Officials at several of the 10 makers of luxury aluminum-hulled houseboats clustered near Lake Cumberland said orders are down in the past year. Several have had layoffs and temporary shutdowns, and one closed.

Those houseboats can be floating palaces, with hot tubs, home-theater systems, premium appliances and hardwood floors. Prices vary by size and features, but it's not unusual for them to list new for $400,000 to $500,000, or more.

"The biggest problem I see is people are nervous. They don't want to spend that kind of money right now," said George Roberts, president of Sunstar Houseboats in Monticello, Ky.

At FunTime Luxury Houseboats in Russell Springs, owner Tim Abernathy said sales sank about 45 percent in the past 18 months.

"We've just really had to fight for every order we get," Abernathy said. "We still have some orders, but it's a lot slower."

Majestic Yachts Inc. of Columbia laid off all 26 employees at the end of August, said Bill Padgett, vice president for sales.

Since then, the three owners have been the only ones working at Majestic's plant. They're repairing a boat damaged in Hurricane Ike and building a floating pump station for a water system.

Houseboat buyers often place their orders in the late summer or fall so they can take delivery by the next boating season. By early January, Majestic usually would have had contracts to build seven or eight boats, Padgett said.

As of two weeks ago, it had none. "It's like somebody turned off the fountain," Padgett said.

The industry hadn't experienced a slowdown in years but is affected by the same economic issues as the rest of the country.

The uncertain economy, shrinking investment values and tight credit have made potential customers reluctant to buy a big-ticket luxury item, or unable to get a loan.

"You just don't see as many inquiries as you normally do," said Brent Fothergill, vice president of sales at Sharpe Houseboats in Somerset. "The market's hurt some of my people."

Shawn Heinen, president and co-owner of Thoroughbred Houseboats in Albany, said one customer made a deposit on a boat but couldn't get a loan to complete the purchase.

Thoroughbred's production dropped from the usual 24 boats a year to 18 in 2008. The plant probably will turn out 15 or 16 this year, Heinen said; that's not great, but it's enough to keep Thoroughbred afloat. "We've been fortunate to sell a boat here and there and keep going," he said.

Marie Tucker, who owns a houseboat-sales business, said the downturn appears to be one of the most significant that manufacturers and brokers have seen. "It's bad," said Tucker, who is attending more boat shows than usual this winter to look for sales.

American Waterways, a houseboat maker in Monticello, closed last year.

Starlite Luxury Houseboats closed in mid-November, but it has a new owner and is scheduled to resume production this month, said Tucker, who markets boats for the company.

With Starlite's revival, there would be 11 houseboat makers in five lake-area counties; most of the companies are in Wayne County.

The factories employ skilled workers such as carpenters and welders, and the jobs pay relatively well.

The downturn has local officials worried about job losses in the industry.

Wayne County Judge-Executive Greg Rankin said officials and business interests are working on drawing more people to the lake, which would not only increase spending at a variety of businesses, but also could result in more customers for the houseboat industry.

"It's a big part of our local economy," he said.

Some in the industry said they have seen increased inquiries in recent weeks, raising hopes for increased sales.

David Barrett, president of Stardust Cruisers in Monticello, said he received more inquiries about houseboats in the previous month than in the six months before that.

The company built about a dozen boats last year, its first full year under new ownership. That's about half the number Barrett would have liked, he said, but Stardust used the slowdown as an opportunity to retool and prepare for better days. The company also signed a deal to market houseboats in Europe.

"We're optimistic that things are going to turn around," Barrett said.

Tucker said she also received more calls about boats in January than she did in July.

Thom Dammrich, president of the National Marine Manufacturers Association, said the entire boat-building industry -- not just houseboats -- is down, but that sales could begin turning around this year.

"My sense is there is pent-up demand," but people are waiting to see how the economy fares, Dammrich said. "It'll start turning around when the economy starts turning around and consumer confidence starts improving."