get on the water but no oil changes, props get bent they run em regardless, messed up impeller goes untouched because "it's only a little hot". I would be worried buying a boat from someone in a desperate to sell situation because of the lack of money to take care of the gear they bought and passing on these simple issues which go unmended till it's too late and on you now. Buyer beware.

Shawn,
How do you know how much she was past due? If the bank is releasing that info, that violates about every privacy policy out there. If I were her, I would file suit.

The house she had in California had the amount posted online. I was told by my realtor how much she needed to come up with. She was short selling the house and we were continually getting letters in the mail in OUR name saying the house was going up for auction if WE didn't come up with the money. This was AFTER we signed for the dang thing too. It was a mess but eventually worked out.

(Message edited by helinut on August 28, 2007)

Paul,
If you have a house you probably have a Deed of Trust, not a mortgage. If so go home tonight and read it, I can almost garauntee that it has a full disclosure clause in it somewhere pertaining to a trustee action allowing full disclosure to a potential buyer on the scenario of a short sale or foreclosure.

I haven't read all there is on this mortgage mess because quite frankly, I'm busy and it hasn't affected me yet. So I hope I'm not off-base here but the way I see it is that people have been making a lot of money for a long time in CA real estate with the extraordinary property values, not just in flipping housing but in building great amounts of equity in relatively short periods of time due to the amount of money involved. My sister just sold her house in San Francico and nearly paid cash for a much larger home with a pool out in more rural CA. In comparision, my mother has a house in NC that she bought in 1978 and it's only appreciated $200K in 29 years.

These people with ARM loans have been banking on predicted increases in property value to make on them money instead of building equity by paying down the amount owed. They took this risk in sometimes overvalued and expensive markets and got caught.

The local market where I live, Austin and it's surrounding areas, is strong but it wasn't overvalued in the first place and due to affordable housing people didn't need ARM loans to afford to buy nice homes. Prime lake front property is about the only areas I know of in the area where there may be the exception.

However, what I fear is that although I made what I believe to be sound investments and smart decisions, that the mortgage mess in these previosuly overvalued markets will impact areas that have been far more prudent with thier money.

When my brother-in-law lost his job a few years ago in CA and they were stuck with an outragous mortgage, something like $5K a month, I don't see how they made it. I've lived in CA and the way I see it is it's a big gamble. You can make a lot of money, cash out and move to somewhere more affordable or you can get yourself in a real bind. If you needed an ARM loan to afford the property and can't make the payments when the rate goes up, regardless if you planned to sell it beforehand or not, then you made a dumb investment. I don't understand why you would still have a house within 1.5 years of that magic date when the rate is going to go through the roof. If you planned to stay in the house longterm then you were just stupid, ok maybe 'overly aggresive" by going with the ARM loan.

Texas is where it's at people. Nice cities, no state income tax, nice lakes with a 8 month season before you need a wetsuit to be comfortable, affordable housing and Austin is the live music capital of the world so the bar scene is pretty damn good. Convince your neighbors get out of CA and move here and continue to drive up my property value. I just don't want you all here taking up the good water.

Our housing market is def. slowed down. There's just so many houses on the market. However we sod our river house in 5 days and bought another house in town. My wife is pregnant and I can't have the new boat, house on the water, etc. So i got rid of the house we were very lucky. However I still don't think it has affected the boat sales, either. Our local dealer is still selling the crap out of them. I dunno

Our Texas lakes are too crowded as it is...stay away! Plus, rednecks don't like pretty people from California :-)

its crazy to hear about all these slow downs in real estate and 1 block from me then just put up 3 new houses from $600-720K!

In AZ the house ranges that are doing the best are 1 million dollar plus! The rich aren't affected by silly housing booms...

yeah it seems like here houses $500k and up and still doing well, real estate as a whole in portland has continued to climb while its been falling everywhere else.

its just hard to believe that a house could loose value anywhere!

There may more houses on the market here but it seems like every new house around me seems bigger and more expensive than the next and they're selling.

Williamson county north of Austin is still predicted to increase between 8-10% over the next year.

