RV Prices Peaked?

DavidEM · 10-09-2021, 02:31 PM

About a year ago when I was searching for a newish Axis 24.1 I set up a search on RVTrader.com for a 2018 Axis 24.1 and it reports by email every new listing for that coach.

For the past year, used listing prices for the Axis 24.1 varied from a typical $80,000 to an extraordinary $110,000 that I am sure was never sold anywhere near that price. But $80,000 seemed to be rule.

Today I got an email showing a listing for a 2018 Axis 24.1 at $65,000 from a private seller in Georgia. Maybe he is crazy and listed way below market pricing, or maybe the market has dropped recently back to prices before the panedemic demand drove prices up dramatically.

Any thoughts? Are we seeing the end of this boom period?

David

atreis · 10-09-2021, 03:09 PM

That unit could also have damage of some sort that would warrant the low price, and we're in the worst season for selling an RV. Generally not what people want to do come fall. There's still a shortage of new and used units on the market and large backlogs, so I really doubt it reflects a true trend downward. (You'll need more than one data point.)

**EA37TS** · 10-09-2021, 05:07 PM

Could also be someone looking for a bidding war to start like what is happening with houses.

Chance · 10-09-2021, 05:12 PM

Three consecutive months of retail sales decline looks like start of a trend to me. At least it looks like end of peak. Prices should follow demand.

https://rvbusiness.com/ssi-august-20...-33-from-2020/

Homer3 · 10-09-2021, 05:13 PM

Could be that the seller has fallen on hard times due to illness, job loss, etc. and is just trying to get rid of it. That's how we bought our first motorhome, it was a divorce situation and the asking price was more than $10,000 less than blue book.

DavidEM · 10-09-2021, 09:38 PM

I am hoping that the boom of the past year in RVs is over. I also am hoping that in another year public campgrounds will be back to normal. I am tired of having to make reservations three months in advance and then having to cancel when the time comes and the weather is bad. At least half of my state park camping this year has been hampered by bad weather once the reservation came around.

Bring back the good old days when even desirable lakefront sites were available to walk-ins. Now some state won't allow walk-ins and many like Vermont only accept two day reservations. As a result there are many nice sites that sit empty for a day- no way to use them.

David

Homer3 · 10-09-2021, 09:56 PM

Here in California you can't get reservations for 2022 at central coast parks. It's gotten very difficult even for those who are retired and flexible to get mid week reservations for off season trips

**EA37TS** · 10-10-2021, 12:44 AM

Quote:

Originally Posted by Chance

Three consecutive months of retail sales decline looks like start of a trend to me. At least it looks like end of peak. Prices should follow demand.

https://rvbusiness.com/ssi-august-20...-33-from-2020/

Three consecutive months of year to year decline is not the same as three consecutive months of sales decline. In other words the month’s sales this year were lower than the same month’s sales last year.

The article also says overall sales this year are higher than last year.

Chance · 10-10-2021, 03:18 AM

Quote:

Originally Posted by EA37TS

Three consecutive months of year to year decline is not the same as three consecutive months of sales decline. In other words the month’s sales this year were lower than the same month’s sales last year.

The article also says overall sales this year are higher than last year.

Before the three months of June, July, and August, there were 12 straight months of records.

https://rvbusiness.com/ssi-65303-ret...-record-month/

While total year-to-date may still be ahead because of excellent sales early in calendar year, it seems to me that the “peak” is over, or very close to it. To know for certain we would need a lot more data that wasn’t shared.

sportcoupe · 10-10-2021, 11:08 AM

There is more to used rv pricing then just the year and model. That low price 2018 is low for a reason, mileage, condition, damage, etc....

Judge · 10-10-2021, 11:39 AM

I also think the peak is over and we are going to see decline in new and used prices over the next 12 months because of several factors.... but most of it related to supply and demand.

- The manufacturing backlog will begin easing and while some new units are spoken for already, inventory levels will increase and competition between manufacturers and dealers will return. Some RV dealers are even increasing capacity because they think the demand levels are here to stay..... but I wouldn't be too sure of that prediction.

- A chunk of the masses who jumped into RV'ing for the first time over the last 12 months will realize it just wasn't for them and some lightly used rigs will hit the used market.

- Inflation is a reality and will be here for a while and that will impact many aspects of day-to-day life and curb RV'ing. Last year during COVID I could fill up on diesel for $100. I just got back from a 7+ week / 7200 mile trip where it cost $180 - $200 to fill up.... and in many places out west diesel was the same or less than regular gas. Campgrounds we stayed at last year also increased their price 25% this year. Winter heating bills are going to skyrocket this year and all of you have seen grocery prices.

- Some people will see tha shiny new rig in the driveway getting dull and after only being used a couple times a year they suddenly realize the loan they took out to buy it was a big mistake.

