I’m calling the peak

In Indianapolis, travel trailer prices appear to be down. Dealers are definitely negotiating more.
 
In hindsight, OP's original post was correct, if perhaps off by 2 months on timing. In real estate, news of impending interest rate hikes caused a spike in prices through May. In June, market activity drove off a cliff. In the market I am watching most closely, virtually everything listed since June is still unsold, despite numerous price cuts. Airplanes don't have the minute data availability of real estate transactions, so trends take longer to recognize. But I'll bet a year or two from now, price history of aircraft will show a sharp peak in early summer of 2022, and an ongoing drop thru at least next year.
 
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*Roman General voice*
...Sellers should know when they're conquered.....
:D
 
Supereri said:
I bought at the end of July, so I think you can safely call that the peak.
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In the long run, overpaying on purchase won't really make a big difference in total cost of ownership. I have easily spent more on maintenance and upgrades than it cost me to buy the plane. And upgrades will net you at best 50 cents on the dollar for market value.
 
I've been watching a couple real estate markets for a year or so. About six months ago, the price decreases started. Last week, the 1st foreclosure.
 
I sold a home 45 days ago that six months ago would have had competitive bidding over ask, if I had done it prior. It was in the Neighborhood everyone wanted. With interest rates moving I had one looker in 30 days that resulted in a full price offer and close…they had a 60 day lock on money so it still worked. Similar houses still on the market are now priced 10-15 % less and no one is looking or buying.
 
Warlock said:
I sold a home 45 days ago that six months ago would have had competitive bidding over ask, if I had done it prior. It was in the Neighborhood everyone wanted. With interest rates moving I had one looker in 30 days that resulted in a full price offer and close…they had a 60 day lock on money so it still worked. Similar houses still on the market are now priced 10-15 % less and no one is looking or buying.
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You got the last seat in the last lifeboat off the Titanic.

I'm sitting on cash, waiting for the right time to buy a 2nd home. Thinking by next summer people will be jumping overboard.
 
Liquidity is low, both inventory and buyers are scarce. People can't afford to sell because their new home's mortgage at the new rates would be double what they currently pay - would be at an amount they couldn't pay let alone be qualified for a loan.


People like Ed above who find themselves sitting on cash are the king of the hill now. My IRA's were all mutual funds - risk spread across the market - but that didn't work out this year.

As far as peak - I think I'm seeing more of flat plateau. Prices seem to not be rising for a while, but not dropping.
 
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We’re sitting on a ton of cash, but not willing to put it into distressed’ asset that is still at an inflated price.

I’m afraid that’s going to be what we see over the next couple of years if sellers decide to give it back to the bank instead of taking a bath on the sell and still owing a large balance.
 
WDD said:
As far as peak - I think I'm seeing more of flat plateau. Prices seem to not be rising for a while, but not dropping.
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That is the normal pattern, at least in real estate. Saw the same thing in 2008. Nobody wants to sell at a loss, so they sit on the asset and try to ride it out. Eventually liquidity and life events force the issue. Takes a year or two for inventory to build up and people to get desperate.

One exception would be flippers. That is a game of musical chairs. If you are overextended when the music stops, you really only have one choice: get out fast at a loss. Saw some drastic price cuts in my target market last month. $100K price reduction on a $600K house gets your attention quick on Zillow. You know right away it is a flipper when the interior pictures show brand new flooring, appliances, counters, and light fixtures.

Airplanes are different, of course. Less efficient market and way less data available, so I would expect trends to be less obvious except in retrospect.
 
The cuts I've seen to real estate in my area ('burbs of Chicago) have varied.

If you're in the middle affordability range (400-600) then they've seen 5-10% cuts. But if you look at the homes that are $700k+, I've noticed its often 10%+, sometimes even 20% reductions. Part of me suspects that is because buyers had stretch pricing to begin with, but I think the majority is simply that there's hardly anyone bidding now. What used to be a $3k P&I is now a $6.5k P&I bill. The fact that many cuts are coming almost immediately after a home is listed tells me that the realtor's phone isn't ringing at all, which worries people.

In fact, the folks down the street just sold their house. I drive by the house everyday on my way out of the neighborhood and noticed it was taking forever to sell it compared to recent history when it'd sell in a weekend (and it's a beautiful place). When I saw their repeated price reductions I almost vomited (below: 20%). I now look at my own home price and just mentally factor in a 15% reduction from whatever Zillow suggests. I know this observation is just anecdotal evidence, but I've seen more and more of these cases pop up around me over the last 6 months. Over the next year or so I expect those anecdotal cases to aggregate up into a noticeable trend that gets front page coverage.

