I was only talking about used aircraft prices, not aviation as a whole. The one thing the market hasn't seen too much of, is a large volume of aircraft entering the used market in a short period of time. If all of these baby boomers are dying off/hanging it up and selling their aircraft at roughly the same time, it could press the values down significantly. It's tough to command a premium price when there are 50 other aircraft just like yours asking for less. When there are only 5 decent examples, it's much easier to hold out for better offers.
I'm not talking about 50% reductions in value, but it's not unthinkable that we could see 15-20% on high volume models (182s, pa24/28/32s, possibly Bos).
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Look at it this way. You're always racing inflation.
If inflation is 3% a year (just pick a number - nobody believes the government one anyway, so 3% works for big picture planning for this post) in nine years, the aircraft, the maintenance, the fuel, everything in aggregate will cost 9% more. Average.
If you wait for ten years for Boomers (or anyone else) to "die off and flood the market with airplanes" what do you suppose the "discount" will be from the "flooding"? 10%?
You saved 1%. And YOU needed a 9% increase in income to just stay right where you were in purchasing power while you waited.
Realistically if your budget today says you need 15% more income to "afford an airplane" you're more likely to own by forcing yourself to live on 15% less NOW or increasing income via a new job or raise, or a combination of both and buying as soon as you can, than waiting around, even doing real well and making that 9% raise and still needing 15% more in your budget to own at the end of nine years.
Dave Ramsey has a phrase he uses when counseling people out of debt who want to save a percent here or a percent there on their debt by shuffling credit cards to new ones and things like that. He says, "It doesn't matter because it doesn't move the needle enough."
Moving the needle enough to afford a single owner aircraft is a big move for a lot of folks. It usually requires a major lifestyle change.
Only way to know for sure is to run your own numbers with your own written budget. Even to join a co-ownership I played with spreadsheets from December to May the year I bought. The spreadsheet always said the same thing. "You can do it but you won't be doing [list of other stuff]."
And then of course that analysis continues after ownership. We want a GPS and are mandated to ADS-B. Both of those items together mean, "You can do it, but you won't be doing other stuff."
You're going to wait ten years before you buy?
Agreed. Make the numbers work or don't, but planning to wait ten years without making a lifestyle change won't work for most people.
That would fit historical timing.
Yup. 11 years. Typical down turn. Administrations have very little effect on it. They try and usually make it worse via Fed manipulation. They've also set the precedent that bailouts are now the only lever they have against them with no more room to move things via Fed games. Being "too big to fail" is sadly now a real business strategy for some.
Once the rules of the game were broken for multiple huge companies to avoid easily predictable failures and pain (GM, AIG), everyone knows the taxpayer is now on the hook for any large business failure. The politicians can't afford to allow companies that big to fail and then after claiming they're the "job creators" (hint: They're not...) have to answer politically for the job losses.
