Jason travels the country full-time with his wife Abigail, and three children.
By Jason Epperson
I want to talk about the current market for both new and used RVs, which is about as tight as it’s ever been. Two major independent reports analyzing the RV market came out last week, and I believe they have some valuable information for folks who are looking for guidance on the right time to buy or sell an RV.
Black Book Report
The first report I want to look at comes from the vehicle market analysts over at Black Book, as published at RVBusiness.com.
Black Book’s August Market Commentary looks at the values of used RVs sold at auction. No surprise, again, RVs are selling at record values. BUT, the increases were less than they have been, suggesting that perhaps used RV values are reaching a plateau.
Right now, used motorhomes are selling at auction for an average of about $69,000, up from about $51,000 a year ago. Used towable RVs are selling at auction for an average of about $24,000, up from just over $18,000 a year ago.
Both motorized and towable RVs increased in value by about $500 in June, and the number of RVs sold at auction is decreasing each month. That’s likely due to dealers holding on to their trade-ins, Black Book says.
In normal times, most dealers hang on to a portion of their trade-ins, and they auction off those they don’t want. RVs that may not be in the greatest shape, or ones they have too many of. But with new inventory harder to come by, dealers aren’t letting go as easily as they did in the past.
In June, the average age of motorhomes sold at auction was eleven years (2010), and towables was six (2015).
J.D. Power Report
The second set of data comes from J.D. Power who recetnly released its annual mid-year report on the RV industry.
J.D. Power looks at average retail value, instead of auction prices. J.D. Power’s analysis concurs with Black Book, saying that standard hitch trailers are selling at a whopping 29.5 percent higher in the first half of 2021 compared to the same period of 2020.
Fifth wheel units are up 26.8, Class A motorhomes up 20.6 percent higher, and Class C units 23.6 percent higher. Smaller RVs, like pop-ups and truck campers, are coming even higher, both increasing more than 30 percent.
Automotive Industry Sales Stabalize
There’s some news for the automotive industry as well, where Black Book tracks numbers on a weekly basis.
Used wholesale and retail prices of cars and trucks started to stabilize in July (although, again, at a remarkably high plateau), but new car sales are still on a rollercoaster as the chip shortage is finally showing up in the new sales numbers.
Driven by an extreme shortage of rental returns and limited inventory of new vehicles, used vehicles experienced large weekly gains in the Spring, and as wholesale prices exceeded MSRP in some cases, the rate of increase started to slow down at the end of June.
After 19 weeks of continuous increases, retail prices seemed to have reached their peak and like wholesale prices, we saw a slight drop in retail listing prices. Currently, retail prices are around 25% above where they started the year.
Demand isn’t the only thing affecting RV availability and pricing. Supply chain issues and raw material costs have been affecting the market, and we’re seeing some changes there too. Lumber prices are crashing.
What does this all mean?
Well, summer is obviously peak travel season, which also means peak pricing for RVs in any normal year. Black Book Analyst Eric Lawrence says that “It’s likely that supply is finally catching up with demand, especially on the new side, where factories are producing record numbers of vehicles every month.”
Catching up with demand doesn’t mean prices will substantially drop, but it could mean we’re at the peak. J.D. Power doesn’t expect the supply and demand relationship to change much into the 4th quarter. So if we have hit a point where for every new RV buyer there is a new or used RV coming in, it’s possible that the market for RVs, both new and used has hit its peak.
Increase in Used RVs for Sale?
I’ve been following the number of used RVs available on RVtrader.com, which is the biggest RV-specific online marketplace, and there has been an increase in used RVs available over the past 3 weeks of about 4.5%, or 1600 units. I’d imagine that number will steadily increase over the fall into the winter.
That said, I expect the market to take a long time before we see inventories returning to normal on dealer lots and on the used market.
If you want to know more about my take on the possibility of a “glut” of used RVs check out my recent article on the subject, and if you’ve got any thoughts on the topic covered, leave a comment below and let’s talk.