Mooney Market

[Ibra]

Even if interest rates are zero or negative nothing in economics go as fast as the exponential annual depreciation curve of a 2020 Mooney Acclaim Ultra, I would hold to one very tight for 40 years, after all we are doing it for love 

PS: not applicable for business usage, they use a straight line of accrued depreciation for 40years, books & records looks more appealing to the faint hearted !

[KLRDMD]

6 hours ago, Parker_Woodruff said:

When I purchased my M20K in 2011, it always seemed there were about 150 Mooneys for sale on Controller.  I get there are more user friendly or free options for listing one's aircraft...

For the most part of 2020, the number of Mooneys listed has hovered around 90.  Today? 61

What a thin market...

I keep an eye on the market. My next airplane could very well be a Mooney. It would be my 5th Mooney. Probably a J/K if I do. There are zero Mooney 201s or 205s, zero 231/252/262s and zero Missiles or Rockets listed for sale that I can find that I would buy right now. Jimmy has sold a couple of nice 231s and a Rocket and Missile in the last few months that I would have bought were I actively in the market for one at the time.

Edited January 12, 2021 by KLRDMD

[0TreeLemur]

6 hours ago, tmo said:

Which begs the question where is the massive inflation that would normally follow such overabundance of money hitting the wild... Not to rain on anyone's parade, but I've been wondering that for longer than I care to admit...

Me too.  Too much money chasing around too few assets is the definition of an inflationary environment.

[0TreeLemur]

2 hours ago, carusoam said:

Good news!  (In the US... the rest of the world may be on a slightly different track)

According to the economy... times are good.  
(The economy is separate from all the people, my heart goes out to the people affected by the pandemic...)

1) Parker’s observation is all interest rate dependent...

2) Keep your eyes on Federal Reserve Chairman J Powel 

3) https://en.wikipedia.org/wiki/Jerome_Powell

4) Interest rates are set to control two things...

• Unemployment
• Inflation

5) Covid has generated a lot of job loss... around the world...

6) Inflation hasn’t begun in earnest yet...

7) Stay healthy...

8) Stay employed...

9) Don’t over commit...

10) Get the loan needed, and pay it off over decades...

11) hoping inflation occurs mildly after you have all your loans...

12) Money IS cheap... compared to anything in our life time... (some countries have gone with negative interest rates... something to be avoided if able)

13) The 10year interest rate has gone above 1% this week... a tiny canary in a giant coal mine...

14) for comparison, ask any of your friends that have bought or refinanced a home lately...

15) car, home, plane Inventory is limited, and low...

16) Paying over asking price is the norm... when competition shows up...

17) competition can be one other buyer...

18) J. Powell was clear about his thoughts recently... they aren’t thinking about... thinking about raising the interest rate....

19) The interest rate in question is called the overnight federal funds rate... the cost for one bank to borrow money from the fed...   

20) your bank will then raise their rate to lend you money...

21) GM will easily loan money to their car customers for about 3% or so... for five or so years... no money down...

22) Cost of money is low, interest rate based savings accounts aren’t weaning anything... bonds start to become interesting, but only when interest rates come up off the floor...

23) Corporate earnings have a tendency to be outsized in this environment... so speculation tends to drive markets higher...

24) Watch for the party to peak...   if your teenage kids are telling you about the fractional ownership of stocks that they bought on RobinHood...  that may be a sign...   

25) Markets have a tendency to be strong for a really long time after economic weaknesses have come in...

26) Its all good... until it isn’t...

27) With all that covered... value is still the driving force... defining the underlying value of an individual airplane has a few methods...  

28) None are more important than the PPI... whether you do it yourself, or buy the PPI from an MSC... just know the value of what it is you are buying...

29) There aren’t a lot of Os for sale either...

30) A corollary to the interest rate adding to the expense of all things in life... is the cost of gasoline...

31) Gas prices fell pretty low this year, as the price of crude oil futures went through the floor earlier... the extra savings in gasoline is much like getting a tax cut...  yay!

32) There is lots of competition in the gasoline market...

