Foreclosure Rate on RV's

[The Captain]

I sit here in amazement at the rate of home foreclosures in our country and am wondering how many had or are having to give their RV back to the finance company as things start to get tighter and tighter with the economy. Has anyone seen or heard of any statistics on this? I haven't seen that many offered as bank turn in's.
Derek

[The Captain]

I sit here in amazement at the rate of home foreclosures in our country and am wondering how many had or are having to give their RV back to the finance company as things start to get tighter and tighter with the economy. Has anyone seen or heard of any statistics on this? I haven't seen that many offered as bank turn in's.
Derek

[Tom N]

CHICAGO (Reuters) - April 30, 2008 - Rising gasoline prices, falling home values and tightening consumer credit are driving U.S. recreational vehicle sales off the road as the business enters the normally busy spring and summer selling season.

The industry is scrambling to adjust by laying off workers, selling real-estate assets to raise money and bringing back cheaper, more fuel-efficient vehicles whose popularity peaked during the last oil crisis in the 1970s.

Analysts are skeptical the turnaround will be quick. They say it's going to take time for consumer confidence to rebound and predict 2008 will wind up being another down year for retail sales -- the fourth in a row.

"This is not something that's going to cure itself quickly," said Bob Simonson, an analyst at William Blair & Co. "These are very big-ticket, discretionary purchases. ... What pulls it out is a bottoming in the economy, a topping out in unemployment, which is at least six to 12 months away."

Sales have been hammered as the U.S. economic downturn eroded consumer confidence. Year to date, motorhome shipments are down 24 percent and towables are down 14 percent.

"Dealers are slashing orders amid deteriorating retail sales and a fairly negative outlook for 2008," says Craig Kennison, an industry analyst at Robert W. Baird & Co, who says he expects continued deterioration.

Not so long ago, the motorhome industry was a symbol of America's outsized appetite for pricey toys purchased with money pulled out of fast-appreciating homes.

During the height of the U.S. property bubble, companies like Winnebago Industries (WGO.N: Quote, Profile, Research), the No. 1 motorhome maker, couldn't make enough so-called Class A motorhomes, bus-like vehicles that often cost more than $100,000 and consumed a gallon of gas every 6 miles.
Many buyers financed their purchases using home equity. Others turned to a U.S. lending industry that would finance anyone -- as long as it could turn around, bundle its loans and sell them off to investors.

But the collapse of the credit markets and the related slump in the U.S. housing market have changed all that. Call it the "wealth effect" slammed into reverse gear, and it has hit the RV industry particularly hard.

Soaring gasoline prices -- which hit a record of nearly $3.61 per gallon on Tuesday, according to travel club AAA -- -- are now giving the industry yet another headache by giving consumers another reason to stay out of RV showrooms.

RV makers are trying to shift gears. Winnebago has resumed building "Class B" motor homes -- essentially low-end van conversions that get double the mileage of the Class A vehicles -- to try to drive traffic into empty dealer showrooms.

Five years ago, the company exited the business altogether in order to free up assembly lines for its Class A buses.

Winnebago chief executive Bruce Hertzke said last month the move back into van conversions marked a permanent change in the RV market. He compared the current unpopularity of bus-like motorhomes to falling demand for big sport utility vehicles.

Analyst Simonson said, however, that once the downturn ends, the pent-up demand for RVs will be "much more vigorous" than anyone is willing to predict.

"Just as the length and depth of this downturn has been much greater than investors and managements anticipated, I think the rebound will be the reverse of that," he said.

SOURCE: Reuters

[RedneckExpress]

Shy of fuel prices falling back to around $1 a gallon, I don't think they're going to see "Pent up demand" for anything. Especially with as inflated as RV prices are right now.

You might see growth in less expensive, used units, where the depreciation costs have already been soaked by someone else, but this isn't going to be good times for the industry by any extent of the imagination.

[LVJ58]

Lets face it, the high pump prices are one of the major factors causing the downturn in our economy. The more dollars folks have to pay for gas leaves them with fewer dollars they could be spending on other items.

[BryanL]

check the hyperbole in the media quote:

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Rising ... prices, falling ... values and tightening .. credit are driving ... sales off the road ... scrambling ... crisis ... skeptical ... going to take time ... another down year for retail sales -- the fourth in a row. ... not something that's going to cure itself quickly ... bottoming in the economy, a topping out in unemployment ... hammered ... downturn eroded consumer confidence. ... shipments are down ...slashing orders ... deteriorating ... negative ... continued deterioration ... outsized appetite ... pricey toys ... fast-appreciating ... </div></BLOCKQUOTE>
and on

when you have 'reporting' like this, it is not surprising that someone will find it amazing how a modest downturn looks like total disaster.

