The Luxury Yacht Market is Changing
It doesn’t take an economist to understand the affects that COVID-19 is having on our everyday lives and neighborhoods. The pandemic has left no industry untouched, including that of the luxury yacht market. Although we are still in the early phases of understanding virus’s implications on our industry, at 26 North Yachts, we have been very proactive in gathering information and putting together best practices for clients who are navigating the waters right now.
It’s easy to assume that there will be deals available as dealerships and yacht builders begin to liquidate their inventory. However as of the writing of this article, these deals are not yet publicized. When will the prices on these yachts come down? And what should sellers expect to happen to the prices of their brokerage boats? Should a seller react to the current market, or wait and see what happens?
These are the questions our brokers are hearing daily. We’ve come up with a list of five tips for those who are in the market to sell their luxury yacht during this time of uncertainty.
We are hosting a series of webinars every Wednesday at 10:00 am ET to discuss the rapidly changing market. You can register for access by clicking here.
Tip #1: Keep an Eye on What the Market is Doing – It is the job of your broker to keep you informed on industry trends. At 26 North Yachts, we are seeing that currently everything is on hold. Panic has not set in and prices on luxury yachts are not dropping. There are many buyers on the market that are keen to take advantage of a deal. Currently, brokers and builders are still closing out deals that were made prior to the pandemic, so no real effect has been seen yet. However, we believe in the next couple months, this will change. Sellers who are keen to sell their boats should take advantage now, rather than wait for a potential weakening of the market.
Tip #2: Remove Obstacles to Showing the Boat – keeping your luxury yacht at an easily accessible and secure location is now more important than ever. Be sure your broker stays in communication with the Captain and that no crew is onboard should a showing arise. Be mindful of social distancing and have the crew disinfect the vessel prior to and after the showing to keep everyone safe. Buyers are going to be especially mindful of the cleanliness of the yacht right now.
Tip #3: Use this time to prepare your boat for sale – Unfortunately, COVID-19 has most of the common cruising destinations like the Caribbean, Bahamas and Florida Keys closed, which limits the ability for owners to use their yachts. Use the down time to make sure that all of the yacht’s maintenance is up-to-date, and any important maintenance issues are cared for. Your broker will help you understand where to spend money to maintain the value of your yacht, and what projects to skip as they will not increase the value of the yacht to potential buyers.
Tip #4: Pricing is key – Be ahead of the curve. If you are putting your luxury yacht on the market now, it is imperative that you have a competitive price tag when she hits the market. Your broker can help you determine this price by comparison shopping other yachts on the market or that have recently sold. Understand the depreciation models, and that your broker is on your side when pricing. Don’t fall into the trap of “holding out for less.”
Tip #5: A photo is worth a thousand words – At this time, there is no truer statement. Buyers are spending more time online, and as a result, you want to make sure your yacht is represented with professional photos, videography, and 3-D walk throughs. Although nothing will replace viewing a luxury yacht in person, a strong showing through digital technology will help a buyer decide which yachts to put on their short list.
Having a broker that understands the nuances of the current luxury yacht market will be a huge asset to anyone looking into selling their yacht now. Please contact us with your questions, and let us know if we can assist you in the buying or selling of a yacht.