• various countries competing on the supply side.
• horizontal drilling doing so well.
• Mike using his Tesla.  
• People cutting back on going in to work... (work from home)

31) Congrats for reading this far... what is the worst inflation rate you remember seeing, when was that?

32) what was the worst price of gasoline at the time?

33) Do you remember the cost of crude at about $150 bbl...?

PP thoughts only, not even an amateur finance guy...

Best regards,

-a-

 

I live in a world of bulleted lists.   A 33 point bulleted list is quite impressive!   Record? 

[0TreeLemur]

1 hour ago, KLRDMD said:

I keep an eye on the market. My next airplane could very well be a Mooney. It would be my 5th Mooney. Probably a J/K if I do. There are zero Mooney 201s or 205s, zero 231/252/262s and zero Missiles or Rockets listed for sale that I can find that I would buy right now. Jimmy has sold a couple of nice 231s and a Rocket and Missile in the last few months that I would have bought were I actively in the market for one at the time.

But Ken, I thought you were going to buy my C, which used to be your C, so that I could upgrade to a J!?!

-only half kidding

Fred

[irishpilot]

9 hours ago, hammdo said:

Same here in Texas... Very hard to fine one and the waits are long.. 

-Don 

I'm in a communal hangar at KSSF and have been waiting at several nearby airports for almost two years. No vacancies for T-Hangars. 

[KLRDMD]

2 hours ago, 0TreeLemur said:

But Ken, I thought you were going to buy my C, which used to be your C, so that I could upgrade to a J!?!

-only half kidding

I absolutely would buy your C, that was my C, that was a friend of mine's C before me.

[Hank]

Oops.

Edited January 12, 2021 by Hank

[Hank]

34 minutes ago, irishpilot said:

I'm in a communal hangar at KSSF and have been waiting at several nearby airports for almost two years. No vacancies for T-Hangars. 

I put my name on the hangar list as a student pilot in 2006; bought my Mooney in 2007 and leased a corner in a box hangar. Moved 600 miles to Alabama in 2014. Old airport called in 2018 to tell me I was #1 on the hangar list and they had one open--did I still want it? 

That's 12 years waiting . . . . .  

Here since 2014, I have subleased part of another box hangar at my third airport--the first one was wherever I could find a hangar; then I bought a house and it was an hour away, so I talked my way into airport #2 in early 2016, but it closed at the end of 2019. So I'm sharing part of a large box hangar at airport #3.

[Stephen]

18 hours ago, Ragsf15e said:

Interesting.  Nice airport in a nice place too.  I guess it makes sense, there are less airplanes and pilots in service than there were 25 years ago.  There’s probably vacancy somewhere.  

There definitely is an empty hangar in KHAE, I just swept it out last night. 

[cbarry]

In my opinion: The Positive Wealth Effect basically summarizes the “why.”  As people experience a rise in asset values, their confidence to either hold items (planes, boats, vacation homes, stocks, land...) or purchase said items also rises—thus causing a rise in Demand and decrease in Supply.  This will often lead to FOMO (fear of missing out) and we repeat, not the flaw in economics, but the flaw in human behavior—the boom and bust cycle....Maybe aircraft availability, specifically, has been exacerbated to some extent by the desire to continue to travel but travel privately—such as been experienced in RV sales.

Edited January 12, 2021 by cbarry

[ArtVandelay]

Homes, airplanes, to some extent boats...it’s a sellers market.

If you want to buy any of the above watch the Miami Vice TV show for pointers, you’ll need a briefcase full of cash, an expensive car and some nice clothes.

[aviatoreb]

15 hours ago, carusoam said:

Good news!  (In the US... the rest of the world may be on a slightly different track)

According to the economy... times are good.  
(The economy is separate from all the people, my heart goes out to the people affected by the pandemic...)

1) Parker’s observation is all interest rate dependent...

2) Keep your eyes on Federal Reserve Chairman J Powel 

3) https://en.wikipedia.org/wiki/Jerome_Powell

4) Interest rates are set to control two things...

• Unemployment
• Inflation

5) Covid has generated a lot of job loss... around the world...

