It’s a Tug of War, Well, Not Any More
It was a seller’s market all the way through the end of 2022. The center of the rope is now over on the buyer’s side of the sand in the tug of war. It can seem difficult to keep up with this tug of war with the way market conditions have been rapidly changing over the last few years. As we have shared with you over the past few months, we began tracking 25 of our most commonly transacted aircraft types when we noticed inventory was at a historic low in March of 2022. You can see that full report here. Some key findings that we’ve noticed since then are:
- Available inventory of these pre-owned aircraft has risen by 237% since March of 2022, and 42% since January of 2023.
- Inventory has been rising steadily week by week over the past year, with a slight increase (about 8-10 aircraft) weekly which equates to a steady one tenth of one percent increase each week since January 1, 2023.
- Of the nearly 7,100 aircraft being tracked, 410 are currently available (5.8%). The historical average is in the area of 8%-9% so we are still below “normal’ but nowhere near the 1.7% it dropped to last year.
- Since January 2023, 323 aircraft have come on the market and 115 have sold, approximately a 3:1 ratio of aircraft listed vs. sold. This trend is continuing.
As a current or potential aircraft owner, what do these numbers mean for you? We feel the time to buy is quickly approaching, especially if you want a purchase concluded in 2023. In 2022, we reduced the asking price on only four listings throughout the entire year but so far this year, we have had twelve asking price reductions. Aircraft are sitting on the market for longer periods, which means sellers may be more motivated to complete a transaction at a price that is favorable to buyers. Pricing is still higher than pre-pandemic levels, but it has come down significantly across most makes and models by approximately 15% off of the highs.
Historically, Q4 is the busiest time for purchasing an aircraft due to the tax benefits of a year end deal. Bonus depreciation adjusts from 80% to 60% as 2023 turns into 2024. As we near the end of Q2 and head into Q3, this is the optimal time to start your search and be prepared. Our gut feel is 3Q will be the most favorable time in the near term, and pricing is at their lowest levels in two years.
You can get ahead of the year end rush of buyers and premium pricing. If timed correctly, you will have your pick of the “best buy” aircraft based on pedigree, location, and price.
