Buyers market?

[robmharper]

Hello,

First post here so I hope I didn't already make a mistake by misplacing the category.

We have owned a double slide truck camper for about 7 years now. We are heading down the path of a 40' DP MH. Our price range is $90K. My question for the group is do you feel the timing is good or bad for buying a DP?

I live in California and we are probably days away from interstate travel shutdowns. Already in the Bay Area, people are getting cited with misdemeanors for traveling the highways. We are ordered to shelter-in-place. My thought is that this may just ruin the RV market. We don't know how long this Covid-19 situation will last.

Since a good majority of the current sellers of DP's are older retired folks, I hate to think that we may be soon taking advantage of some really good deals out there, while also taking advantage of unfortunate people.

On the other end, maybe this is the worst time ever to be buying a MH given the park closures and travel restrictions. But living through the 2008 crisis, I remember losing 50% of the value of my home. This isn't going to be easy either way.

Good or bad time to buy a DP MH? Should I wait for what may be better deals down the road or hold off anwait to see if we can even use the darned thing?

[Gig_em]

robmharper wrote:

Lantley wrote:
In terms of recovery and markets we are in uncharted territory.
This is not like 2007 when business failure caused the issues.
Are economy was deliberately shut down for health reasons.
There will be payment forgiveness and lots of amnesty.

This is a good point, but the unemployment rate is theorized at an actual 14%, expected to reach 19% in the US. The 4.4% is the worse 2 month drop since 1975. 177,000 furloughs that will probably turn into a 3 month or longer break from work. While there may be loan forgiveness to some extent I suspect people will focus on repaying their mortgage as a primary goal and let the RV's go to repossession. The smart people with temporary layoffs will offload themselves if they can, trying to salvage their credit score. This will be at firesale levels, I predict. The rest will go to the auctions but that will take time to start seeing.

We made a reasonable (I think, given the situation) offer, only 13% lower than the advertised price and the RV dealership who was offering the unit on consignment wouldn't even push the offer to the owner. That, to me is criminal. I would bet that owner would be glad to accept a 13% discount to have cash in hand. We are paying cash. Now we are playing the waiting game and I suspect we will prevail, eventually.

I think this is right. The economy when we’re through this won’t be the economy before it started. Unemployment will be higher and while loans may be forgiven for a period of time, they wont be forgiven forever. People will have to make choices, and getting back to the OP’s post it could be a great time to buy an RV or anything else.

[robmharper]

way2roll wrote:

robmharper wrote:

Lantley wrote:
In terms of recovery and markets we are in uncharted territory.
This is not like 2007 when business failure caused the issues.
Are economy was deliberately shut down for health reasons.
There will be payment forgiveness and lots of amnesty.

This is a good point, but the unemployment rate is theorized at an actual 14%, expected to reach 19% in the US. The 4.4% is the worse 2 month drop since 1975. 177,000 furloughs that will probably turn into a 3 month or longer break from work. While there may be loan forgiveness to some extent I suspect people will focus on repaying their mortgage as a primary goal and let the RV's go to repossession. The smart people with temporary layoffs will offload themselves if they can, trying to salvage their credit score. This will be at firesale levels, I predict. The rest will go to the auctions but that will take time to start seeing.

We made a reasonable (I think, given the situation) offer, only 13% lower than the advertised price and the RV dealership who was offering the unit on consignment wouldn't even push the offer to the owner. That, to me is criminal. I would bet that owner would be glad to accept a 13% discount to have cash in hand. We are paying cash. Now we are playing the waiting game and I suspect we will prevail, eventually.

While the consignment dealer is in it for profit I agree that any offer should be presented. Keep in mind though that the actual owner is also paying the consignment dealer 10% if not more in addition to your reduced offer.

That is not lost on me. I am searching all the local ads to see if the owner ever presented it for sale-by-owner. If I can cut out the middle man, everybody is happy (except for the dealer).

[way2roll]

robmharper wrote:

Lantley wrote:
In terms of recovery and markets we are in uncharted territory.
This is not like 2007 when business failure caused the issues.
Are economy was deliberately shut down for health reasons.
There will be payment forgiveness and lots of amnesty.

This is a good point, but the unemployment rate is theorized at an actual 14%, expected to reach 19% in the US. The 4.4% is the worse 2 month drop since 1975. 177,000 furloughs that will probably turn into a 3 month or longer break from work. While there may be loan forgiveness to some extent I suspect people will focus on repaying their mortgage as a primary goal and let the RV's go to repossession. The smart people with temporary layoffs will offload themselves if they can, trying to salvage their credit score. This will be at firesale levels, I predict. The rest will go to the auctions but that will take time to start seeing.

We made a reasonable (I think, given the situation) offer, only 13% lower than the advertised price and the RV dealership who was offering the unit on consignment wouldn't even push the offer to the owner. That, to me is criminal. I would bet that owner would be glad to accept a 13% discount to have cash in hand. We are paying cash. Now we are playing the waiting game and I suspect we will prevail, eventually.

