I’m calling the peak

For what it's worth, my boss just bought a used '35 cruiser of a mid-00s vintage. I had been helping him off and on in his search, and have been seeing boat prices coming down pretty consistently over the past month or two. Normally this time of year is a seller's market with everyone getting the itch to buy a boat before the season starts up in May. Most boats in the sub-$120K range last year are now selling for $10-$15K less. I have seen boats that were commanding $60K now have trouble getting much movement at $50K. The discretionary toys are taking a hit, especially when they are of the value that typically has people getting a loan on them for $50K+, which is now hovering around 10% interest even for buyers with 750+ credit.

People are balking at the interest rates, which is causing the used market to drop prices to get traction. I have a feeling that the new vehicle market (cars, motorcycle, UTVs, or boats) is going to have no trouble keeping inventory on hand by mid-year as the pool of new buyers shrinks drastically. Of course, that gets followed by layoffs at major auto manufacturers. Buckle up kiddos!
 
One thing to also consider is the fact that plane doesn't equal plane. I can totally see prices for some type of aircraft to drop in the next 12 months but for others to remain constant or even increase. For example, your thirsty travel machines, single engine but especially twin engine will go down in price if some of these owners realize they in over their heads with loan payments, upkeep, gas, etc. Those planes will either turn into hangar/ramp queens or will be sold for pennies on the dollar. On the other hand, you have your Piper Cherokees, Cessna 150/152s, 172s, etc. your typical trainer. I can't imagine those losing much in value simply because of what I'm seeing in regards to numbers of new student pilots, possibly spurred by all the news of the looming "pilot shortage". Flight schools will keep demand high for those planes. Pilots who want to train or time build more independently will keep demand high for those planes. And the barrier to entry regarding purchase price and ownership cost, for those who end up selling their gas thirsty travel machines, is much lower so they might be in the market for those type of planes as well. That's my $0.02 on that topic. No expert opinion, just might thoughts and maybe some wishful thinking since I own one of these "trainers" and eventually will move up to a gas thirsty travel machine - I wouldn't mind if the two classes of aircraft get a little closer in price point by the time I'm ready to pull the trigger.
 
WDD said:
What plane are you buying into?
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It's a secret until I've talked to the folks this weekend :p I will say it a good ol fashioned fixed prop 180 hp 4 seater that is perfectly suitable for someone like me to fly and grow in and learn "how to own" a plane iwth others to tech me the ropes so to speak. I don't pretend to know everything I need to know and as they old saying goes .. I don't know what I don't know so this should be a good choice.






SoonerAviator said:
For what it's worth, my boss just bought a used '35 cruiser of a mid-00s vintage. I had been helping him off and on in his search, and have been seeing boat prices coming down pretty consistently over the past month or two. Normally this time of year is a seller's market with everyone getting the itch to buy a boat before the season starts up in May. Most boats in the sub-$120K range last year are now selling for $10-$15K less. I have seen boats that were commanding $60K now have trouble getting much movement at $50K. The discretionary toys are taking a hit, especially when they are of the value that typically has people getting a loan on them for $50K+, which is now hovering around 10% interest even for buyers with 750+ credit.

People are balking at the interest rates, which is causing the used market to drop prices to get traction. I have a feeling that the new vehicle market (cars, motorcycle, UTVs, or boats) is going to have no trouble keeping inventory on hand by mid-year as the pool of new buyers shrinks drastically. Of course, that gets followed by layoffs at major auto manufacturers. Buckle up kiddos!
Click to expand...

