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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 22 Apr 2022, 02:45 
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Username Protected wrote:
2. Do NOT finance it. If you can pay for it buy it, if you cant...wait.


Why not? Interest rates are low, inflation is coming. If you can have somebody else buy it for you and you rent it at low interest rates, why not? In a few years the interest on that loan is going to look spectacular, and the inflation will make the principal on that loan look trivial. Use your cash to do something useful, invest in something that will grow at a rate in excess of inflation. I have never understood that philosophy. Almost think it is an ingrained sacred cow, but a fallacy, propagated by financial types. :scratch:


In bad economic times the airplane is the first to go… but no one’s buying. So now you have a payment when you don’t need or want one and might need the money to help feed your failing business that you speak about (you know, that investment) … when the bad times come those with less debt survive and those with no debt profit. But what do I know? I’ve only been through 4 of them.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 22 Apr 2022, 07:02 
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Username Protected wrote:
I’m in market and flying/riding in a bunch of different planes with a 10 year plan. I agree something has to happen but I fear it will be ugly. I’m not a buyer in this market but I’m planning.

Side note: Mark, did you find a pilot to ferry your new bird?



Not yet, I don’t have a firm time schedule when the HOTS are finished. Thanks!


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 22 Apr 2022, 08:21 
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But remember, its better to be flying an overpriced airplane than sitting on the ground looking at Controller.

Sage advice. :cheers:

Even the worst economic decisions I've made in aviation are still ok.


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 22 Apr 2022, 08:45 
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Sounds reasonable. Guess it is all in what you do with the cash you free up. Last recession, We financed the plane and started buying (financing) rental homes, when everyone was selling. Probably more luck than anything, but those homes have doubled in value and paid their way the whole time. Just don’t finance the plane and use the extra money to buy a bass boat and a pickup truck ;-)

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 22 Apr 2022, 08:49 
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Username Protected wrote:
No question a 25% discount is coming to aircraft pricing - and some 50%.... but when is the question? This year? Next year? The year after? For some of us those years are years we cant get back flying the airplanes we want to fly. There aren't any bumper hitches on hearses.

As someone buying an airplane right now thats a pretty scary thought. For those buyers like me the best option is to

1. Buy less airplane than you can for the best price you can.
2. Do NOT finance it. If you can pay for it buy it, if you cant...wait.
3. Make sure the airplane you are buying will serve your needs for the next 10 years allowing you to overcome any short term crash.
4. Buy an airplane that has upgrade options to allow yourself ways to improve it as time goes along prolonging your need to take that inevitable hit when you sell.
5, Hope for the best! But remember, its better to be flying an overpriced airplane than sitting on the ground looking at Controller.


I fear this is correct, but I further fear it means losing a number of planes as another set of sellers who will not accept the reality of the value change, will instead simply let a plane rot away.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 22 Apr 2022, 13:08 
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I am amazed at the number of hangar queens that people will not sell at what is the going rate. they will let it corrode into the pavement.

An example, we have a turbo Dakota on our field that has sat (in a hangar) for 20+ years and will take a lot of items replaced to get it airworthy but he insists it is worth what you can buy a decent one with a fresh annual on controller. he will never sell it and possibly it will sell when there is an estate sale.

any item is only worth what someone will buy it for be it a painting, land, or aircraft.

I am looking for a turbo Arrow or Dakota for my Daughter and I think I will wait for a year or two until the prices will (maybe) be more reasonable.


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 22 Apr 2022, 13:20 
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To be fair, a Turbo Dakota isn't really a Dakota, but a fixed gear Arrow.


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 22 Apr 2022, 15:38 
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Username Protected wrote:
I am amazed at the number of hangar queens that people will not sell at what is the going rate. they will let it corrode into the pavement.

An example, we have a turbo Dakota on our field that has sat (in a hangar) for 20+ years and will take a lot of items replaced to get it airworthy but he insists it is worth what you can buy a decent one with a fresh annual on controller. he will never sell it and possibly it will sell when there is an estate sale.

any item is only worth what someone will buy it for be it a painting, land, or aircraft.

I am looking for a turbo Arrow or Dakota for my Daughter and I think I will wait for a year or two until the prices will (maybe) be more reasonable.


I think many of us have lots of possessions we bought with yesterday's dollar that would have more value to someone else if we sold, but choose not to. It may be frustrating/irrational that someone has a "hangar queen". To the owner it may mean being able to feel they "own an airplane" or are able to talk to their friends about being a pilot and airplane owner, even if they haven't used it in a few years.

One attribute that makes the United States great, is the fact, we have private ownership of real assets and we can choose to do what we want with them, even if it means they just sit and die slowly. Just look at all the estate auctions that have workshops filled with projects and tools not started or minimally used. Another great thing about America is the freedom to dream big even if it doesn't come to fruition.

I am leaving now to go look at my snowmobile trailer that hasn't had snowmobiles on it for 3 years.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 22 Apr 2022, 16:07 
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Username Protected wrote:
I think many of us have lots of possessions we bought with yesterday's dollar that would have more value to someone else if we sold, but choose not to. It may be frustrating/irrational that someone has a "hangar queen". To the owner it may mean being able to feel they "own an airplane" or are able to talk to their friends about being a pilot and airplane owner, even if they haven't used it in a few years.

