“Inside every old person is a young person wondering what happened. ”
Taking stock of inventory levels
Increasing inventory amid a backdrop of economic uncertainty is never welcome in the used aircraft sales arena, but this time around at least we're just witnessing the continuation of a predictable cycle. In fact, many buyers believe the market is making its long-awaited return to normal levels. International buyers, whose relatively strong currencies against the beaten-down dollar have given them an advantage, have at times effectively shut out a lot of would-be U.S. purchasers. The increase in inventory should provide enough choices to more than fulfill the demand from everyone.
One common cycle is triggered when sellers, who have heard of relatively high sales prices in a market, try-often too late-to capitalize on the apparent opportunities. They keep their asking prices high, and by doing so, encourage new market entrants to follow suit. After a while, all you have is a big inventory of overpriced aircraft, and little sells until the efficiencies of the market take hold. Serious sellers make price corrections and buyers step in. The others typically remove their offerings from the market or let them languish. While sellers set the asking prices, buyers' decisions ultimately determine the sale prices, and their collective voice always gets heard.
Nevertheless, some buyers will continue to shoot too low and some sellers will aim too high. As a result, inventory will most likely keep rising through the remainder of this year. Election-year uncertainty will aid the buildup. It is, however, difficult to view this as anything more than a cyclical pullback for many model types, as their recent increases in ask prices, and as well as some buy prices, have been nothing short of amazing.
With the pounding the financial sector has been through and the collateral damage that may ensue, coupled with runaway commodity prices, one would think the sky is falling- or about to. If that really is the case, then no one will need aircraft. However, Forbes recently published a special issue on the world's richest people-1,125 billionaires-and there also are probably more than a few multimillionaires who didn't quite make the cut, not to mention many companies that can afford to upgrade their jets no matter what the economic climate. With all that in mind, a worldwide inventory of 1,850 used business jets for sale doesn't seem big at all.
Bryan Comstock welcomes comments and suggestions at: email@example.com.