Twin Comanche partnership or sale.

[Ted]

What does it have in the panel? There is a point in the pricing where it is more cost effective to part the plane out and remove it from the fly able market. Eventually the lowball mindset will have cut its own throat and all that will be on the market is newer planes at several hundred thousand dollars, or rags that people are willing to take bottom dollar for. Luckily there will be a sufficient supply of good parts from good planes so people can spend twice as much putting the rags back together for than they could have bought the good plane for to begin with. The lack of critical thinking ability does not just show itself in the political arena.

Not really a lack of critical thinking, more that it's markets at work. This applies to all sorts of things - planes, cars, houses. In few cases can you put improvements in and get all of your maintenance cost out of it. If you do all your own work and pick properly, you can. Most people don't, and assume that end value = start value + maintenance + improvements. That is simply not true.

In the big Twin Cessna world (340s, 414s, and 421s) you do see a vast difference in cost between low end and high end, and that has all to do with the important things - avionics, P&I, engines, other work, etc. However, it's still not a 100% return on investment, and it only works because the planes are worth enough to start. Your 310 (or even the one I fly) are old and worthless enough that improvements will never pay for themselves. You only do it because you want to get the enjoyment out of them.

Few people truly understand how these markets work, especially the owner pilot who views his or her plane as a prized possession with sentimental value rather than an asset.

 

[Henning]

Markets are nothing except the result of human thinking, and human thinking implodes markets on a regular basis. Due to a lack of critical thinking. Planes, houses, and whatever don't determine their own pricing, they are determined by people, each trying to further their self interest. It's when people focus on the small picture rather than the big picture that markets implode. This is just such a common foolishness within our culture that we have come to accept it as a norm.

 

[EdFred]

Your view is skewed because right now you're more of a seller than a buyer, and you can't get a quarter mil for a 60 year old plane. Fact is, there isn't the extra money there was for most people a few years ago. The demand has dropped. But yet you want the prices to stay the same. You can't push anything with a rope.

 

[Henning]

Your view is skewed because right now you're more of a seller than a buyer, and you can't get a quarter mil for a 60 year old plane.

Heck, when I asked $80k for it I was being told it was worth $40k, not a chance in hell I'll take $40k.

 

[EdFred]

If that's all anyone will ever pay for it, that's all it's really worth.

 

[Henning]

If that's all anyone will ever pay for it, that's all it's really worth.

No, that's a fallacy as I can sell it to a dozen people in parts and pieces for more than a single individual will give, or I can just keep it, then it's worth what I have in it.

 

[EdFred]

No, that's a fallacy as I can sell it to a dozen people in parts and pieces for more than a single individual will give, or I can just keep it, then it's worth what I have in it.

Sometime whole isn't more than the sum of it's parts. Buyers always establish value and prices in non-commodity items.

 

[flyin'gator]

This is a very interesting thread - assuming that there are multiple types of buyers and sellers looking at these emotionally charged objects in different lights- is there a bid percentage under asking price which is considered reasonable? Buyer and seller psychology aside, coupled with the general lack of highly guarded sales/comps information - how is a perspective buyer who is serious yet not willing to pay "asking" price to know what is a reasonable offer vs. an insulting one. Henning - you have a beautiful and obviously highly maintained aircraft. That being said, substantially "newer" 310s are out there in various states of excellence (or lack thereof) for a good deal less. It would be easy to say "well, you know what you are getting with mine" etc. But outside of our insular online aviation geek world- how would joe plane buyer really be able to discern the extra value your skills/knowledge/ maintenance regimen brings to the table. In the end, although many of us spend a good part of our disposable income on aviation, making the selling/buying of these toys very emotionally charged, isn't a 55 year old aircraft subject to at least similar market dynamics as say a used car? For the record if I was in the market for a 310 I would attempt to come to a meeting of the minds for Henning's bird without hesitation, but I happen to value the "electronically known" buyer dynamic.


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[Henning]

Sometime whole isn't more than the sum of it's parts. Buyers always establish value and prices in non-commodity items.

Buyers only establish what they are willing to pay, sellers establish what they are willing to accept. I notice you haven't sold your plane yet, so obviously you have established a value higher than someone is willing to offer.

 

[Henning]

This is a very interesting thread - assuming that there are multiple types of buyers and sellers looking at these emotionally charged objects in different lights- is there a bid percentage under asking price which is considered reasonable? Buyer and seller psychology aside, coupled with the general lack of highly guarded sales/comps information - how is a perspective buyer who is serious yet not willing to pay "asking" price to know what is a reasonable offer vs. an insulting one. Henning - you have a beautiful and obviously highly maintained aircraft. That being said, substantially "newer" 310s are out there in various states of excellence (or lack thereof) for a good deal less. It would be easy to say "well, you know what you are getting with mine" etc. But outside of our insular online aviation geek world- how would joe plane buyer really be able to discern the extra value your skills/knowledge/ maintenance regimen brings to the table. In the end, although many of us spend a good part of our disposable income on aviation, making the selling/buying of these toys very emotionally charged, isn't a 55 year old aircraft subject to at least similar market dynamics as say a used car? For the record if I was in the market for a 310 I would attempt to come to a meeting of the minds for Henning's bird without hesitation, but I happen to value the "electronically known" buyer dynamic.