One attribute that makes the United States great, is the fact, we have private ownership of real assets and we can choose to do what we want with them, even if it means they just sit and die slowly. Just look at all the estate auctions that have workshops filled with projects and tools not started or minimally used. Another great thing about America is the freedom to dream big even if it doesn't come to fruition.

I am leaving now to go look at my snowmobile trailer that hasn't had snowmobiles on it for 3 years.


I totally agree. Still makes me sad to see airplanes rot away from lack of use.

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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 22 Apr 2022, 20:40 
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Joined: 03/28/17
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Username Protected wrote:
I am amazed at the number of hangar queens that people will not sell at what is the going rate. they will let it corrode into the pavement.

An example, we have a turbo Dakota on our field that has sat (in a hangar) for 20+ years and will take a lot of items replaced to get it airworthy but he insists it is worth what you can buy a decent one with a fresh annual on controller. he will never sell it and possibly it will sell when there is an estate sale.

any item is only worth what someone will buy it for be it a painting, land, or aircraft.

I am looking for a turbo Arrow or Dakota for my Daughter and I think I will wait for a year or two until the prices will (maybe) be more reasonable.


This is a problem all around the country; inoperative, inactive airplanes tying up hangars. In 2017 FAA codified Hangar Use Rules prohibiting indefinite storage of inactive airplanes in hangars at airports receiving federal assistance.

This was a gift to those complaining about this issue, but they must exercise their rights by informing the airport sponsor, and if no correction is made, filing an FAR Part 13 complaint, well documented. How to file an FAR Part 13 Informal Complaint can be found on the internet.

This situation triggers a violation of 4 grant assurances and can result in the sponsor funding being cut off, and further, a civil suit could be made regarding defrauding the taxpayers by signing grant documents assuring compliance, but not complying.

But, somebody needs to come forward and act. It's not that hard, and the FAA is mandated to respond.


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 18 May 2022, 20:54 
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I am not in aircraft sales but, with the 5% interest rates on Real Estate, we are seeing home prices plateau and new builds slow down in parts of Northern Virginia. The raw data is available publicly from our Realtor friends at http://www.nvar.com or over a beer talking to a few builders.

It would be interesting to correlate this year's data, with plane prices and time on market now, as well as historical prices for real estate and aircraft in 2005-2009, 1998-2002, 1979-1975, 1979-1982, and 1970-1975. That would certainly be an interesting overlay. What we don't have for aircraft, necessarily, is the raw sales data that exists with the titles and tax records in the courthouses.

With the lack of "cheap" money, have we peaked?
Is it time for the "R" word?
Will we see aircraft acquisition slowing down or have "we" already seen sales and purchases slowing?

...curious...


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 18 May 2022, 21:13 
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I think the key is this. If you want and airplane (or NEED an airplane) their value to you and your lifestyle is enormous.

One has to decide whether (1) you an afford the airplane even in bad times and will USE it and
(2) Whether the money in the bank is MORE valuable to you and your lifestyle than the plane is.

Prices will come down. They wont ever be what they were 2 years ago but they will come down then plateau, then go back up a bit, then who knows.

Meanwhile the one commodity you have in life that is absolutely irreplaceable is going by. TIME.


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 18 May 2022, 21:14 
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Username Protected wrote:
I am not in aircraft sales but, with the 5% interest rates on Real Estate, we are seeing home prices plateau and new builds slow down in parts of Northern Virginia. The raw data is available publicly from our Realtor friends at http://www.nvar.com or over a beer talking to a few builders.

It would be interesting to correlate this year's data, with plane prices and time on market now, as well as historical prices for real estate and aircraft in 2005-2009, 1998-2002, 1989-1995, 1979-1982, and 1970-1975. That would certainly be an interesting overlay. What we don't have for aircraft, necessarily, is the raw sales data that exists with the titles and tax records in the courthouses.

With the lack of "cheap" money, have we peaked?
Is it time for the "R" word?
Will we see aircraft acquisition slowing down or have "we" already seen sales and purchases slowing?

...curious...


FIFY. (I think)


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 18 May 2022, 22:27 
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Username Protected wrote:
I am not in aircraft sales but, with the 5% interest rates on Real Estate, we are seeing home prices plateau and new builds slow down in parts of Northern Virginia.

5% isn't enough to stop this runaway train. For the past 100 years or so, 5% has been an excellent rate. It's harder to compare pre-1971 but it's not hard to see that 5% is likely to be as good as it gets for the next decade or more. During the great expansion/post-WWII boom, 5% was great and 6% was average. Rates were over 10% for seven continuous years in the late 70's and early 80s.

Attachment:
historicmortgagerates.png


https://www.thetruthaboutmortgage.com/c ... rly-1900s/


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 Post subject: Re: Aircraft inventory levels are critically low.
PostPosted: 18 May 2022, 23:16 
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Rates will have to keep going up to curb the amount of inflation we have. 5% is cheap compared to what the future holds.

Aircraft values will start to decline in the near future and continue, I don’t see a leveling for old legacy piston aircraft.


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