Chrisgoesflying said:
One thing to also consider is the fact that plane doesn't equal plane. I can totally see prices for some type of aircraft to drop in the next 12 months but for others to remain constant or even increase. For example, your thirsty travel machines, single engine but especially twin engine will go down in price if some of these owners realize they in over their heads with loan payments, upkeep, gas, etc. Those planes will either turn into hangar/ramp queens or will be sold for pennies on the dollar. On the other hand, you have your Piper Cherokees, Cessna 150/152s, 172s, etc. your typical trainer. I can't imagine those losing much in value simply because of what I'm seeing in regards to numbers of new student pilots, possibly spurred by all the news of the looming "pilot shortage". Flight schools will keep demand high for those planes. Pilots who want to train or time build more independently will keep demand high for those planes. And the barrier to entry regarding purchase price and ownership cost, for those who end up selling their gas thirsty travel machines, is much lower so they might be in the market for those type of planes as well. That's my $0.02 on that topic. No expert opinion, just might thoughts and maybe some wishful thinking since I own one of these "trainers" and eventually will move up to a gas thirsty travel machine - I wouldn't mind if the two classes of aircraft get a little closer in price point by the time I'm ready to pull the trigger.
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Both of these points say what I was trying more eloquently. I think planes like 172's and Archer's wont come down anytime soon if at all. They are so popular at flight schools (for good reason) that the demand will probably always be there at some level. But others like that obscenely priced 182 in the post above will come down and I think SoonerAviator and Chrisgoesflying nail it. I really believe the "tell" is the fact that inventory is increasing very rapidly and more importantly sales are slowing down. I'm seeing planes "time out" and have the ad renewed etc on what seems like a lot more aircraft, especially the grossly overpriced ones. Just my 2 cents which fair warning may only be worth 1 penny lol.
 
FormerHangie said:
Acually, what a new Skyhawk costs would buy you three Porsche 911s.
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That is true for today, but in 1970 a new 911 was the same price as a new 172. This is a major factor why 50 year old airplanes are still realizing high resale values today. The major manufacturers will not be lowering the price of a new airplanes, so antique airplanes are always going to be a cost effective alternative.
 
A 1971 Porsche 911 was about $7500 new. A 1971 Cessna Skyhawk was about $15K. My plane is a German designed and manufactured two seat 150 HP sport plane built in 1971, roughly comparable to a 2.2 liter 911 of that period in its appeal and it also cost twice as much new, or about $15K. So yes, new planes can very easily cost as much a several new Porsche 911s, then and now.

When I was looking to buy a plane, in 2002 and then again in 2010, I was looking for a way to get value for my having fun money. Today that money could buy my 1971 plane at maybe $50K (although I’m not selling it!), a now highly appreciated 1971 Cessna 172 for let’s say 100K, a 1971 Porsche 911 that originally cost half as much as either for over $100K or a new Porsche 911 for $108K and up (way up for many variants).

My view is that for somebody looking to spend their having fun money the older airplane is really good value, and that’s after a period of massive aircraft value inflation.

For reference https://bringatrailer.com/listing/1971-porsche-911e-31/

Or maybe https://bringatrailer.com/listing/1970-porsche-914-6-81/
 
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$197,910 ave price for baron 11/1/2022
$185,057 ave price for baron 1/3/2023
$169,502 ave price for baron 2/3/2023
$191,411 ave price for baron 3/4/2023
$186,757 ave price for baron 4/3/2023
$190,231 ave price for baron 5/3/2023


$291,012 ave price for 340s 11/1/2022
$278,219 ave price for 340s 1/3/2023
$267,906 ave price for 340s 2/3/2023
$253,613 ave price for 340s 3/4/2023
$261,594 ave price for 340s 4/3/2023
$248,822 ave price for 340s 5/3/2023
 
As I've said before, I'd practically call it a hobby of mine to routinely look at airplane for sale ads. I noticed about 6 months ago that prices seemed to stabilize after the pandemic price runaway (and sales slowed too I think). But now, from what I've seen they appear to be on the climb again. I've noticed several listings actually INCREASE in price after their original price/listing.
 
Country Flier said:
As I've said before, I'd practically call it a hobby of mine to routinely look at airplane for sale ads. I noticed about 6 months ago that prices seemed to stabilize after the pandemic price runaway (and sales slowed too I think). But now, from what I've seen they appear to be on the climb again. I've noticed several listings actually INCREASE in price after their original price/listing.
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Starting to see that in real estate too. I think part psychology, and part supply and demand.
Psychologically, sellers have been pricing in an anticipated recession and deflation for a year now. But where is it?
In real estate, while demand has dropped due to higher interest rates, supply has dropped more. In the second home market I am focused on, NOBODY is selling. Inventory is down 75% from last year.
I had the cash in my bank account and was working with 3 realtors in 3 towns, but there is nothing to buy. Last week I said F it and put the money in a 9 month CD. I'll try again next year.
 