What I fear is that although I was responsible and can pay my fixed rate mortgage, that these people that are facing foreclosure due to rising variable rate mortgages on homes they could otherwise not afford will kill the value of my property one day. I think that's how this irresponsible lending will bite us all.

I sold a house several months ago in 2 weeks at full asking price. They even bought my fridge for $500 on our way out the door. There were houses everywhere for sell too. I think it just came down to 2 things: Rising population and a well maintained and decorated home that people liked.

Entrust... when I talk about affordable housing this is what I mean... My 4 year old, 2950sqft house, overlooking woods and a creek in the back yard, with granite counters and wood floors in a nice, quiet neighborhood, one that prohibits parking on the street with roughly 1/3 of the yards of taken care of by professional landscapers is valued at about $250K. This is 20 min north of downtown Austin. Now at the end of my street there is a new sub-division going up starting at about $300K. $600K-$720K would buy you a nice house on the lake in Austin. Although you could always spend more.

Caution for all you West Coasters... if you do come to TX you will need a 3/4-ton diesel 4x4 with no larger than 18" rims to pull your boat to the lake. It's just the way it's done here.

Bocephus,

You're probably right about that. My step-mother works for a real estate office on Topsail Island, NC and my dad and her have a house there for sell. The Island is either retired people who always wanted to live at the beach or vacation properties for rich people. There are more houses for sell than not. It usually has a high turnover rate anyway. The older cheap places are selling, most likely for the land so that they can bulldoze the house and put up something more high-end, and the newer $1M+ places are selling but anything between $300K-$750K is not.

damn chad im moving to austin!! a house like that here would be $800K and up!

a half way decent house here is $400K and up

not for long!

Entrust...bring it, Austin rocks!

I still laugh when I talk to my parents and they tell me about the 1st house they bought in Florida (3bd. 2bath on 2 acres next to Lake Okeechobee in 1978) for 45K, and they were sweating bullets on how they were going to make there $400/mo. mortgage.

Now in Monterey County.... If your young...good luck. You need dual incomes (150-200K combined) to afford a home around here.

Chad, I'm jealous...your home would go for 900-1.3M around here.

It turns out I was wrong, the house would now sell for about $270K instead of $250K.

Don't get me wrong, there are some very expensive neighborhoods in the Austin area. You have your nice neighborhoods and then you have your prestigous neighborhoods just like anywhere else. The funny thing is there is a neighborhood near me where everyhouse there is over $1M and then literaly 1/2-mile down the road are $150K homes. You can spend whatever you want.

I don't see how you guys pay for $1M homes. I used one of those calculators online that compares cost of living in different areas it turns out that a person making $100K a year in Austin needs to make $186K in the bay area of CA. I doubt there is that much of a pay difference in the areas. You would think the buisnesses would relocate for cheaper talent.

Speaking of the housing market and boats, im a boat salesman, and this was going to be my career for a long time, yet after this season, there is really no reason for me to just sit here and wait for nothing (minimal traffic, and less buyers) while working every weekend of the year. Im Out! Friday is my last day, Tower Park here I come, im gonna enjoy a holiday weekend for the first time in 4 years! Hell ya!!!

I always wondered the same thing, but what do I know.

No doubt about it, boat sales will be way down.

There is so much uncertainty in the housing market that people are just not going to buy new boats. Yes the super wealthy will still be buying them but average Joe can't do anymore "cash out" refinances and certainly needs to think twice about buying big ticket items on his/her home equity line of credit.

Mortgage interest rates are high right now especially for loans over $417,000 and there are not a lot of loan programs left either. The secondary market (wallstreet) is currently repricing how they buy loans from mortgage lenders so hopefully when this reprice is down it will open up a few more doors for people to refinance by bringing back more loan programs. We'll also see what the Fed does if anything at all to help eliviate some of the pressure of maturing arms; I'm not saying this is or isn't the Fed's job...thats probably another debate to have.

I live in Seattle where home values are still increasing and I'm hesitant to make any big financial commitments. Without a doubt keeping the house for me and my family is more important than buying a new boat and having fun.I sold my boat and don't have plans to buy another one soon either . The housing crapper could hit Seattle anytime so I'm trying to prepare for it.