Mooney Prices Booming: Buy now or wait for the dip?

[awhedbee]

Hello Everyone,

   Current ppl student, soon to be Ifr student. I have become fascinated with Mooney's over the last year (speed, strength, and efficiency) and have been looking to make a purchase. It seems every day that the prices are going up drastically. Using sites like AOPA Vref I can see the last big boom like this for Mooney pricing was in 2001.

   My question to those who have been through aviation booms and busts, does the used plane market fall out all at once when the economy dips/sputters or is it more of a slow slide down the hill? (Is it worth trying to time a market wide dip, or does the Mooney market still go strong during down turns) Also typically, how long do the "hot" markets last where all the planes are just gobbled up super quick?

-Alexander

[201er]

2 minutes ago, awhedbee said:

Hello Everyone,

   Current ppl student, soon to be Ifr student. I have become fascinated with Mooney's over the last year (speed, strength, and efficiency) and have been looking to make a purchase. It seems every day that the prices are going up drastically. Using sites like AOPA Vref I can see the last big boom like this for Mooney pricing was in 2001.

   My question to those who have been through aviation booms and busts, does the used plane market fall out all at once when the economy dips/sputters or is it more of a slow slide down the hill? (Is it worth trying to time a market wide dip, or does the Mooney market still go strong during down turns) Also typically, how long do the "hot" markets last where all the planes are just gobbled up super quick?

-Alexander

Your bigger concern should be completing your training and becoming a safe/proficient pilot and not buying an airplane. Some 80% of student pilots never make it to private because of dropping out. Regardless of market, it’s probably not the time to buy.

[N9405V]

You’re asking questions better answered by tarot cards and a magic eight ball.


Sent from my iPhone using Tapatalk

[PT20J]

What if there is no dip? “Prediction is very difficult, especially about the future.” — Niels Bohr

[Austintatious]

If you can figure out what the market will be doing, please let us all know!

 

I have to agree with 201er.  I would not suggesting buying an aircraft before you even have your tickets.   It would be one thing to buy an aircraft for the explicit purpose of getting your tickets and then selling after that is done... and that wouldn't be a Mooney.  Buying a Mooney right now is getting a bit ahead of ones self.   Please, I mean this in the nicest way possible... it is the same as if a 15 year old who is taking drivers ED was shopping for a corvette.  Prioritize your learning... there is a heap of it.  Even after you get your tickets, fly fly fly and then when you know what you want to do in an airplane ( 100$ burgers, fun flying, sight seeing, traveling, barnstorming, aerobatics ECT) then pick one to suit your needs and your abilities/experience.

[carusoam]

Great question AWH…

Nothing has kept people from taking calculated risks better than waiting to get more data….

There is nothing like sitting on a giant stack of cash… fearing you are going to pay too much today…. Or looking back thinking you should have waited…

 

Trust me… when the dip comes… you will have a bunch of different questions….  Like how do I pay for this if a recession is here…. What if I lose my job…

What if I buy a plane… and then have to sell immediately… because something else unexpected came up…

How comfortable am I going to be buying a pre-flown Mooney…. Will the Mooney factory still be open after the economic collapse?

 

In real life, you have to make tough financial decisions…

Waiting will certainly keep you from making any bad decisions…

 

Somebody once said it is better to be lucky than good…

I sold my M20C in 2007… bough it’s replacement M20R in 2009….

Something strange occurred in between…. I got my IR in 2008…

 

Since buying a good plane can sometimes take up to a year to execute…. Start looking today.  Develop your list of needs and wants and what Mooney is best for you…

By the time you are ready to buy… maybe the finance gods will be running in your favor… or you could win the lottery….

Make a plan… review it often… update your plan over time…

Don’t rush…

You will want your plane prior to getting your Instrument Rating… best to train in the plane you own…

You are on the right track… continue to hone your skills and your plans…

Time goes by at Mooney speeds…

Go Mooney!

-a-

[Will.iam]

Besides the insurance rate for a brand new pilot with 0 complex airplane time is sobering, eye wateringly expensive. From the above quote about a corvette it would be more like a Ferrari than a corvette.  

[DCarlton]

I made a commitment to myself that I would finish my IFR rating before buying my Mooney.  And that's what I did.  Access to training aircraft was not a issue.  After buying I spent more time the first two years refurbishing and upgrading my airplane than flying.  Something to consider.  Now would I ever want to rent again?  No. 

Edited January 14, 2022 by DCarlton

[carusoam]

Solid logic…

Renting a plane is hard to make work…

Plane clubs are a great idea… if you can find one near by….