Ed Haywood said:
Starting to see that in real estate too. I think part psychology, and part supply and demand.
Psychologically, sellers have been pricing in an anticipated recession and deflation for a year now. But where is it?
In real estate, while demand has dropped due to higher interest rates, supply has dropped more. In the second home market I am focused on, NOBODY is selling. Inventory is down 75% from last year.
I had the cash in my bank account and was working with 3 realtors in 3 towns, but there is nothing to buy. Last week I said F it and put the money in a 9 month CD. I'll try again next year.
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My daughter is experiencing this first hand right now. She is looking for her first house and the choices of nice places are few and far between. I strongly suspect that folks are not selling homes because of interest rates. Personally I'm sitting on a under 3% rate (2.something I just don't recall right now) and there is no way you could get me to sell and them buy in this market. I wouldn't be slightly surprised to see a lot of that happening, people don't want to loose a super strong rate in the current high interest rate market ...

I'm also seeing the same effect in aircraft. I'm hunting for my first plane now that I have my ppl and I'm seeing prices that seem to be coming down as the aircraft sit longer on the market. And I'm seeing aircraft stay on the market longer, like a lot longer. I'm just waiting for the ball to drop at this point to be blunt and a little predatory. I suspect that the decline in prices for aircraft in general has started. Sure some popular models will hold strong for awhile but I'm seeing inventory increases every month for aircraft so as said above supply and demand. It's starting to look like more supply than demand, shouldn't take too long for prices to really reflect that.
 
I think part of it is that many prospective sellers already did so during the runup. If you were flying less and thinking of selling, prices a year ago were pretty persuasive. Will take a while for life to build up a new crop of former aviators.
 
R.L.Mauzy said:
Personally I'm sitting on a under 3% rate (2.something I just don't recall right now) and there is no way you could get me to sell and them buy in this market.
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oh we're all there, welcome to 2021 refi gold rush. But your hypothetical still implies people change dwellings capriciously. That's just not the case for the majority in the real world. Divorces, out of state job offers, cross-country promotions, early widowing. It's all part of the nomadic lifestyle of the working age american, and a rather normal course of action. Most americans can't float two mortgages, and the proposition of being a landlord doesn't change the imposition of having to find housing at the new location at current insane prices and interest rates, which negates whatever low interest rate mortgage you're trying to hold on to.

For those who hit their permanent/retirement home at that time, good for them, but that's just not the majority of the market. To wit, life will force a move before interest rates ever get back down to 2.x%.

On our end, what's more likely to bump us off the pot isn't the rates long term, it's the unabated property tax assessments here in metro Texas. At the rate we're going, any housing change would mean we'd be better off in a state with income tax and a point and a half lower property taxes, given the new reality of asking prices really not differing much across most MSAs we'd look at. Suffocating tightly spaced, crap-foundation, home depot fixture special, tract-box hell with the architectural appeal of a panamax container ship... sets you back half a million dollars today around here. I didn't mind that nonsense when I bought in at 200K, but for 400-500K+ with accompanying property taxes? Yeah, Texas jumped the shark for us. There's a ton of things we want to do middle age for all this toiling, than overpay for housing.
 
hindsight2020 said:
oh we're all there, welcome to 2021 refi gold rush. But your hypothetical still implies people change dwellings capriciously. That's just not the case for the majority in the real world.
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I may have not worded that correctly or maybe your interpreting it wrong ... I'm not suggesting people are en-masse buying and selling capriciously. Rather what I suspect is happening is people who have been thinking about moving/selling a home may be reconsidering due to the overall market and rates etc. An example would be folks who were considering moving closer or further from a city for various reasons like convenience or quality of life consideration may well be putting the brakes on that. Like I said above, I wouldn't dream of selling and then trying to get a mortgage in this market right now. I would stay put if it were me and wait it out.
 
WDD said:
Not making this up: a well known news outlet suggested that to combat the pain of inflation we should do another stimulus check.
Click to expand...

