I’m calling the peak

Chrisgoesflying said:
Yes, it’s CAD which would be right around $8.50 in USD.[/QUOTE]
:)
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Quick-while in Canada getting cheap prescription drugs get cheap Canadian gas while you’re at it!
 
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wilkersk said:
When I hear this, I always wonder, "what changed?" If they could afford the 1st mortgage, and the HELOC payments, what happened to cause them to "(lose) their homes"?

The reason I ask is that during the 08-09 panic, I had a couple of co-workers that did that. One just turned the keys in and defaulted, the other worked out a bank-sale. But, in both cases, they still had their jobs and their monthly payments were the same. They just freaked out about suddenly being upside down on their mortgage. " I tried talking them out of it. But, they said something about not throwing good money after bad. And that was that. I just never understood. Those same houses today are worth nearly 3 times what they were less than 20 years ago.
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I think it was mostly psychological. They couldn't get past the idea of making a 400K mortgage payment on a 300K house.

I felt really bad for the guy across the street from me. Reggie was a retired NYC firefighter who moved to FL after 9/11 to live the good life. Bought his house at 300K and really took good care of it. Always in the yard working. Market value spiked to 450K a year later and he thought he won the lottery. He refinanced and pocketed 100K cash, which he spent on a pool and a luxury car. Not too long afterwards the value tanked to about 250K. It just really demoralized him to have that huge monthly payment on a fixed income. He missed a few payments and the bank started the collection process. That snowballed until eventually he just said EFF IT and walked away.

Some people just can't grasp delayed gratification, perhaps because hypothetical appreciation in the future is not as real as CASH NOW!!!!
 
Ed Haywood said:
He refinanced and pocketed 100K cash, which he spent on a pool and a luxury car.
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I see this a lot - and all I can do is shake my head. He essentially took out a 30 year home loan for a car - which depreciates 50% in the first year or two. Long after it's used up and gone to the junk yard he'd still be paying for it on that 30 year loan. And regardless of how valuable the home might be, borrowing money still means you have to pay it back, pay the monthly mortgage. Debt is Debt.

Another example. When the seller offers "a carpet allowance" cash back at closing, who are they kidding? If they didn't offer that, I'd get the house that much cheaper. And the cash back is really excess mortgage that I'm paying off over 30 years.
 
People are way too emotional about their money. House values are declining? Let’s sell before it goes to 0. Stock and/or crypto market crashing? Let’s sell before it goes to 0. Then they get out with huge losses. Had they stayed in it through the crash, they’d still make money on it, even if they bought in right at the previous peak. Has always been the case for stock. We don’t have enough history on crypto but so far it also holds true, especially for BTC and ETH. So it’s not so much that they can no longer afford the house and default, as Ed Haywood wrote, they want to get out of what they perceive as a bad deal now because they don’t look forward 10-15 years - instead they look at “oh sh**, this thing was worth $500k yesterday and now it’s $300k”.
 
Chrisgoesflying said:
People are way too emotional about their money. House values are declining? Let’s sell before it goes to 0. Stock and/or crypto market crashing? Let’s sell before it goes to 0. Then they get out with huge losses. Had they stayed in it through the crash, they’d still make money on it, even if they bought in right at the previous peak. Has always been the case for stock. We don’t have enough history on crypto but so far it also holds true, especially for BTC and ETH. So it’s not so much that they can no longer afford the house and default, as Ed Haywood wrote, they want to get out of what they perceive as a bad deal now because they don’t look forward 10-15 years - instead they look at “oh sh**, this thing was worth $500k yesterday and now it’s $300k”.
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There are 4 types of biases that are basically hardwired into humans: Similarity, Experience, Expedience, Distance, and Safety. We can forget about all but Expedience and Safety for this one. Expedience is the bias to do something NOW rather than wait and get more information. Safety comes in when people are more worried about losing something than is realistic. If you give someone $10 and say they can keep the 10 or invest it and have the chance of making 100, but they might lose the 10, they will generally keep the 10. When people dump out of something during a slump and lose money it's because they are exhibiting those two biases.

As to the title of the thread, I'm calling "Peak Airplane" because I just bought one. Of course they will drop now!

I'm also calling for rain tonight because I'm washing my car this evening when it cools off a bit.
 
I bet by Fall there are a lot of planes on the market at 10%-20% lower asking prices. Already seeing people cut listed prices on planes that have been on the market a bit.
 
ConstaP67 said:
I bet by Fall there are a lot of planes on the market at 10%-20% lower asking prices. Already seeing people cut listed prices on planes that have been on the market a bit.
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Yep. I thought about waiting, but with interest rates going up and wanting to fly more, I took the leap. Honestly, I've seen people asking $40K for a basic VFR 150! The market will straighten out. High interest rates will keep people out of the market.
 
TCABM said:
…Houses are listing at lower prices and staying listed much longer. Just over six months ago my neighbors sold their house over asking to the first showing and had 45 more showings and five backups at the elevated price. …
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Following up on this. What I believe was the best value house in our neighborhood went under contract after 11 days on market, at full asking price. Seller turned down a couple of $1000 low offers.

The price per sq ft on that full asking price is a below what we’ve averaged over the last year or so.
 
Ed Haywood said:
As compared to ... ?
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For the last 2 years it’s been well closer to 1000-1200ish. This year, and particularly over the last 3 months there’s been an acceleration in listings.

