I’m calling the peak

You might have called it right. Today, I see two Cessna 150s (mid 60s models), both in annual, both under TBO (albeit high time) engines, one with an asking price of $24,000 and the other $26,000, and that's plastic (Canadian) dollars - so in USD that's like $18,000 and $20,000. Also saw a Cessna 210 (early 60s model) with a mid time engine and relatively low TT for $88,000 (about $68,000 USD). That's more in line with what these planes are actually worth.
 
Just for fun, I’m calling the peak of plane pricing as of today. Interest rates going up, fuel skyrocketing, plane prices themselves having spiked, war. I’m calling it. I’ve noticed a number of peak-of-the-market planes have been sitting on the market and lowering their prices.

What do you think?
Let's hope, I've been waiting for 2 yrs to buy a new/used boat.

So many people borrowed and extended their way into too many toys at outrageous prices.
 
Just for fun, I’m calling the peak of plane pricing as of today. Interest rates going up, fuel skyrocketing, plane prices themselves having spiked, war. I’m calling it. I’ve noticed a number of peak-of-the-market planes have been sitting on the market and lowering their prices.

What do you think?
Let's hope, I've been waiting for 2 yrs to buy a new/used boat.

So many people borrowed and extended their way into too many toys at outrageous prices.
We should never have done the first ones.
AMEN

We stopped doing Capitalism long ago.
 
So what’s the latest - are we peaking? I’m seeing more and more planes and some (relatively speaking) more reasonable prices. Anyone have new thoughts on this?
 
Agree. There are flyable 182’s now - albeit with interiors looking like an abandoned homeless camp a bear wouldn’t hibernate in - for around $125k. They are slowly moving.
 
OK, I have to imagine the stock market pain (with the promise of more), the crypto sell off, the borrow rates spiking, and AVGAS through the ******** roof is finally causing some buyer pause in the market.

It seems TAP is hovering around 1770-1800 planes (SEP) every day now, which is WAY above where I've seen it the last 2 years, and the brokers that I routinely check also seem to have more planes than they've had in a long time (with a few exceptions).

All that said... Is there potentially finally a break, or am I seeing what I want to see? Any recent buyers still seeing a hot market with planes flying off the shelves as soon as they're listed?

I have to think we're not far from shifting to a buyers market... But I don't want to succumb to wishful thinking :)
 
Planes that were bought at the peak probably will not be sold at a loss. They’ll rot on the tarmac until hauled away for scrap in 20 years. It’s the inventory of planes that were bought before the high prices that will see selling prices “more reasonable”.
 
Yeah...
I don't think people who just bought are going to want to turn around and crystalize their loss, even if that would be the financially prudent move.
The crowd I'm hoping to see are the people who overextended themselves on homes/planes and now need a bit of liquidity. The fact that credit card balances are up 20% does indicate some strain is occurring now. People who need liquidity tend to be incentivized to unload their assets at more... "reasonable" prices :D (though I hope no one on the POA forum is in that category!)
I know it may sound sadistic but I bought a house, a plane and a boat all damn near the peak (and just put the boat on the market this week), so I feel I'm entitled to wish for such a thing to occur as it hurts me as much as anyone else! :)
 
Talked to a stock broker a few months ago. He observed that the speed of market reaction is determined by liquidity. Stocks are highly liquid, so they react nearly instantly to changes in market conditions. Real estate and other property is less liquid, and can take months to years to respond to events.

Airplanes are like that. You bought a plane near the peak. Then the cheap money dries up, avgas doubles in cost, and buyers vanish. You do not want to sell at a loss, so you resolve to hang onto it. Eventually debt starts to pile up or some life event happens, and you decide you must sell at a loss. Multiply that individual behavior across the population of owners, and you gradually get a change in balance between supply and demand that drives prices downward.

Point being, the impact of high oil prices and interest rates now will probably take a year or two to be fully felt in markets like real estate, aircraft, and boats.
 
Yes - longer to affect planes and houses. But the magnitude of the financial mess still speeds things up. And this is a mess of great magnitude.
 
yep @Ed Haywood

I think the supply side (existing a/c owners) will not, on average, have an urgent need to sell and for all the reasons you mention. A lot of that stuff takes time to work its way into someone's finances. It helps that most a/c owners are not exactly standing on the precipice of financial ruin. At least from my observation people in aviation are *usually* more financially able, and financially responsible individuals.

Though I think that demand side drying up could be a powerful precipitating factor in pushing down prices. When buyers investment accounts are worth 20-30% less than they were a few months ago, that has a way of steering people out of the market. Esp with peak prices and AvGas at levels that many didn't think were possible even a few months ago. The absence of new money in the market tends to worry sellers that were even contemplating get out of ownership. That can quickly become a catalyst for an unwind since no one wants to be left without a chair when the music stops.

