Buyers and Sellers of RVs, both complaining

[BCP Boys]

So I thought I would put this out because it would be fun to hear other's perspective. Before you completely thrash my post please keep in mind I'm only an observer and don't benefit in any way, so here it goes.

A few of my friends who know I've owned a few RVs, amongst several other airplanes, and also know that I'm always "looking at the market" called me for advice on selling / buying an RV. I'm sure many of you watch the market as I do, and have your own thoughts but I thought I would share my experience.

It started right after this year's Oshkosh... at least 5 friends who are either looking to buy an RV or are looking to sell their RV, have called me to ask for my advice on RV pricing (I'm humbled they think so highly of me). Obviously I've tried to help connect some of them that want to buy with those that want to sell but none of the deals worked out. Here is where I noticed that there seems to be a disconnect in the market that didn't exist before Covid times. Prior to Covid and before the supply chain issues that came along with Covid, the RV pricing was pretty straight forward. It was pretty easy to look at build quality, paint, engine size, engine time, prop, avionics and pretty much come up with a fair price that the seller would be happy with, and the buyer would also be happy paying. Then the craziness of 2021/22 happened and prices went through the roof, for everything. But supply chain started to get better and continues to ease off (although not "normal") and some prices for many but not all things started to go back down. Well, here we are late 2023 and it seems like the buyers and sellers couldn't be further apart. I've seen asking prices that are 2X higher than what they were before covid and even 50% higher than what they were last year, but here is the kicker... they aren't selling so the inventory is starting to build up. Then on the opposite side, I see and have heard from friends that are buyers, who believe that prices must go back to pre-covid (which I don't agree with) and are looking for the "deals", which aren't out there.

This isn't rocket science so we don't even need Paul Dye's wisdom (just trying to be funny, Mr. Dye you are welcome to provide your wisdom). But if we can just get the sellers to be a bit logical in the asking price and stop asking $200K+ for an RV that was selling for $90K -$110K pre-Covid and buyers that would step up and maybe pay $120-150K for the same RV that sold for $90K to $110K pre-covid, then maybe we would see some of these folks on both sides be happier. If you look at the market, it's obvious that RVs that are selling quickly are priced fairly for today's market. Keep in mind that last year when RVs were selling at their highest premium, was mainly because money was cheap. A buyer could borrow money for almost nothing and pay it over a long period of time. I'm sure we know that's not the case anymore. I have no dog in this fight, but I would love to see some of these planes that have been for sell for 1 to 6 months, go to new owners so they can be excited about their new RV and add some new RV Grins around the country.

This is just a post to get the folks that are looking to sell and the ones looking to buy, to just think about being on the opposite side and put themselves in their shoes. I'm not sure if this will have any positive outcome whatsoever, but if I can just get one buyer and seller to come to terms, then this post was worth writing.

Happy selling & buying

God Bless

Amir

[MacCool]

I agree with your observations expressed above. I see it as just normal market supply and demand issues driven by the rapidly changing economy over the last few years. Currently, the sellers expectations are legging behind current and developing market realities as we continue to transition to an inflationary economy. It's going to get worse. The next several months are likely to be increasingly enlightening and uncomfortable for people who are trying to sell high high-end items like airplanes.

[PilotjohnS]

Just being devil's advocate, so hear me out.
So i should lower my price, because the interest rates are too high?

If i have to sell my plane, then i want the highest price for it. I would be willing to wait for a buyer with cash, who doesn't need to finance the purchase, then reduce the price. And if the plane wont sell in a reasonable time, then I will reduce the price.

I think what you are seeing, is a lot of planes are changing hands, but the real price is not disclosed. if i see a plane I like, I might step up and give the seller a $20K premium knowing that there is not a lot of inventory.

The true selling prices of these planes I would bet is never disclosed.

[MacCool]

Originally Posted by PilotjohnS

Just being devil's advocate, so hear me out.
So i should lower my price, because the interest rates are too high?

Not at all. You should ask for the amount you want to get. You'll sell it for the highest price you can get and your success (or lack thereof) will tell you whether or not your asking price is too high. OP is just predicting that you'll ultimately have to accept a lower selling price in the looming economy. A reasonable prediction IMHO.

[BruceW]

I am in land development and raw land purchases for subdivisions.
Lot of parallels with seller expectations in a declining market value.

Seems to take a long time for sellers to understand they cant get the same values as at the peak of the market. The mentality of 'I wont sell unless I can get my high price' only changes when situations change into 'have to sell', for whatever reason.

I expect RV prices to stabilize or decline a bit as the market settles down.
But it may take some time.

[Bavafa]

It is very true that the prices have gone crazy especially during COVID which I never understood why but some of that is also reflected by the building cost.* An engine that I bought for just about $40k pre COVID is about $62K now.* That applies to airframes, avionics*and just about anything else that goes into building a plane.
However, I agree with your notion that buyers and sellers need to find a more reasonable expectation that matches the realities of the market

[sailvi767]

My experience centers more on the charter boat market. I have found over 30 plus years that sellers who over price the market in the end net less than those who priced correctly or even under priced the market a bit. This is especially true in a declining market. Every day your product sits unsold the actual value is reducing while you pay extensive carrying costs most don’t account for. Another aspect not thought about often is the investment potential for the funds you receive in a sale. Holding out for a year to get the very highest price rarely nets you the most. A 200k aircraft a seller won’t budge on that should be 180k won’t net the seller more even if he gets 200k a year later after carrying costs and lost investment opportunities.

[Carl Froehlich]

But now overlay the cost in today’s market to build. For example, my slow build RV-10 kit (only final paint farmed out):
- $66K for the airframe
- $56K for the engine (ordered 2.5 years ago and I’m still waiting)
- $10K for the other FWF and electrical stuff
- $32K for the full IFR dual EFIS panel (and I build it)
- $3K for primer, interior paint and such
- $20K for final paint
- $8K for interior
- $5K for miscellaneous

Total: $200K (but we all know the end price will be higher)

Put this “everything first class but not crazy” example up against the price of any comparable spam can and I can easily see a $300K+ selling price.

The days of bolt on a used engine, a wooden prop and steam gauges to fly away under $80K ended a couple of decades ago.

Carl

[Sam Buchanan]

Originally Posted by Carl Froehlich

The days of bolt on a used engine, a wooden prop and steam gauges to fly away under $80K ended a couple of decades ago.

Carl

A couple of decades or so ago that RV-4 or -6 flew for $30,000! (Old timers remember the "$30,000 demo flight"...)

Just a nostalgic data point.

[thread moved to "General Discussion"]

[MacCool]

Originally Posted by Carl Froehlich

But now overlay the cost in today’s market to build. For example, my slow build RV-10 kit (only final paint farmed out):
- $66K for the airframe
- $56K for the engine (ordered 2.5 years ago and I’m still waiting)
- $10K for the other FWF and electrical stuff
- $32K for the full IFR dual EFIS panel (and I build it)
- $3K for primer, interior paint and such
- $20K for final paint
- $8K for interior
- $5K for miscellaneous

Total: $200K (but we all know the end price will be higher)

Put this “everything first class but not crazy” example up against the price of any comparable spam can and I can easily see a $300K+ selling price.

The days of bolt on a used engine, a wooden prop and steam gauges to fly away under $80K ended a couple of decades ago.

Carl

Valid point, but I'm confident that the decision as to whether to build an airplane or buy an already-flying one is not always a function of cost. I know many pilots in experimental aviation that have no interest in building an airplane no matter how much money they might save.