On any of these things, you have to look very carefully for the referent. There likely aren't many stories about RV loan defaults because it probably hasn't changed to any significant degree or doesn't hit too many or doesn't make much of a difference. Sales in some segments may be off a bit but you'll note that a lot of the reporting deals with degree of change and not the total volume.

From the reporting about the sub prime mess it is often hard to tell that it isn't about home foreclosures. You'd think everyone is loosing their homes when the reality is that it is only those who didn't have sound foundation for a loan or tried to use their home as a financial lever who are having unusual problems.

Even with food and fuel price increases the rate of inflation is not into dangerous territory. And of course, look at all the attempts to claim recession and rationalize the fact that the economy as a whole isn't receding.

This isn't even a 'half empty' versus 'half full' thing yet as the glass is really quite full. The illness is in those trying to drain the glass for some reason so they can rationalize their desire for 'woe is everyone else' that seems so popular these days.

I mean, like, get a grip already!

[UFO Pilot]

BryanL

RIGHT ON!!

[Whaler]

Thank you BryanL!

[historyljc]

BryanL

Amen!!!

[Georgia Flash]

Yes sir, yes sir! $4.16 a gallon only slows down those that want it to slow them down.??

[becks]

I'm with BryanL also. I am sick to death of hearing this doom and gloom evey time I turn around. Enough already. I went into these times in good shape and I will come out of them in good shape, as will most others. Lets just all keep doing what we enjoy.

[Tom N]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Georgia Flash:
Yes sir, yes sir! $4.16 a gallon only slows down those that want it to slow them down.?? </div></BLOCKQUOTE>

It also slows down those that can't afford $4.16 a gallon. And some of those not only slow down they are coming to a complete stop and have their RV for sale.

Western RV and Alfa have come to a complete stop. I'm certain those employees will not agree with you. Read some of 1st quarter RV manufacturer's financial reports that have just been released.

I'll be here 6 months from now. Check back to this thread and we'll talk about the direction RVing has take in those 6 months.

On edit I'll add, Travel Supreme also went belly up in 2008.

-Tom

[MtManLee]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by becks:
I'm with BryanL also. I am sick to death of hearing this doom and gloom evey time I turn around. Enough already. I went into these times in good shape and I will come out of them in good shape, as will most others. Lets just all keep doing what we enjoy. </div></BLOCKQUOTE>
I second that Becks you said it well.

[Aridon]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Tom N:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Georgia Flash:
Yes sir, yes sir! $4.16 a gallon only slows down those that want it to slow them down.?? </div></BLOCKQUOTE>

It also slows down those that can't afford $4.16 a gallon. And some of those not only slow down they are coming to a complete stop and have their RV for sale.

Western RV and Alfa have come to a complete stop. I'm certain those employees will not agree with you. Read some of 1st quarter RV manufacturer's financial reports that have just been released.

I'll be here 6 months from now. Check back to this thread and we'll talk about the direction RVing has take in those 6 months.

-Tom </div></BLOCKQUOTE>



Sorry but if a $1 increase in fuel stops people from Rving then they didn't belong in the hobby to begin with. Hate to be blunt but thats how it is.

I'm sick to death of the doom and gloom over gas. This is NOT a gas issue.

Let me say it again for those in the cheap seats, ITS NOT A GAS ISSUE. If gasoline or diesel costs are an issue then this is not the hobby for you. Paying 100k for a rig and in many cases much more, you shouldn't be worried about gas going up like it has. Especially when adjusted for inflation its still about as cheap as it was in the late 70's and we make a lot more money now a days.


The issue is most of this country went hog wild on a spending spree of mostly home equity and general credit use expecting the good times to keep rolling totally forgetting that they were only a paycheck away from missing payments.

The result of that was the home markets booming and the equity resulting from it getting spent like it was going out of style.

New Cars
New furniture
New RVs
Boats
ATVs
Jet SKI's

etc...


So all the luxury manufacturers were rolling in the dough. Naturally that couldn't continue forever. Now that things are reverting back to a more normal cycle people realize they still have to pay these bills, jobs aren't paying as much, contractors are not as busy, neither are Realtors, mortgage brokers etc... It all trickles down.

Gas goes up a little bit and even though its probably less than $100 a month for most everyone people are up in arms, suddenly can't afford things and in general do nothing but complain about how the world is coming to an end.

Let me tell you something. Plenty of people RV in Europe with $8-10 per gallon petrol. Its not going to end here just because fuel is up around $4 nor will it end at $8.

Bottom line, if you are in this hobby and can't afford it then get out of it. No reason people that pay close to 100k or in many cases much more should be complaining about fuel cost driving a rig that gets 7 MPG and depreciates at 5x the cost of your fuel bill.

If you aren't happy stop doing it. If you can't afford it, stop doing it.


&lt;Not directed at the quoted poster but in general&gt;