6) Inflation hasn’t begun in earnest yet...

7) Stay healthy...

8) Stay employed...

9) Don’t over commit...

10) Get the loan needed, and pay it off over decades...

11) hoping inflation occurs mildly after you have all your loans...

12) Money IS cheap... compared to anything in our life time... (some countries have gone with negative interest rates... something to be avoided if able)

13) The 10year interest rate has gone above 1% this week... a tiny canary in a giant coal mine...

14) for comparison, ask any of your friends that have bought or refinanced a home lately...

15) car, home, plane Inventory is limited, and low...

16) Paying over asking price is the norm... when competition shows up...

17) competition can be one other buyer...

18) J. Powell was clear about his thoughts recently... they aren’t thinking about... thinking about raising the interest rate....

19) The interest rate in question is called the overnight federal funds rate... the cost for one bank to borrow money from the fed...   

20) your bank will then raise their rate to lend you money...

21) GM will easily loan money to their car customers for about 3% or so... for five or so years... no money down...

22) Cost of money is low, interest rate based savings accounts aren’t weaning anything... bonds start to become interesting, but only when interest rates come up off the floor...

23) Corporate earnings have a tendency to be outsized in this environment... so speculation tends to drive markets higher...

24) Watch for the party to peak...   if your teenage kids are telling you about the fractional ownership of stocks that they bought on RobinHood...  that may be a sign...   

25) Markets have a tendency to be strong for a really long time after economic weaknesses have come in...

26) Its all good... until it isn’t...

27) With all that covered... value is still the driving force... defining the underlying value of an individual airplane has a few methods...  

28) None are more important than the PPI... whether you do it yourself, or buy the PPI from an MSC... just know the value of what it is you are buying...

29) There aren’t a lot of Os for sale either...

30) A corollary to the interest rate adding to the expense of all things in life... is the cost of gasoline...

31) Gas prices fell pretty low this year, as the price of crude oil futures went through the floor earlier... the extra savings in gasoline is much like getting a tax cut...  yay!

32) There is lots of competition in the gasoline market...

• various countries competing on the supply side.
• horizontal drilling doing so well.
• Mike using his Tesla.  
• People cutting back on going in to work... (work from home)

31) Congrats for reading this far... what is the worst inflation rate you remember seeing, when was that?

32) what was the worst price of gasoline at the time?

33) Do you remember the cost of crude at about $150 bbl...?

PP thoughts only, not even an amateur finance guy...

Best regards,

-a-

 

Wow Anthony - that's a big list even for you!

[steingar]

Ppffft.  It took 17 years for me to get a hangar at my current drome. Only reason I got one is they built new.  The only consolation is I was at the top of the still breathing list. We had one heck of a long wait list.

[Mooneymite]

8 minutes ago, steingar said:

Ppffft.  It took 17 years for me to get a hangar at my current drome. Only reason I got one is they built new.  The only consolation is I was at the top of the still breathing list. We had one heck of a long wait list.

I hear versions of this same story over and over again.  I wonder why more hangars aren't built by investors since there seems to be no limit to what aircraft owners are willing to pay.  I own my hangar at a fly-in community and can vouch for the fact that hangars are expensive, but still.....

I see where new hangars are finally planned at JYO where my brother flies.  Hangars there were virtually unobtainable for years.

[steingar]

Just now, Mooneymite said:

I hear versions of this same story over and over again.  I wonder why more hangars aren't built by investors since there seems to be no limit to what aircraft owners are willing to pay.  I own my hangar at a fly-in community and can vouch for the fact that hangars are expensive, but still.....

I see where new hangars are finally planned at JYO where my brother flies.  Hangars there were virtually unobtainable for years.

That's an easy one.  Hangars are insanely expensive to build.

[0TreeLemur]

1 minute ago, steingar said:

That's an easy one.  Hangars are insanely expensive to build.

Yes- insurance requirements related to fire protection in new hangars are one example.  Risk aversion by towns and airport boards creates requirements that raise prices to infeasible levels.  The cost to build a what is essentially a shed becomes financially unappealing.

