Why are there so many Cirrus for sale in used aircraft websites? Maybe too many fractional ownerships going bust?
How many are for sale? They've built about 7,600 SR22 and SR20 models. If 15% are on the market, that's 1,140 aircraft.
Perhaps it is coming time to pay to repack / replace the chute? Having an emergency chute is all gravy until it comes time to pay for that extra security.
In the Cirrus forum I’m part of, the largest Cirrus reselling agent stated this about current conditions recently (my emphasis): “Though supply of units for sale did increase 3-fold from its low of about 80 units in Dec ‘21, it has very much stabilized in the low 200s. At this level, supply of listings is still well below the historic peaks and, of course, is further below those peaks as a percentage of fleet, since Cirrus continues to deliver hundreds of new units each year.“ What you’re seeing is getting back to healthy levels of inventory from what was a constrained used market the last couple of years.
I see that for a mere $250k you can buy a Cirrus with a burned out engine, parachute that needs repacked, and a panel that needs to be replaced (dual GNS 430s, etc.) I guess there is a market for those. Not something I'm familiar with.
You need to subtract the wife is making me sell it and the ones that will never fly again due to poor maint.
I wonder how many and to what degree these planes are upside down with the finance company? When do we see repossessed and short sales?
I would find it hard to believe any Cirrus would be under water. You need minimum 10% down and prices don't seem to have moved much from the peak. Anyone that bought more than a year ago is likely sitting on some additional equity from appreciation.
How many new planes have they sold? Is the used market getting flooded because of the "trade-in" factor. I always thought of Cirrus as being the rich person's single engine. The owners can afford to buy a new one just because their old one is a couple years old. Like high end luxury cars, many of the owners trade them in for a new one every two years because it's too old.
My anecdotal observation is most but certainly not all of the ones on the market are later models with purchase prices pushing or exceeding $1m. That’s a big monthly nut, so with some industries slowing down, and the whole “things are fine for me but I hear there’s a recession coming “ so everyone pulls back and causes a recession mentality going on, I think that has driven many to sell. Those with a smaller investment (and low or even no payments) are weathering just fine.
I flew a SR20 a bunch last year, to get recurrent. I liked the airplane, but didn't see it as extra special, or particularly capable when compared to other aircraft. Some nice features, some klunky ones. For the "non wealthy" such as myself, it didn't engender any airplane envy, as in "I'd buy one if I had the money". I think it might be a good partners or club airplane if the prices sink late this year/early next. A $50K premium over a comparable airplane isn't too bad spread over partners or club members.
I ended up with an ‘01 Gen 1 SR22 after trying to find the right Bonanza for almost a year. It’s nice. It’s light and fast. It climbs like a homesick angel. It can carry 1,140 lbs and doesn’t have a funky aft cg problem that limits what you can put in the back. The back seats are reasonably comfy and ingress/egress is easier with the 2 doors. It’s not as solid or refined as the Bo. It’s nice to know the chute is there if needed. I wish it had 3 levers instead of 2. It’s also nice when I write the check to the insurance company for a fixed gear aircraft.
Here's an analysis from a big Cirrus dealer. Personally, I think their projections are very rosy but then again it's completely in their interests to downplay price drops. Hello Fellow Cirrus Pilots and Friends, Aerista is widely known as having the most robust data of Cirrus pre-owned prices. One of the benefits of cultivating this data is that it allows us to pontificate on future market conditions with some degree of confidence. Of course, we often get it completely wrong, but it’s always a fun exercise to try to predict where the Cirrus market is headed. So here’s our take… The price hikes of 2021-2022 have abated and list prices have fallen from their peaks. Deals are now typically struck at a small discount to list price - a condition that was normal prior to Covid, but one we had not seen for 2+ years! However, our assessment is that prices will not return to pre-Covid levels. Inflation and a prevailing balance between supply and demand will keep prices from falling, so those of you hoping the bottom would drop out so you could steal your next Cirrus may be waiting a long time. Inflation Remember the "80s? Big hair, Cabbage Patch dolls and high inflation? Thankfully, only inflation has returned and we analyze its impact below. Our methodology is to calculate REAL depreciation rates by subtracting U.S. CPI from the change in average closing price for that year. We use the G5 Turbo segment because it represents the market very well, with no one-off adjustments that would tend to skew prices, such as CAPS repacks or engine overhauls. Depreciation Before Covid, real annual depreciation hovered near 5%. Though Covid demand brought price appreciation in 2021, we believe the long-term effect was to raise prices to a new base level rather than change the slope of the depreciation curve. We expect a return to real depreciation of 5%. With the economy generating about 6% inflation, this means headline/nominal price levels in the market should be relatively flat. Resupply, not oversupply The balanced supply/demand picture will also support flat prices. Though supply of units-for-sale did increase 3-fold from its low of about 80 units in Dec 2021, it has very much stabilized, with supply hovering in the low-200s. At this level, supply is still below the historic peaks and, of course, is further below those peaks as a percentage of fleet, since Cirrus continues to deliver hundreds of new units each year. Equally important, our transaction data shows that demand kept pace with supply once the restocking reached this low-200s level in 2022. This steady demand shows no signs of abating, even in an environment of higher borrowing costs. So, not only will inflation generate support for nominal prices, continued demand will put upward pressure on real prices. Holdouts All that said, some sellers have retained “recency bias”, believing control of the market remains in sellers’ hands. As a result, a few specific segments of the market (G3 TN with Avidyne and G3 SR22 with Garmin Perspective, for example) have not yet fully adjusted to the reality of a balanced marketplace. Prices in these segments will likely move south due to downward pressure from higher-value segments that have already adjusted to the post-peak period. Summary In short - while we will likely see short-term price declines in a few segments, the rest of the market will be stable with a healthy amount of supply being met by continued robust demand and nominal prices being supported by external inflationary pressure. We hope you find the discussion useful. If you’d like to connect directly, we’d love to hear from you. As always, we appreciate your continued support as clients and friends. Thanks for making Aerista the largest Cirrus broker in the world.
If you're trying to get people to buy aircraft, do you really want to bring up the 80s as some may not have pleasant memories of the economy. Just one example: https://www.thoughtco.com/us-economy-in-the-1980s-1148148 While things did get better (as they will) we haven't seen business bankruptcies rising, although depending on what happens with the SVB and Signature failures... I understand this wasn't your point, nor did you write the above, but in times of uncertainty it is probably not a good thing to get people to compare their uncertainty with times where things did indeed turn for the worse.
It's nuts to buy a million dollar toy. It's nuts to borrow money. All three of those statements are equally accurate or inaccurate, depending on the specifics.
Not my language. This is an email from Aerista and the point I was trying to make is that their projections are a little rosy
Loved the 80’s! So much better than the Jimmy Carter malaise. Last decade of good music. “Morning in America”.
I would think the 20-25% range would be when it hits in earnest, but remember being underwater doesn't mean sale is forced as long as buyer can/does continue to make payments. I would think that most aircraft owners have good credit and recognize the value of good credit so wouldn't just walk away from an underwater loan and crater their credit for seven years like we saw with subprime car and auto loans in the GFC