While the consignment dealer is in it for profit I agree that any offer should be presented. Keep in mind though that the actual owner is also paying the consignment dealer 10% if not more in addition to your reduced offer.

[robmharper]

Lantley wrote:
In terms of recovery and markets we are in uncharted territory.
This is not like 2007 when business failure caused the issues.
Are economy was deliberately shut down for health reasons.
There will be payment forgiveness and lots of amnesty.

This is a good point, but the unemployment rate is theorized at an actual 14%, expected to reach 19% in the US. The 4.4% is the worse 2 month drop since 1975. 177,000 furloughs that will probably turn into a 3 month or longer break from work. While there may be loan forgiveness to some extent I suspect people will focus on repaying their mortgage as a primary goal and let the RV's go to repossession. The smart people with temporary layoffs will offload themselves if they can, trying to salvage their credit score. This will be at firesale levels, I predict. The rest will go to the auctions but that will take time to start seeing.

We made a reasonable (I think, given the situation) offer, only 13% lower than the advertised price and the RV dealership who was offering the unit on consignment wouldn't even push the offer to the owner. That, to me is criminal. I would bet that owner would be glad to accept a 13% discount to have cash in hand. We are paying cash. Now we are playing the waiting game and I suspect we will prevail, eventually.

[ppine]

If you think RVs are cheap now, wait a couple of months.

[Lantley]

In terms of recovery and markets we are in uncharted territory.
This is not like 2007 when business failure caused the issues.
Are economy was deliberately shut down for health reasons.
There will be payment forgiveness and lots of amnesty.

[dodge_guy]

Terryallan wrote:
Think about this. It could soon be a seller's market. As many of the Rv manufacturers have shut down, and there could be a shortage of RVs this spring, and summer.

on a negative note...…..once the manufacturers start up again they are going to blow so many units out the door the quality is going to be even lower than it already is. I wouldn`t buy one built right after this is all over!

[rgatijnet1]

Naturally no one likes to think about it, but there will probably be some units available from estate sales after this virus has run it's course. Most remaining family members will probably just want to dump the RV rather than try to store it, clean it, and sell it on their own.

[Gig_em]

I think the question how long does this go on is right. We were starting to think about replacing our unit, but will probably look used and are holding off to see what prices will be later this yr.

According to Camping World’s 10k, they sold over 100,000 units (pop-ups to DP; approx 2/3rds new - 1/3rd used) last yr (3500 Class A Gas, 500 Class A Diesel) and financed over 74% of the units. I’m guessing they finance a higher percentage of Class A’s and some number of the other 26% are financed elsewhere. I don’t know what their market share is, but that’s a lot of financed units.

Other interesting unrelated facts:
In 2019 they had $3.2B in sales with income of $475MM from these units. They made $400MM on financing.

They have 12,000 full time and part time employees.

[valhalla360]

A big question is how long this goes on:
- If things open up in 3-4 weeks, there might be some deals but don't expect huge numbers of dirt cheap sales. Most people can wait out a month or two or at least they will try.
- If the economy is still shut down come July, expect super cheap deals aplenty. A large percentage of rigs have loans and those people likely have other bills that come before keeping a toy.

The other question is do you have cash outside of the market? If you have to liquidate investments that are 30% down, you really haven't made that great of a deal.

Dealers will likely react a bit different than private sales.
- A retired couple might be able to make it on SS alone if they liquidate leveraged assets, so even if they take a loss or even just get enough to clear the loan, it may be a good thing for them as it may avoid losing the house.
- Taking a big loss on a sale only helps a business with monthly cash flow but unless there is a light at the end of the tunnel, doesn't help keep the business alive long term.

Unless YOU are somehow forcing or tricking them into selling, there is no moral dilemma in getting a good deal. If there are better offers, they are free to take them. If not, it's better to have an offer than not have an offer.

[Bill_Satellite]

Good luck!

[robmharper]

rgatijnet1 wrote:
Have you thought about doing some research and possibly buying an RV out of your area in another State? Not all areas are going to be, or are already impacted the same, so perhaps someone know of some deals outside of California.

The coach I'm looking at is in AZ. I am trying to keep my searches to the dryer states or a coach that has been proven to be stored inside. I made an offer today given consideration to what has been said here. We shall see.

[robmharper]

Walaby wrote:
I thought you were talking about buying a RV from a private owner. Dealer is certainly a different situation. Many dealers are just flat stubborn, and it's way too early in my opinion to expect a fire sale from a dealer.

Mike

It's both, really. It's a dealer who also does consignment. I make an offer and they go to the owner for approval.

[Walaby]

I thought you were talking about buying a RV from a private owner. Dealer is certainly a different situation. Many dealers are just flat stubborn, and it's way too early in my opinion to expect a fire sale from a dealer.

Mike