Partnerships can work well… if you can find a great partner…

 

If you have gone down the path of all of the alternatives… and none fit….

Use the Tina principle….  There Is No Alternative….

Enjoy the hunt…

-a-

[A64Pilot]

carusoam hit the nail on the head, when the dip comes, how do you pay for it?

All luxury items, boats, airplanes, beach houses etc get hit hard with a recession, because most can no longer afford to pay for them and HAVE to sell, supply and demand.

‘Those that do well buying in a recession have cash to purchase.

‘There will be a dip, inflation can only last so long and as it eases or ends, it’s a dip.

Timing it is the problem, will it be next month or 5 years from now, no Political leader wants a “correction” necessary as they are, they are the end of their reign, so they will kick the ball as far as the can.

My advice is finish training, and start accumulating cash to buy when the bottom drops out, cause it will, eventually

Edited January 14, 2022 by A64Pilot

[GeeBee]

First start from the fact that a personal airplane purchase makes no financial sense at all. It is all "sunk money". After that, everything is easy.

 

[kortopates]

Better to wait till at least after your private, and you are able to become more knowledgeable about what you’ll want.


Sent from my iPhone using Tapatalk

[BravoWhiskey]

I waited until after my Instrument ticket.  That way I felt more knowledgeable about the capabilities of what I was getting myself into.  

Regarding the current market, i have owned the plane for a year and received an offer to purchase in the mail and a phone call... so the current conditions for me are favorable.  And there's something satisfying about saying "she's not for sale"

[haymak3r]

12 hours ago, Will.iam said:

Besides the insurance rate for a brand new pilot with 0 complex airplane time is sobering, eye wateringly expensive. From the above quote about a corvette it would be more like a Ferrari than a corvette.  

This, so very much this.. As a student pilot whom bought a Mooney in October.. I can't agree more with everybody in this thread, but this right here stands out. There is literally one insurance company in the US that will insure a student with a retract plane. You don't want to know how much my insurance is.. With that said, I am super happy that this fell in my lap, and I transitioned to flying it over the 172. If you plan on flying a Mooney and nobody is going to change your mind, then be prepared to spend more than most for things. 

I also would like to add that transitioning over to the Mooney has been amazing. And I also have more time with my instructor critiquing things past just the 10 hours for the endorsement. YMMV, but this is my plane. I plan to fly it for years, and so why not get used to it now, rather than waiting. Plus my plane fell in my lap, and was really a no brainer to get it in my situation. If it hadn't, then I would still have been in the 172 to complete my training. And then would continue my search for the right Mooney.

I guess the TLDR is. I wouldn't neccessarily try to get a plane while still training unless you just simply can't pass up a great deal/situation. Wait until you get your license and costs will be quite a bit cheaper for you.

Good luck!

[steingar]

Aviation is highly cyclical.

[A64Pilot]

It’s not Mooney, or Aviation, it’s everything.

Bought our house a little over a year ago, supposedly it’s worth more than 20% more now. 
What’s driving the buying spree in my opinion is all the “free” money floating around, said house was purchased at 2% interest, and just got a car financed through USAA for 1.9% Yes I know GM and other manufacturers will give 0%, but that’s artificial as in the lose money in that, but make money in the sale, so it’s not a “real” interest rate.

Would I have financed that house or car if rates were 10 to 15%? Heck no, and I’m not alone either, with the ridiculously low interest rates people are lining up and overpaying, so the supply dries up, prices rise.

When the money supply tightens back up, prices will plummet, because many are overextending themselves and will have to sell.

Its sort of 08 again, but when will it be 08, this year or next?

[philiplane]

This bubble is a bit different. Previous ones were caused by borrowed money. But this time, many large purchases are being made in cash. First time home buyers are getting pushed out of the market by cash buyers. In my area, most real estate transactions are 100% cash, and the prices are $500k to $5M. CASH. Buyers with less than 20 percent down can't buy anything. I see the same with boats and planes too.

[Aerodon]

24 minutes ago, philiplane said:

This bubble is a bit different. Previous ones were caused by borrowed money. But this time, many large purchases are being made in cash. First time home buyers are getting pushed out of the market by cash buyers. In my area, most real estate transactions are 100% cash, and the prices are $500k to $5M. CASH. Buyers with less than 20 percent down can't buy anything. I see the same with boats and planes too.

I agree that this one is difficult - have you seen the massive increase in airplane engine and parts pricing, and have you ever seen those go back down?  And the used parts planes are now buying 'airworthy' aircraft because of the value in parting it out. I suspect this trend will continue, tightening up the supply side of used airplanes.

