Sitting at my desk day after day, I receive e-blasts for preowned business jets all day long. It is really interesting to see the subject lines of today, as they are changing from just a few months ago.
In 2017 and 2018, average days on the market from the inception of a listing to an agreed upon LOI was 34 for our listings. Things were selling so quickly there was hardly time to advertise them in traditional print media. Most e-blasts were just about “new to market.” From that notice, we hardly advertised the listing again. If we did, it might have been a maintenance update or some other relevant bit of information meant to round out the marketing. Next thing you knew, it was under contract.
Since the beginning of the year there has been a slight dip in activity, increase in inventory, and rise in sales cycle timing. Many sellers have had to adjust their pricing based on market conditions. I do not mean to create a market panic—merely, just a realignment of the thinking. The sky is not falling and we are not falling back into a doldrum market. I will say that what I see missing is a frenzy that was in play for the last two years. It has been replaced with a cautious optimism and in some circles an anxiety about world market conditions.
Here are some suggestions to help you prepare for a more stable market without the frenzy. Price cautiously the first time. For those who say let’s leave the bullish pricing in play and we will let the market drive us to a correct place—be careful. The market may not be your advocate.
Markets tend to seek out sellers who do their own homework. They do not feel responsible to help those who don’t seem to want to help themselves get pricing right. If your listing is priced too high, you are apt to be overlooked. What happens next is you might start to chase the market and find yourself looking like a seller with anxiety rather than one who is confident and aware of market conditions.
So now to match words with actions. As I watch the e-blasts come across my screen all day, the subject lines reflect the current state of affairs. The “new to market” subject line is far too often replaced with “price lowered” or “major price reduction.” My favorite is “owner wants to be next to sell.” I can assure you the owner that wants to be next to sell would have been smarter to have been the last previous one to sell. That owner will undoubtedly have received more for that airplane than the next one to sell. That last owner that sold probably understood sooner the lack of frenzy in the market and wanted to anticipate the anxiety in the market. The broker provided the intel and the seller trusted the work. This allowed the airplane to be more smartly priced to start with, eliminated the need for continued price reductions, and the need to shout to the world that this owner wants to be the next to sell.