Sure! Just print (borrow) more money! What’s the problem? The national debt is four or five times the Annual revenue. What could go wrong?:rolleyes:
 
hindsight2020 said:
oh we're all there, welcome to 2021 refi gold rush. But your hypothetical still implies people change dwellings capriciously. That's just not the case for the majority in the real world. Divorces, out of state job offers, cross-country promotions, early widowing. It's all part of the nomadic lifestyle of the working age american, and a rather normal course of action. Most americans can't float two mortgages, and the proposition of being a landlord doesn't change the imposition of having to find housing at the new location at current insane prices and interest rates, which negates whatever low interest rate mortgage you're trying to hold on to.

For those who hit their permanent/retirement home at that time, good for them, but that's just not the majority of the market. To wit, life will force a move before interest rates ever get back down to 2.x%.

On our end, what's more likely to bump us off the pot isn't the rates long term, it's the unabated property tax assessments here in metro Texas. At the rate we're going, any housing change would mean we'd be better off in a state with income tax and a point and a half lower property taxes, given the new reality of asking prices really not differing much across most MSAs we'd look at. Suffocating tightly spaced, crap-foundation, home depot fixture special, tract-box hell with the architectural appeal of a panamax container ship... sets you back half a million dollars today around here. I didn't mind that nonsense when I bought in at 200K, but for 400-500K+ with accompanying property taxes? Yeah, Texas jumped the shark for us. There's a ton of things we want to do middle age for all this toiling, than overpay for housing.
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Bought my forever property in 2012. I thought I was doing good then at 23 with 2 houses on 5 acres, 4 miles from the family business at a 3.99% interest rate then. But then the 2021 kneejerk gifted me a 2.65% interest rate. Was already thinking of taking a cash out refi out to tear down and rebuild the detached 2 car garage, but that gave me the kick in the pants to do it.

My sister pretty much gave up looking for a house. Not interested in buying the crap on the market in our area with todays interest rates.
 
WDD said:
Not making this up: a well known news outlet suggested that to combat the pain of inflation we should do another stimulus check.
Click to expand...
How about the 1 trillion dollar coin to combat the debt limit...
 
Broadly speaking, I would put house sale circumstances into 2 categories: necessity and choice. No idea what the proportion is between the two.
 
Ed Haywood said:
Broadly speaking, I would put house sale circumstances into 2 categories: necessity and choice. No idea what the proportion is between the two.
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I mean, I approach that question as, do most people relocate as a function of capricious choice, or economic/life necessity? In my life witness it's not even a contest, necessity represents the statistical majority of that housing trade.

Granted, I'm biased, as a begrudged member of the economic refugee, rootless, military nomad, and unceremoniously gentrified right out of my formative home to add insult to injury. So my outlook and social circles revolve around that relative lack of roots/transplantism as normal. Perhaps I'm the outlier, and Americans are much better off and able to afford to sit their rears gainfully in the same zip code for 50 years of a 72 (decreasing life expectancy is a beotch) year stint on this rocky planet. Sounds nice, but hasn't been my lived experience. Certainly open to stand corrected of course, it's just an anecdotal observation.
 
hindsight2020 said:
Suffocating tightly spaced, crap-foundation, home depot fixture special, tract-box hell with the architectural appeal of a panamax container ship... sets you back half a million dollars today around here. I didn't mind that nonsense when I bought in at 200K, but for 400-500K+ with accompanying property taxes? Yeah, Texas jumped the shark for us. There's a ton of things we want to do middle age for all this toiling, than overpay for housing.
Click to expand...
Sir, you have a gift. This is the funniest but on-target thing I've seen today. Ain't just Texas, though. That's the sad part.
 
hindsight2020 said:
On our end, what's more likely to bump us off the pot isn't the rates long term, it's the unabated property tax assessments here in metro Texas. At the rate we're going, any housing change would mean we'd be better off in a state with income tax and a point and a half lower property taxes, given the new reality of asking prices really not differing much across most MSAs we'd look at. Suffocating tightly spaced, crap-foundation, home depot fixture special, tract-box hell with the architectural appeal of a panamax container ship... sets you back half a million dollars today around here. I didn't mind that nonsense when I bought in at 200K, but for 400-500K+ with accompanying property taxes? Yeah, Texas jumped the shark for us. There's a ton of things we want to do middle age for all this toiling, than overpay for housing.
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Come to my neck of the woods. 405k assessment. 2.9% tax rate.....and income tax.