- Some people will be shocked with the quality..... or lack thereof.... as they expect an RV to be as reliable as their family car and the endless repairs and time lost at the dealer will make it so frsutrating they will dump their rigs.

- Some people will become frustrated by campgrounds being booked solid for months in advance and popular attractions being so crowded that it is not as much fun as they thought it would be.

Eventually these factors and others will cause supply to outpace demand and when that happens, price goes down to purge the inventory glut.

sportcoupe · 10-10-2021, 01:43 PM

In Thor 3Q21 earnings report, Thor Industries alone had a $14 Billion backlog of orders. A 32% increase since 1Q21 and 550% over 2020. Every RV that leaves Thor is completely paid for. Almost all are going right to new owners, not the dealer lot.

Place an order now and you won't see it till next summer 2022 at best.

We know Thor isn't the only manufacture of RV's.

New RV prices will not drop, not this year or next year. I predict they will never drop, they may level off and become the new normal.

Uses RV market prices will always be as high as sales will bare. Advertise at $110k, sell to the first $99k offer.

No one wants to take a loss but some see a small loss as an easy out of a large loan, so be it.

taylorbob1 · 10-10-2021, 02:37 PM

Ask Jerry….

https://www.thorforums.com/forums/f3...29m-27926.html

ducksface · 10-10-2021, 03:20 PM

Sometimes
'Gone'
Has more value than money.

Now that mortgages and rent must be paid again
There's going to be a lot of
'Gone'.

Repo season will be lllooonnnnggg one this time around.

**EA37TS** · 10-10-2021, 07:14 PM

Prices have not peaked because you have not yet seen the full effects of the inflation coming our way. Sales may drop but not prices.

Judge · 10-10-2021, 07:26 PM

But when sales fall, incentory increases beyond sales forecasts…. Then prices are reduced to clear inventory.

You may not see prices where they were before COVID but they will drop from the COVID peaks.

Chance · 10-10-2021, 07:41 PM

Dave makes good point about inflation. However, we can correct for that easily. COVID driven price increases were well beyond that though.

Some data suggest the correction is already under way, although we have to be careful looking at just a few months because there are always variations, plus seasonality. Looking at data below it’s not unusual to have a little dip going into winter when demand is lower.

This is only one data point which a trend does not support on its own.

https://rvbusiness.com/black-book-wh...f-this-autumn/

**EA37TS** · 10-10-2021, 08:34 PM

Quote:

Originally Posted by Judge

But when sales fall, incentory increases beyond sales forecasts…. Then prices are reduced to clear inventory.

You may not see prices where they were before COVID but they will drop from the COVID peaks.

I See it differently.

Dealers will not reduce prices to clear inventory. Dealers will cancel orders not already purchased which will reduce supply to coincide with demand and thereby reduce Thor’s backlog.

Judge · 10-11-2021, 12:20 AM

Quote:

Originally Posted by EA37TS

I See it differently.

Dealers will not reduce prices to clear inventory. Dealers will cancel orders not already purchased which will reduce supply to coincide with demand and thereby reduce Thor’s backlog.

We shall see…..

I have seen this cycle play out in the snowmobile industry multiple times. Granted a $15K - $20K vehicle but when winters are bad a couple years in a row, inventory builds up and dealers have to cut prices (with some help from the manufacturers).

In the snowmobile (and a few other recreational industries), manufactures also require a minimum annual order of inventory to carry their product line. I can’t speak to the agreements between RV manufacturers and dealers but a snowmobike dealer, SXS dealer, etc. can’t just cancel orders for inventory they have ordered. They have to order a minimum value if units each year and the amount increases every year.

The same demand and pricing surge has been occurring in the snowmobile, boat and other similar industries as well. Prices will go down when inventory stops moving. You can take that to the bank.

dkoldman · 10-11-2021, 02:17 AM

Quote:

Originally Posted by Judge

We shall see…..

I have seen this cycle play out in the snowmobile industry multiple times. Granted a $15K - $20K vehicle but when winters are bad a couple years in a row, inventory builds up and dealers have to cut prices (with some help from the manufacturers).

In the snowmobile (and a few other recreational industries), manufactures also require a minimum annual order of inventory to carry their product line. I can’t speak to the agreements between RV manufacturers and dealers but a snowmobike dealer, SXS dealer, etc. can’t just cancel orders for inventory they have ordered. They have to order a minimum value if units each year and the amount increases every year.

The same demand and pricing surge has been occurring in the snowmobile, boat and other similar industries as well. Prices will go down when inventory stops moving. You can take that to the bank.

Software license sales can be the same way. Dealers are bound to sell "X" amount of licenses per year, and when demand drops the dealers are holding the excess inventory cost and be quite costly if they they don't turn the inventory before year end reporting. To remedy they have to cut the prices. A good Software company will offer rebates to the dealer to help out, because they need they want those licenses sold, because it impact other financials flows such as maintenance contracts.

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