A second point- many hangars house aircraft that haven't flown in years.   There are three such spots in the hangar I'm in.  That's 25% of the inventory.  This suggests that there is not a hangar shortage.

[AerostarDriver]

Circling back, as someone who has spent the last two years trying to buy and moving to purchase a Mooney. The reason their is so few on the market right now is because they are not sticking around on the market. Trying to get an airplane tied down long enough to get a prebuy done was impossible. I would call someone up, tell them I wanted to do a prebuy, they would say ok, I would get that ball rolling and they would call back a day or two later and say they had a cash offer for asking price and someone who was not willing to tie up the sale with a prebuy.

In the last two years (late 2018-early 2020) I was interested in 27 airplanes, attempted to do prebuys on 21 of them, finished prebuys on 3 of them to come to the one I ended up buying.

 

I have many harsh words on hangers, being in the ATL area, no one has hangers but lots of people have hangers filled with non-airplane items. It is infuriating to visit an airport and see an alarming number of the hangers being used as motorcycle storage or rv storage. The local airport managers/airport authorities have no desire it seems to resolve this problem while telling me their is wait lists that will take decades to get through. The last airport I called to be put on a wait list said that I was entry 1028 in the list. I asked if they had ever called someone from the list and they said, a hanger has never been available. 

[Mooneymite]

39 minutes ago, steingar said:

That's an easy one.  Hangars are insanely expensive to build.

...and hangar rents are insanely expensive.  Building/owning one's own hangar can make sense if the airport is cooperative.  If airport regulations mandating certain features can be avoided, the costs are in line with any other construction.  There is no "hangar penalty"; it's just a building.

[GeeBee]

The problem with investing in hangars is airport ground leases. Generally, after 30 years, your "investment" reverts to the airport authority. Also some jurisdictions reassess your lease every 5 years and worse some do it not on the current land use but on "highest and best" which means, "if we wiped out the airport, how much could we get for this land". That kind of reassessment and lease stipulations make it hard to pencil out a pro-forma on a hangar. I am looking at building some T-hangars right now at a new airport being developed and I am "attempting" to guide the municipal powers to be into something that makes sense. It is difficult to get non aviation oriented elected officials to understand the values in play. One big stick we have here is the "personal property ad valorem tax" which taxes the value of your airplane at the same rate as a home. When I point out the value of these airplanes and that they will contribute to the property tax system with no children to educate, little in police and fire services just pave the roads and runway their eyes light up!

 

[MooneyMitch]

Ok, I’m wrong!

 According to what I just read (if one dares to believe what one reads) over on General Aviation News, per the International Aircraft Dealers Association, aircraft sales have surged in 2020.

Let the good times roll and let the underwriters rejoice........ they’ve tested the waters making drastic upward premium adjustments and we’re all ok with it!  Yippee doddle!  

As others have stated, there are a plethora of pent up dollars waiting to be spent and insurance rates are not an issue.  

[Parker_Woodruff]

1 hour ago, Mooneymite said:

I hear versions of this same story over and over again.  I wonder why more hangars aren't built by investors since there seems to be no limit to what aircraft owners are willing to pay.

Property taxes take out a huge margin, that's for sure.  And municipalities can move at the glacial speeds.

[MooneyMitch]

5 minutes ago, Parker_Woodruff said:

Property taxes take out a huge margin, that's for sure.  And municipalities can move at the glacial speeds.

At SMX, each tenant pays property tax for our individual rented hangar.  

[Parker_Woodruff]

Just now, MooneyMitch said:

At SMX, each tenant pays property tax for our individual rented hangar.  

who owns the hangar?  Municipality or are you renting from a private owner?

[MooneyMitch]

3 minutes ago, Parker_Woodruff said:

who owns the hangar?  Municipality or are you renting from a private owner?

Good question Parker, and I should have clarified that.

We are an airport district. Hangars owned by district. Obviously they believe the tenants should pay property taxes.  That’s fine really as those costs would be passed along to us regardless.

I’m not complaining, my hangar rate is $239 month to month.  My annual tax is around $109. Extremely reasonable in the scheme of things.