What’s notable as well, as @Chrisgoesflying mentioned is that some of the deals don’t look awful anymore. Some still have to come down to earth, but others are starting to look more reasonable.

still, I think I’ll hold out on upgrading until VanBortel has a BOGO deal on Columbia 350s :D
 
Terry M - 3CK (Chicago) said:
@Tom Wells where do you get the number? Just in the search?
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Yep, just taking the high level number of listings for the SEP category. It’s pretty much a daily ritual of mine to check it. Should probably just write a webscraper to pull it!
 
Just saw a ‘76 Cessna 182P model list for 109k negotiable… 1700smoh though…. Still it feels like it’s going in the correct direction.
 
ConstaP67 said:
We are past the aircraft/real estate peak as I’m just now in the process of listing my condo. :)
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ConstaP67 said:
We are past the aircraft/real estate peak as I’m just now in the process of listing my condo. :)
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It's crazy how fast the real estate market flipped. That said, prices have not declined yet, they just stopped rising.
 
Tom Wells said:
Yep, just taking the high level number of listings for the SEP category. It’s pretty much a daily ritual of mine to check it. Should probably just write a webscraper to pull it!
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I've been doing that for a couple of years...habit I guess, or just a "tire kicker" hobby. Two+ years ago, it was like 800-900...today, 1902.

Earlier in this thread (June 5 2022) I noted 1765...
 
So, I have a *lot* of thoughts on this subject. For the past four years I've been systematically mining every aircraft sale listing on Controller and Trade-A-Plane, and I've built up a huge amount of supporting data / data enrichments / predictive models around that dataset. The bulk of that work goes to supporting aircraftlookup.com and TAP Deals, but I also have written some stuff about this on a blog that runs alongside these tools.

The first relevant post here is "Is This the Peak Price for Aviation?" - it looks like available inventory has been climbing super fast in the past few months - we're seeing more aircraft hitting the market than any other time I've been recording data. I have to think that that's going to have an effect of driving prices down, not to mention gas climbing, interest rates biting into folks' abilities to pull loans on aircraft, recession fears, inflation, etc.

Second, I wrote something up just this week that looks at how you could come up with a consumer price index of sorts for general aviation sales. In that post, I show that in 2018-2021, aircraft prices mostly kept pace with inflation, but last summer it started outpacing inflation big time. Of course, remember that at this time, *inflation itself was also speeding up rapidly*, so aircraft prices were going crazy to meet that inflation hike and then outpace even those high levels.

That pattern seems to have peaked this spring, where aircraft were priced ≈25% higher than inflation alone would predict - now we're climbing back down that hill rapidly and looks like we might get back on track with background inflation. Would love to talk shop about all this stuff, I spend like... gosh, way too much time thinking through these dynamics. But yes, I think roughly this spring or early summer, we hit the peak. Not only just because it's unsustainable to imagine, say, a 300k 1970's four seater, but because the data does seem to back this up at this point.
 
WDD said:
I see this a lot - and all I can do is shake my head. He essentially took out a 30 year home loan for a car - which depreciates 50% in the first year or two. Long after it's used up and gone to the junk yard he'd still be paying for it on that 30 year loan. And regardless of how valuable the home might be, borrowing money still means you have to pay it back, pay the monthly mortgage. Debt is Debt.

Another example. When the seller offers "a carpet allowance" cash back at closing, who are they kidding? If they didn't offer that, I'd get the house that much cheaper. And the cash back is really excess mortgage that I'm paying off over 30 years.
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you’re always welcome to offer no allowance and a lower price. They’re doing it for people who don’t have the cash to buy new carpet, that obviously isn’t you.
 
There are actually multiple mid-time Piper Cherokee 140’s listed in the $30,000 - 45,000 range now. Six months ago, they all had a list price of over $50,000.

And inventory seems to be increasing by 10% each week. Over 140 listings for Cessna 172’s under $80,000. Six months ago, there were just a handful and they were project planes, to say the least.
 
Point of reference - forum yesterday given by an airplane broker. He said prices are down between 3-6%. Looks like peak.
 
bflynn said:
Point of reference - forum yesterday given by an airplane broker. He said prices are down between 3-6%. Looks like peak.
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Hmmmm, sell the Comanche now, wait a year and pick up a PA32?
 
bflynn said:
Point of reference - forum yesterday given by an airplane broker. He said prices are down between 3-6%. Looks like peak.
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If a broker is telling you that it’s probably even more.
 
Or....the quality of planes on the market has dropped 3-6%.
 
Racerx said:
Or....the quality of planes on the market has dropped 3-6%.
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The opposite. Listings have lower airframe and engine times, and better avionics and overall condition. Compared to the first quarter of this year, you can get a better plane for less money.
 
And the money I was using to pay for a plane is in my IRA portfolio - in the S&P 500 - which is down 30% or so from Jan. Looks like I’ll wait 2- 3 years to recover something, and hope the prices don’t explode again.
 
WDD said:
And the money I was using to pay for a plane is...down 30%...
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I think I remember a post from you ~9 months ago about where to park your money for a possible short term purchase (like a plane) in an environment where safe investments are earning nothing. If I'm remembering correctly, looks like you rolled the dice and kept your funds in the market. I've been slowly dollar cost averaging into the market but keeping some funds in cash, losing substantial ground b/c of inflation, but at least I could possibly pull the trigger on the right opportunity. I'm a firm believer no one can predict the market, but, I "feel" the worst is in front of us so I worry your 2-3 year recovery window might also be optomistic.

I believe you were in the market for a 182. Is that right or am I'm all wet on that too? :)

Part of my issue is a plane purchase would be solely for me. My wife and I had a cruiser for 3 years and, when we sold it, we said we would get back into boating when our kids left the house. Well, that happens in 3 weeks. Unfortunately, I might be able to swing a plane, or a boat, but certainly not both :sigh:
 
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