I'm guessing aircraft owners are generally more well capitalized than the rest of the country (just a guess, no data to back it up). It might take longer for that to hit, but it eventually will.

upload_2022-11-8_11-45-51.png
 
Zillow couldn’t get their pricing algorithm close enough for them to use it profitably for their in-house business. If you look at a Zestimate(tm) and think it’s representative of fair market value, you’re out of your mind.

Pricing is inly half the housing market problem, cost of money is the other half. Some lenders are forecasting mortgage rates to break double digits, while others are starting to price in ‘rate drop protection’ to lower your rate if it drops in the next 3 years.

What’s that chinese proverb about interesting times?
 
I call it the HELOC factor. I have seen the rise and fall of airplanes and other non-essential items following the easily available $ of home equity loans or refinancing. People using their homes as ATM machines to buy whatever they want. This borrowed money is used to "overpay" for purchases because there is no lender appraisal needed for a loan on the item. So even if people aren't intending to sell their homes, their equity is dropping. I can make the point that every time a homeowner refinances their home for a larger $ amount, they sold their home back to themselves at a higher price. No equity means no more easy cash withdrawals from their home. This phenomenon is recognized in Texas. In Texas, Cash-Out loans on the primary homestead are severely restricted and regulated.
 
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TCABM said:
Zillow couldn’t get their pricing algorithm close enough for them to use it profitably for their in-house business. If you look at a Zestimate(tm) and think it’s representative of fair market value, you’re out of your mind.
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Estimating market value is quite a different problem from successfully running a hands-on home flipping business. The former is much simpler problem requiring less subjective and moving inputs than the latter. Flipping requires estimating many things correctly, and then executing the flip on schedule.

In Zillow's case their algorithm for estimating home-flipping profit absolutely sucked because they totally underestimated the cost and availability of materials+labor for doing the flip, a fact they weren't shy about in their post mortem when they killed the unit. That was in no small part because their algorithm didn't factor in that the sellers incentivized to take a slightly lower iBuy offer from Zillow were the very same people who will give you a sweet deal on their car, so long as you don't take it for a test drive first. It turns out adverse selection is a thing.

I'm certainly not going to stake my life on a Zillow Estimate, but I think it's at least as accurate as your local, brainless, non-data-driven realtor who will pull a number out of their ass and see if it sticks.
 
Tom Wells said:
… but I think it's at least as accurate as your local, brainless, non-data-driven realtor who will pull a number out of their *** and see if it sticks.
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I don’t disagree. You could also apply that statement to the local tax appraisers that have zero clue of fair market value at a granular level since most of their tools use a peanut butter spread approach.
 
TCABM said:
I don’t disagree. You could also apply that statement to the local tax appraisers that have zero clue of fair market value at a granular level since most of their tools use a peanut butter spread approach.
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Local tax appraisers aren't setting your tax values at fair market value, they are setting it so they can make the revenue they need to deliver.
 
bflynn said:
Local tax appraisers aren't setting your tax values at fair market value, they are setting it so they can make the revenue they need to deliver.
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Exactly, which makes my point.
 
TCABM said:
Exactly, which makes my point.
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not quite. You said they have zero knowledge. That is different than not using. They don’t consider market value and they don’t intend to.
 
bflynn said:
not quite. You said they have zero knowledge. That is different than not using. They don’t consider market value and they don’t intend to.
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What I said was zero knowledge at a granular level.

There are three common methods for residential property appraisals; sales approach, income approach, and cost approach. Each approach takes gross data and applies gross appraisals.
 
Ok, ok, but what I really want to know is when will prices for Ford F-150's (specifically, 2018-19 supercrew with the 3.5L turbo) come back down to a reasonable level? My 2000 F150 had a really hard time with our last trip to the mountains.
 
For those of you who've bought and sold multiple planes, how many buyers are paying cash vs financing spam cans? I honestly don't know what people do, but I'd personally have a hard time borrowing for a toy.

If the ratio leans more towards cash buyers, plane prices will take awhile to come down because with the market as it is people like myself and others in this thread are sitting on cash, therefore the loan rates don't matter to us. Although, it's a bit more financially feasible to just sit on cash now than it was a year ago with banks paying .01%
 
I came across this. Carvana stock down from $350 in Aug 21 to $7 today. Maybe says something about used car prices?

upload_2022-11-9_6-7-41.png
 
I believe Carvana's business model was to buy high and sell low, and make up the profits on volume...