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Hmm, what does a 72 Cutlass or 69 Camaro in top condition sell for these days? If Joe Buyer hasn't educated himself on the value of condition in regards to cost of operation, well, he'll get an education on shortly, and it will be inverse in cost to the money saved at purchase with a multiplier attached.

NAAA Evaluator has my plane priced out over $100k

 

[EdFred]

Buyers only establish what they are willing to pay, sellers establish what they are willing to accept. I notice you haven't sold your plane yet, so obviously you have established a value higher than someone is willing to offer.

Yep that's its value is to me, not the market's.

 

[Henning]

Yep that's its value is to me, not the market's.

You are half of the market. It requires sellers and buyers to make a market. If a buyer can't buy what he wants, there is no market.

 

[EdFred]

And if a seller won't come down to what someone is willing to pay, there isn't one either.

 

[flyin'gator]

Henning, I'm not sure the classic car analogy applies here. That is a market with literally millions of qualified possible participants and is typically not a utilitarian purchase. In the aviation world an airplane analogous to that might be a beech 18 or T6, I think most purchasers would put your bird in a utilitarian category- as in something expected to be used as a traveling machine vs. A classic car in a collection - some might make a 68 Camaro a daily driver but prob. Not most.


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[Henning]

And if a seller won't come down to what someone is willing to pay, there isn't one either.

Exactly my point.

 

[JoseCuervo]

And if a seller won't come down to what someone is willing to pay, there isn't one either.

Difference is Buyers have a bit more options. A Buyer can likely find substitute products that will deliver the same utility. Especially with items like generic Piper/Cessna/Beech airplanes.

Sellers have more difficulty finding substitute markets for selling airplanes. Only "options" end up being scrapping or donating type of transactions.

So, there can still be a market price and a market, just that the Buyers are going a bit sideways to alternate products, while the outlying Seller isn't actually participating in the market, the market is still there.

 

[Henning]

Difference is Buyers have a bit more options. A Buyer can likely find substitute products that will deliver the same utility. Especially with items like generic Piper/Cessna/Beech airplanes.

Sellers have more difficulty finding substitute markets for selling airplanes. Only "options" end up being scrapping or donating type of transactions.

So, there can still be a market price and a market, just that the Buyers are going a bit sideways to alternate products, while the outlying Seller isn't actually participating in the market, the market is still there.

Well, the buyers can move sideways into crap that will cost more in the long run, or new planes that cost more now. Eventually the market will run out of crap because it will get upgraded or scrapped because it would cost too much to get it into annual.

 

[JoseCuervo]

Well, the buyers can move sideways into crap that will cost more in the long run, or new planes that cost more now. Eventually the market will run out of crap because it will get upgraded or scrapped because it would cost too much to get it into annual.

Pretty much proves that there is excess supply, at current times, and only after the "crap" gets upgraded or scrapped does the market swing back into equilibrium.

Until then, there is downward pressure on pricing, if I remember my Econ-102 class correctly (a ****ton of years later.)

 

[Henning]

Pretty much proves that there is excess supply, at current times, and only after the "crap" gets upgraded or scrapped does the market swing back into equilibrium.

Until then, there is downward pressure on pricing, if I remember my Econ-102 class correctly (a ****ton of years later.)

Right, and people with good planes aren't selling.

 

[JoseCuervo]

Right, and people with good planes aren't selling.

Limiting the Market and causing less available supply. Is it enough to move prices upward? Likely depends on all the sellers of "crap" out there.

Always difficult to manipulate the market as a single seller in a commodity market. (Assumes aircraft are "commodity" -like in utility and value).

 

[Henning]

Limiting the Market and causing less available supply. Is it enough to move prices upward? Likely depends on all the sellers of "crap" out there.

Always difficult to manipulate the market as a single seller in a commodity market. (Assumes aircraft are "commodity" -like in utility and value).

No of itself, it requires time as well. The available supply at the low low prices is crap, the buyers of the crap will be required to invest money into their crap to keep it flyable, or sell at salvage price. Now these planes will be off the low low price flying market as well as these people don't want to lose every dime they spent fixing up a plane.

 

[Banjo33]

Fwiw, I love your plane Ed. Unfortunately it's more than I can currently afford.

 

[Ted]

Fwiw, I love your plane Ed. Unfortunately it's more than I can currently afford.

And right there we have the reason why the market is where it is, because you aren't the only one.

 

[charheep]

Stories like this seem to fit here. Prices are too high, killing potential pilots and existing pilots ambitions.

http://www.washingtonpost.com/busin...22cadc-8f5c-11e3-b46a-5a3d0d2130da_story.html