Many of the now-daily articles and blogs about the shifting preowned business jet market focus on the rising inventory of airplanes listed for sale. Some highlight the price of the aircraft being offered for sale and settle in on weaker pricing, while others deal with the number of days on the market being greater than a year ago.
If you string these narratives together, you come up with one long market condition discussion about a weaker preowned market. But what is the truth about these shifts as they relate to the opportunities for a buyer?
I have written lately about judging market conditions by the subject lines of the e-blasts we all receive daily. This year, they have changed and speak to what could look on the surface to be much weaker than reality. The constant number of “Price Reduced,” “Must Sell,” or “Owner wants to be next to sell” might lead those watching to believe that the market is moving downward quickly.
The greater outcome of this perception is to send buyers to the fence to sit, thinking that waiting would be better than acting now. However, I disagree with the perception of a rapidly falling market. I still am of the belief that many sellers have come to market not trusting the professional hired to market their airplane and are throwing a dart at the wall to pick an asking price.
Those of us dedicated to market analysis and valuation skills, based on real comps and detailed analysis, are the best ones to guide the clients to the reality of the market. What occurs when darts are thrown is the listings sooner than later must announce a lowered price. You get enough of this visual and begin to believe the sky is falling.
It is critical for aircraft brokers to be very careful about the expectations being set for their clients. The reality of this market is not as bad as one would believe if solely using the subject lines of the e-blasts as a barometer. Even seeing a greater number of days on the market can create a sense of weakness.
The reality is that many sellers are using the dart pricing method and then taking a no-hurry-to-sell approach, spending extra days on the market to develop an awareness for what the right price should be. When that is achieved and they announce to the world a new price, unnecessary time on the market occurs and a perception of weakness in the overall market is reinforced.
This delay of getting it right in the first place can actually cause a seller to have to make a bigger adjustment later based on the reality that the market is always moving down some percent per quarter just based on market depreciation for a piece of equipment.
The bottom line: trust the process of the professional. Don’t just choose the partner who says they can get you more than anyone else can. If it is too good to be true, it usually is. This market is not in a free fall. It is simply in a natural progression and will reward those who set better asking prices and expectations, resulting in shorter days on the market. Believe it or not!