I paid 176k in 2012. I feel your pain.
 
hindsight2020 said:
I mean, I approach that question as, do most people relocate as a function of capricious choice, or economic/life necessity? In my life witness it's not even a contest, necessity represents the statistical majority of that housing trade.

Granted, I'm biased, as a begrudged member of the economic refugee, rootless, military nomad, and unceremoniously gentrified right out of my formative home to add insult to injury. So my outlook and social circles revolve around that relative lack of roots/transplantism as normal. Perhaps I'm the outlier, and Americans are much better off and able to afford to sit their rears gainfully in the same zip code for 50 years of a 72 (decreasing life expectancy is a beotch) year stint on this rocky planet. Sounds nice, but hasn't been my lived experience. Certainly open to stand corrected of course, it's just an anecdotal observation.
Click to expand...

Piperonca said:
Ain't just Texas, though. That's the sad part.
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Yeah, unfortunately you're right. I live in an area where the median income is something like $45k/yr. With this current market, a decent house that's more or less entry level starts around $300k. Anything below that and you're browsing 30+yr old homes with popcorn ceilings and wallpaper in a less than desirable part of town. It's really sad.
 
NealRomeoGolf said:
Move to Peoria. We have the lowest appreciation rate in the state. :cool:
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I knew when I bought it the appreciation was gonna be nuts. Was assessed at 378 the year before I bought it for 176. Had a few good years before the taxes were more than the mortgage. When it hit 12k the bee ag exemption kicked in. Saves me 3.8 amu's this year.
 
Racerx said:
Come to my neck of the woods. 405k assessment. 2.9% tax rate.....and income tax.

I paid 176k in 2012. I feel your pain.
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I am in Illinois also, and my rate is a little higher than yours on about the same assessment. About 1k per month is RE taxes. Poof, gone. Every month.
 
charheep said:
I am in Illinois also, and my rate is a little higher than yours on about the same assessment. About 1k per month is RE taxes. Poof, gone. Every month.
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3.3% down here, but our valuations pale in comparison to the big city. Central Illinois welcomes you with open arms....and cheap hangars.
 
MBDiagMan said:
Sure! Just print (borrow) more money! What’s the problem? The national debt is four or five times the Annual revenue. What could go wrong?:rolleyes:
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Given that one cause of inflation is too much money in the system, giving people more money sure isn't going to help the situation.
 
I remember rates in the mid-teens, perhaps as high as 18%. Inflation was brutal, double-digits, and the Fed had bolloxed managment of the money supply for a long while; they printed it with reckless abandon - full employment was the goal, and inflation wasn't a rel worry.

I saw a stat recently, we (the US) are short about 3.5 million housing "units". CA is hurting in particular - NIMBY policies, permitting excesses, etc. Unintended consequences stuff. . .I do know my son and his family are sitting tight on a 2.something mortgage on the east coast. They'd consider a local move for convenience and life-style reasons. But not at today's rates. So that's one more house not on the market, and there is precious little available where they'd like to move to.

6% doesn't scare me, but he (and his peers) balk at that. . .
 
I don't even look... but I do pay a lawyer to make it less
 
NealRomeoGolf said:
3.3% down here, but our valuations pale in comparison to the big city. Central Illinois welcomes you with open arms....and cheap hangars.
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If I wasnt tied to my office, we would be neighbors. Maybe in 5-7 years when I can start my second career.
 
Racerx said:
That worked a few times. Last time had 2 different attorneys tell me no dice.
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I just got bill because we saved some more. Third time in ten years. Although I'm not in Chicago, I'm still in Crook County so I suspect that has something to do with it.
 
Sundancer said:
6% doesn't scare me, but he (and his peers) balk at that. . .
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It's not a matter of being "scared". Back in 1980, prices were laughably cheap on an inflation adjusted basis. Residential real estate prices haven't been any higher in the history of this Country on an inflation adjusted basis than today.

To wit, the national median home price in 1980 was 250K inflation adjusted for 2023 dollars (64.6K in 1980 nominal). Conversely, 1980 median income was 81.7K adjusted. When I went into excel to compare the P/E housing affordability ratios between the 1980 critters and 2023, excel spit out 'lulz'. Per usual, born on third base and speak like they hit a triple.

