State of the market for Hylas brokerage yachts by Richard Jordan:
I’m launching a brokerage focus soon so I’m kicking it off with a guest blog today from Richard Jordan, president of Jordan Yacht and Ship Company, a Fort Lauderdale brokerage that has specialized in the sale of pre-owned Hylas Yachts since 1992. I’ve admired Hylas boats for a long time and met Richard years ago when looking at a pre-owned 44. Today, I ogle the 46, a beautiful center cockpit model built to go the distance.
Richard has kindly agreed to share his views on the state of the market for Hylas yachts. He writes a blog called Waves at http://www.jordanyachts.com/blog.
New Hylas Market
Hylas yacht prices are stabilizing in the United States. Here is a look at what happened during the economic woes of the last two years, and how the downturn affected Hylas yachts both new and used.
Hylas was affected by the 2008 to 2010 economic downturn like all yacht manufacturers. Clients defaulted across the board on their range of 46 to 70 foot bluewater cruisers. For me, of note was a lingering new 46. The company offered this fully equipped 46 for sale for considerably less than sailaway. The purchaser benefited a Panda Fisher generator, Schaeffer in-boom furling, and a bow thruster among the extras. First, she was offered shrink wrapped at Queen Long's factory in Kaohsiung, Taiwan. A fellow broker, Tom Harney, in the office said, "Hey, we should all chip in together and buy her. That is quite a deal." But even with such benefits, there were few takers. Eventually, they shipped her to Riverbend, here in Fort Lauderdale, commissioned her, and sold her as the economy improved in mid 2010. I noted similar special prices on 49 and 70 footers. For those who were in the market, there were great opportunities.
What really happened to Hylas during the downturn was a shortening of their wait times. We saw an unprecedented drop in new orders along with the defaults. This fall off led to immediate access to the 46 and 49 versions which are the oldest designs and less popular than the 54 and 70 footers. While in the past prospects waited a couple years, at the bottom the wait time shrunk to six months. The 54 and 70 maintained wait times of a couple years. Queen Long stayed active throughout. The company was able to work through a backlog of orders without new deposits coming in. While meandering through Riverbend one day, I counted no less than four 46s, two 54s, and two 70s being commissioned, ready for delivery, or being serviced.
The new market turned around with the start of the boat show season in 2009. The Newport Show in September was much better than the previous year. At the Annapolis Show in October, activity really picked up, and we even had a call during the show for a late model 46. Hylas Yachts had their full line at Annapolis and made a couple of sales. From Annapolis until Miami, we consistently received calls for new and used Hylas yachts. Miami was quiet and disappointingly small because of a change in venue, but Hylas managed to bring in both a 46 and 70. While quiet, real people were there, not just lookers.
Brokerage Hylas Market
I thought more people would have put their yacht up for sale during the economic downturn. But owners were a patient group and decided not to seek the bottom in a bottomless market. They waited for the slow market to turn around before putting their Hylas up for sale. In 2009, pre-owned Hylas yachts were in low supply and mostly left over from 2008 before markets went south. We listed and sold two 46s in 2008. In contrast, we listed two 46s in 2009 but neither sold until early 2010. In 2010, we have seen many more brokerage Hylas yachts on the market and noted multiple sales of 54s and 46s. There are even two 70s on the brokerage market, a welcoming sight. These pre-owned 70s are the first of the Hylas flagship to come available.
Hylas 54 Raised Saloon
As a broker I have seen how closely yacht buying is tied to the stock market. Those who did not buy in 2008 saw the size of their yacht shrink along with their portfolio. One client had been looking at new 49s. But with the downturn, he had turned his interest to old 47s. "I just see how much more boat I can buy, and with the drop in the value of my house, I really have to re-evaluate my goals."
With stocks recovering in 2010, clients have heavier pockets again. They adjust their expectations in correlation to the value of their portfolios. Now, clients feel like they have extra money to spend because the stock market has risen and home prices have stabilized. But many are purchasing at less ambitious levels. My friend is still looking for a 47 and not ordering a new 49.
Although prices have stabilized and demand has normalized for both new and used Hylas yachts, this will be a long road for complete recovery. The new normal is here. If you are in the market, there are excellent prices and an increasing supply of brokerage Hylas yachts.