Anywho, not expecting it to be an overnight thing, but I'm certainly interested in trying to find the inflection point and then measuring the rate of decline :) (but that's just the nerdy trader, and the current a/c shopper in me)

Also a recent report from VREF on the market: https://www.einnews.com/pr_news/573...ircraft-values-climb-despite-economic-jitters
 
Last edited:
The VREF article makes sense to me. Folks expecting used airplane prices to return to prices of three years ago will likely be disappointed.
 
The VREF article makes sense to me. Folks expecting used airplane prices to return to prices of three years ago will likely be disappointed.


Depends on just how bad this economy gets. Right now, to me, it looks like it could get quite ugly. Interest rates up .75% yesterday, fuel just keeps on going. Inflation is sucking money out of peoples pockets faster than any time since the stupid peanut farmer. I paid $8/gallon for fuel the other day, how many new airplane owners factored an extra 60% in fuel costs?
 
Just a few months ago I was offered a three year old used plane for the price of a new one, and I was told it was a great bargain since otherwise I would have to wait two to three years to get my hands on one fresh from the factory. I hope this kind of exaggeration will come to an end, but so far the market seems frozen. I don't expect many aircraft owners to run into financial troubles forcing them to sell, but maybe some of them will start flying less because of costs, and will eventually get rid of a plane they don't use much. And some flippers may find that their business disappeared due to a suddenly a reduced demand...

Edit: spelling correction...
 
Depends on just how bad this economy gets. Right now, to me, it looks like it could get quite ugly. Interest rates up .75% yesterday, fuel just keeps on going. Inflation is sucking money out of peoples pockets faster than any time since the stupid peanut farmer. I paid $8/gallon for fuel the other day, how many new airplane owners factored an extra 60% in fuel costs?
I am thinking that it will make the cheaper planes like my Arrow more desirable. Thinking, as money becomes tighter, people still want to fly but are looking for more economical ways to do it. The guy thinks twice about the Bonanza may look at an Arrow with more appreciation of it's economy. At the last recession, it was the high end houses that were a hard sell. Under $150k sold relatively quickly.
 
I see lots more for sale but also seem to have noticed the # of quality low to mid range singles seems to be declining. Like everyone who has procrastinated selling their hardly used not updated in 20 years needs work single is rushing to market.

or maybe I’ve just raised my standards
 
a little anecdotal evidence…
Just flew back from KAZO this morning and the folks at Duncan FBO said they’ve seen the recreational piston traffic fall off a cliff with gas prices. They’d usually have 12-15 planes on the ramp, but have only 2 since Friday (I’m 1 of ‘em). And that’s even with a perfect weather, long weekend. Yesterday they only got 1 piston plane stopping in the whole day.

Might just be them specifically or… perhaps affordability is hitting peoples desire to fly…
 
Interesting @Tom Wells

in my world we lend $ to many retailers (as well
As other businesses) and inventory at the mid range and below has been climbing (after 2-years of not keeping anything in stock).

Could be a cold wet spring (many point to that) or it could be the spending has run it's course with rates climbing and gas and other required home goods (groceries) climbing. Bigger shift from beef to chicken and pork seems to be in play too (I think USDA numbers come out in July for 2Q?).
 
What's the TAP analysis on the SR-22?

Is it the new bellwether SEP due to acquisition cost?

Were Bonanzas the bellwether plane before the SR-22?
 
Market for many things seems to be whiplashing. More volatile and reactive than it used to be. Gotta wonder if social media is having an impact on buyer psychology. That definitely is the case with housing.
This makes me think of what Elon Musk was doing with Dogecoin...and now he's being sued for 250 billion because of it.
 
As long as the inflation rate(8%) is above the fed rate(1.75) all bets off. Now when the the fed rate starts decreasing, and inflation is below the fed rate, then it’s time to buy your used aircraft. Ie 1980’s and 2007
 
TLDR: should I invest $30k more than planned, total $50k, to buy a 1/4 share of a 1978 180HP tiger with new all glass panel and hangar at the airport closest to me (vs sitting on the cash in case I get laid off)?

Stream of Consciousness
This thread has had folks on both sides of the argument. I'm on the side of prices have to come down and I think we'll see an economic correction (broadly - not just GA, but luxury goods like GA, boats, RVs and other higher price tag toys will feel it).

BUT - I sort of have a potential dream opportunity. Founder of this thread, AA5B man, may relate.

I've always had a strange love affair with Mooneys and Tigers. The first small plane I saw, as a kid, was an AA-1 (the smaller Grumman) in yellow/green checkered paint (aerobatic scheme?) tied down at MDW. Grew up there, and my dad and I would ride our bikes by and stop and look at that plane (and the others). That's when there was just a chain link fence you could look through (late 1980s).

FF to this week - I got a random unknown call on my work phone. Prefix near where I lived a while back, so I answered.

A man returning my call about a partnership from March. He had an answering machine and separate VM from the phone company. He didn't know he had VM until this week and had 43 messages, one of which was mine.