I'd barefoot pedal my way on a rusty bicycle missing the seat to that closing, and sign a 15% interest rate with a smile today if we retained P/E parity with 1980. To add insult to injury, none of the usual suspects stayed at 15% rates for a fart and a half; everybody refi'd/traded out of those rates by 1983. By '86 they could refi below 10%, and by '89 the rates never went back up even today. Some hardship.

That's the difference. That's why young people are balking today. Thing is, the people who transacted real estate in the 1980s fully understand the distinction I highlight, they just don't like highlighting it, as it dilutes their myth of meritocracy.

BL, it's not about the rate, it's about the price relative to incomes.

Now everything needs to deflate, construction doesn't want to touch it because they're not in the "charity" or "social policy" business as they see it, so idle hands it is and the pricing problem persists. The equity owners don't want to let the govt give up the baby they feel entitled to, because "we were here first", and they vote. And the young, the tax base that needs to function in order for this little societal pyramid scheme to not collapse, are at the losing end of that proposition. Being asked to incur an outsized portion of their labor into the basic function of shelter, at the expense of every other aspect of their lives. Good luck sustaining a 70% consumption-by-GDP pyramid scheme of a Country, with that joke of a trade. It'll make the student loan debt look like avocado toast by comparison.
 
hindsight2020 said:
It's not a matter of being "scared". Back in 1980, prices were laughably cheap on an inflation adjusted basis. Residential real estate prices haven't been any higher in the history of this Country on an inflation adjusted basis than today.

To wit, the national median home price in 1980 was 250K inflation adjusted for 2023 dollars (64.6K in 1980 nominal). Conversely, 1980 median income was 81.7K adjusted. When I went into excel to compare the P/E housing affordability ratios between the 1980 critters and 2023, excel spit out 'lulz'. Per usual, born on third base and speak like they hit a triple.

I'd barefoot pedal my way on a rusty bicycle missing the seat to that closing, and sign a 15% interest rate with a smile today if we retained P/E parity with 1980. To add insult to injury, none of the usual suspects stayed at 15% rates for a fart and a half; everybody refi'd/traded out of those rates by 1983. By '86 they could refi below 10%, and by '89 the rates never went back up even today. Some hardship.

That's the difference. That's why young people are balking today. Thing is, the people who transacted real estate in the 1980s fully understand the distinction I highlight, they just don't like highlighting it, as it dilutes their myth of meritocracy.

BL, it's not about the rate, it's about the price relative to incomes.

Now everything needs to deflate, construction doesn't want to touch it because they're not in the "charity" or "social policy" business as they see it, so idle hands it is and the pricing problem persists. The equity owners don't want to let the govt give up the baby they feel entitled to, because "we were here first", and they vote. And the young, the tax base that needs to function in order for this little societal pyramid scheme to not collapse, are at the losing end of that proposition. Being asked to incur an outsized portion of their labor into the basic function of shelter, at the expense of every other aspect of their lives. Good luck sustaining a 70% consumption-by-GDP pyramid scheme of a Country, with that joke of a trade. It'll make the student loan debt look like avocado toast by comparison.
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Back in the 80's they actually still built sub 1500 square foot houses that you could afford. That hasn't happened in a long time. So the whole house price then vs price now isn't really comparable. More like a 20 pack of McNuggets now costs way more than a 6 pack did back then. I bought in the 2000's. Bought a 2bd/ 2ba house built in the 50's. Is it a cool house? Eff no. Was it above what I could afford? Eff no. Would someone today be caught dead buying it a a first house? Also eff no. It's not all on the generation before ours.
 
EdFred said:
Back in the 80's they actually still built sub 1500 square foot houses that you could afford. That hasn't happened in a long time. So the whole house price then vs price now isn't really comparable. More like a 20 pack of McNuggets now costs way more than a 6 pack did back then.
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I understand what you're pointing at, but it's a distinction without difference. I need housing now regardless, like they needed it then. Available stock is apples to apples, regardless of what form it's available in. You're pointing at the marginal utility of housing, and yes that is a comparison that doesn't have a parallel. But that's not what I'm highlighting though.

Additionally, median price as posted, was of the entire existing stock, not just new. So the prices do include resale of the old stock of "six pack" nuggets, which are part of today's resale market.
 
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