I saw some of the offers for cars from them, I didnt know how they would ever turn around and sell that car for any kind of profit.
 
They lost the ability to legally sell in Michigan because they couldn’t deliver titles to people who bought cars from them.
 
WDD said:
They lost the ability to legally sell in Michigan because they couldn’t deliver titles to people who bought cars from them.
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And Illinois
And North Carolina
And being investigated in Texas

All for the same thing.
 
Morgan3820 said:
Ok, ok, but what I really want to know is when will prices for Ford F-150's (specifically, 2018-19 supercrew with the 3.5L turbo) come back down to a reasonable level? My 2000 F150 had a really hard time with our last trip to the mountains.
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If what you consider reasonable is a little more than what four year old trucks went for before the pandemic, then never. A quick perusal of Auto Trader makes me think that prices are drifting downward now, and should look a little better in January - February, but I wouldn't expect any big declines for a few more years, and that's not guaranteed.

How long are you going to keep this truck? Personally I dislike shopping for used cars and have always kept my automotive budget reasonable by buying new and keeping them for 10 or more years. I did buy each of my daughters a late model used car, but that was when there was more depreciation on late model cars. I did a similar search for new 2022 F150s and it appears dealers are starting to discount them.
 
FormerHangie said:
If what you consider reasonable is a little more than what four year old trucks went for before the pandemic, then never...
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I’m of a similar mind. Essentially 2020-2022 model years are pariahs going forward, maybe 2023 model years as well. Hopefully depreciation hits of 25-40% within the first 24 months of ownership come back in style by early 2025, but that’s still not going to get you back to 2019.

I think I shared it here before, but the manufacturers and the dealers seem to have ‘learned’ the impact limited supply has on the market. I don’t think loss leaders and volume selling is going to come back in style for a long while.
 
FormerHangie said:
If what you consider reasonable is a little more than what four year old trucks went for before the pandemic, then never. A quick perusal of Auto Trader makes me think that prices are drifting downward now, and should look a little better in January - February, but I wouldn't expect any big declines for a few more years, and that's not guaranteed.

How long are you going to keep this truck? Personally I dislike shopping for used cars and have always kept my automotive budget reasonable by buying new and keeping them for 10 or more years. I did buy each of my daughters a late model used car, but that was when there was more depreciation on late model cars. I did a similar search for new 2022 F150s and it appears dealers are starting to discount them.
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This will be my last truck, baring an accident. My current truck is 22 years old which I averaged about 4k miles/year. I could afford it but I don’t want a new truck. I feel that quality control post pandemic is not good.
 
I'm still shaking my head on how US automobile industry has changed. Used to have the Big 3, now Medium 2.

Used to be a car nation, and now domestic manufacturers basically don't make cars, just trucks and SUVs. And I'm shocked by what a truck costs, and perhaps even more surprised that some people pay that amount. Reminds me of when they used to make expensive cars, but were replaced by better and less expensive imports that took over that market. At same time the "Big 3" shrank. Of course, that would never happen in the truck market................


So.... when am I going to be able to buy a low engine time 182 that doesn't need paint and doesn't look like a bear slept in it over the winter for $100k or less? (yeah, I know - never)
 
I've mentioned on this thread I've been watching a couple real estate markets. For a long while I was seeing people flip houses in less than a year making a 20-30% profit. Now I'm seeing stuff like this. Dude lost 600K in 9 months. I know this sounds crass, but I'm looking for more of this to pounce.
 
Where do you see what he lost?
 
WDD said:
Where do you see what he lost?
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Price History:
02/18/2022 Sold $2,610,000 $460 Public Record
11/09/2022 Sold $2,020,000 $355 CanopyMLS
 
kaiser said:
What I read is that airplanes are good investments...
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lol. I posted on FB last week after my Destin trip. I have two interested partners in a 182 in Charlotte in ~1 year hoping the airplane market softens like housing apparently is.
 
Mahneuvers said:
lol. I posted on FB last week after my Destin trip. I have two interested partners in a 182 in Charlotte in ~1 year hoping the airplane market softens like housing.
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The winning formula is say... bought in 2018, add a partner in 2020 for 2018 cost, add a partner now for profit.. wait 5 years, buy both back out for pennies on the dollar.


... hmm I might be on to something...
 
Mahneuvers said:
Price History:
02/18/2022 Sold $2,610,000 $460 Public Record
11/09/2022 Sold $2,020,000 $355 CanopyMLS
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That’s not a loss, that’s market adjustment. When it sells for $600k below what it was purchased for, that’s a loss.
 
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