4-way partnership in a 1978 AA-5 with 180hp. They just put $65k into the panel for all glass last November. 1 partner flies for AA, this guy flies corp, there's a fireman and a gentlemen with a medical issue who hasn't flown in 2-years.

They can't get the medical issue guy to even call them back, but he keeps sending checks. They are trying to see if they can help him out of his share (unclear if he's ready to sell but has sat in the plane only once after the avionics and hasn't flown it since 2019).

600 hrs on a fact reman 180hp engine, 2,000 on the airframe. One partner is an A&P and does much of the maintenance. Paint is original but leather interior done in the late 90s.

Partnership owns the hangar out pays $200/month ground lease. $25/hr dry and leave it with the tanks full. Scheduling seems a bit informal but owned in an LLC with a written agreement (drafted by attorney - I haven't seen the docs yet).

Here's my struggle - I wanted a partnership at around $20k no more than like $35. I've never owned, I don't know anything about mx and I don't have a ton of time. 3-5 way partnership was ideal for limiting my financial liability. Sharing decision making with people maybe more mechanically minded than me and with deeper knowledge/broader view.

I had a 1/5 of a Cherokee 180 lined up in 2019/2020 that was financially perfect! But it was a 1967 with outdated avionics and I hadn't cleared basic med at that point.

Today - this price point doesn't exist. That outdated 1967 Cherokee 180 went from $55k to $100k and I just saw a 1977 Aa-5 with updated paint, but older (530 etc) avionics and steam gauges supposedly close for over $200k. I think that's insane. With the avionics this plane, with low time recent engine and low TTAF, likely appraises in that same range (right?).

Do you take the plunge and drop 50k into a 4-way partnership in a 4-place 180 hp 45-year old plane when you think that value will be coming down BUT it's a 125-130 knot airframe, 4-way partnership in a hangar at the closest airport to you?

Or do you sit on the $50k worrying about being laid off like 2008 and how you'll makeup that cash shortfall.

They haven't advertised the partnership, really, because it isn't their share to sell. I saw a flyer at the airport with no pics and called this guy in March. I wasn't sure if the flyer was from 2022 or 1992.

The guy I called about the Champ advertised next to it said he put that flyer up at Xmas 2019. He was surprised nobody pulled it down (at his airport the manager stamps the date on it to show it was approved prior to being hung).

Thoughts?
 
Last edited:
Do you take the plunge and drop 50k into a 4-way partnership in a 4-place 180 hp 45-year old plane when you think that value will be coming down BUT it's a 125-130 knot airframe, 4-way partnership in a hangar at the closest airport to you?

Or do you sit on the $50k worrying ....
You gotta follow your bliss. Make the offer. Worst case, things don't work out, you suffer a bit of financial pain.

And you don't have to sit on the $50k. You can always speculate on genetic oncology microcaps; maybe get 3X over a year (or 1/3 X, it's tough to make a buck these days.).

As for the wait and see, I sympathize. I like Cardinals for lots of reasons, and prices are down a bit. But still, old round-dial machines are on the market at $100k, plus. They were $65k a couple of years ago.
 
That is a tough decision, Terry. Trying to be financially responsible during these turbulent times is difficult at best. But then again, you only get one turn in this life. I would probably jump on it, but that is just me. I really don’t understand Why prices jumped like they have so whether or not they will come back down soon is a crapshoot.
 
Do you take the plunge and drop 50k into a 4-way partnership in a 4-place 180 hp 45-year old plane when you think that value will be coming down BUT it's a 125-130 knot airframe, 4-way partnership in a hangar at the closest airport to you?

Or do you sit on the $50k worrying about being laid off like 2008 and how you'll makeup that cash windfall.
If job security is an issue, then your first priority has to be saving and investing. Until you have the future provided for, I would rent. You can't live in your plane.

I love the idea of a good partnership, and that sounds like a well run one. However, partnerships are typically less liquid than full ownership. If you might need the money on short notice, that could lead to you taking an even worse deal at resale time.

Also, their valuation sounds extreme. $200K for an AA-5? Sounds like they are trying to recover the full cost of their avionics work. I have heard 50% cited as rule of thumb, eg $65K in glass panel upgrades should increase market value 30-35K.

OTOH if you have reached the point in life where you can lose 10K and not be a big hit on your financial health, then go for it.
 
WWDRD - What would Dave Ramsey Do. If you have an emergency fund and a fund with 6 months living expenses and you can pay cash for the partnership then continue investigating the terms of the partnership, the partners, how you can exit, etc.

If not funded - then not ready.
 
WWDRD - What would Dave Ramsey Do. If you have an emergency fund and a fund with 6 months living expenses and you can pay cash for the partnership then continue investigating the terms of the partnership, the partners, how you can exit, etc.

If not funded - then not ready.

Or it could be "WWWDDD"? What would WDD do?
 
Back
Top