And not all planes are equal, C172 prices have increase way more than average, so some types just don't increase in value.  

Aerodon

 

[A64Pilot]

1 hour ago, philiplane said:

This bubble is a bit different. Previous ones were caused by borrowed money. But this time, many large purchases are being made in cash. First time home buyers are getting pushed out of the market by cash buyers. In my area, most real estate transactions are 100% cash, and the prices are $500k to $5M. CASH. Buyers with less than 20 percent down can't buy anything. I see the same with boats and planes too.

They may be paying in cash, but I think it’s often borrowed money. A great many of these real estate sales are to Corporations who either intend to resale or rent out.

These Corporations are borrowing large sums of money for well less than 2% and buying up properly and are making large returns.

Not all sales are that way of course, but in truth not many can pay more than a half mil cash, or find it’s not maybe the best decision. 

Buying the house as I’m retired I had a talk with my advisor, he ran projections for me, my gut was saying pay cash as that’s always been my way of thinking, but compared to historic returns on investments compared to a 2% interest loan it just didn’t make sense 

[TheAv8r]

I think while a good part of this is market driven, another element in the calculus is simply the aging affordable GA fleet. There are only so many 60s-70s era aircraft to sell, flight schools are snatching up anything that can work as a trainer quickly which has caused training aircraft prices to skyrocket, and every year there are more pilots wanting to buy and fly the same 60s-70s era fleet which is not growing. Thus creates a supply issue.

The demand issue is what people have highlighted here - more $ available so more people are buying vs. renting. But this is also highlighting the dwindling supply which is causing a mismatch between the two.

[aviatoreb]

Market and cost aside.  Just talking piloting - I don't think it is too far off for a mid-time student pilot to already begin training in an owned Mooney with the supervision of a good CFI.  But sooner a Mooney CFI pipe in on that.  But seems reasonable - and training in what you want to fly and own has some advantage.  Beginning to fix er up to just the way you want rather than pouring money into a rental or a low end buy then dump plane.

But back to the world of money - seems like a tough market to be a buyer.

[WaynePierce]

You might think about the route I took (for the most part). Before I got my PPL I was able to buy in to a 4 partner ownership in a Piper Cherokee 180C. It was a great plane, not fast but not slow. Super easy to train in and build time. I started working on my IR soon after earning my PPL, unfortunately after I had passed the written I was diagnosed with Cancer. Before I could resume my training the written was no longer current so I have to take it again.

Fast forward to today, I bought my Mooney "J" 3 years ago and retired from work 3 months ago. I now have plenty of time and I'm working again on my Instrument ticket. Things happen quickly in a Mooney and the electronics are more advanced than the Cherokee was. Build your time and confidence in a simpler air frame and the IR would have probably been easier for me in the simple Cherokee. Your insurance will be staggering no matter when you get your Mooney.

[aviatoreb]

4 hours ago, bluehighwayflyer said:

Totally correct.  As the Nobel prize winning economist Milton Friedman said, inflation is an entirely monetary phenomenon. This is what happens when you increase the money supply by 38% in less than two years. Expect the current CPI range of 5 to 7 percent to persist for the next several years.  

Its also perhaps to shortages.  Supply chain shortages, and especially when sporadic are difficult.  Inflation is becoming a problem right now around the world.

[A64Pilot]

2 hours ago, aviatoreb said:

Its also perhaps to shortages.  Supply chain shortages, and especially when sporadic are difficult.  Inflation is becoming a problem right now around the world.

I know I sound like some kind of conspiracy nut, but I believe some CEO’s have learned that there is profit in shortages, because apparently what shortage means isn’t that it’s unavailable, just that it cost more. Think of lumber just a few months ago for example.

We can’t build cars because there are “chip” shortages, but you can buy computers, video games and other consumer electronics that surely have “chips” in them.

Then Tesla last quarter delivered more cars than they had before, and I can assure you a Tesla has a lot of “chips”.

But back to the current economy, I’m in back woods Al now, Lanett to be exact and went to Sonic to get a milk shake, and when I ordered it I was told that due to staff shortages it would be 20 min., and they did have half the stalls closed too. They can’t get people to come to work, in my life that’s unprecended, I don’t know where this is going, but I don’t think it’s sustainable, not without getting the Military, we gutted NASA, I guess the Military is next?

Inflation is one way you pay for deficit spending, or that’s my understanding anyway

[A64Pilot]

2 hours ago, bluehighwayflyer said:

Yes. Central banks around the world all responded to Covid pretty much the same way. The US is not alone in this.  

It’s my understanding that compared to several other first world nations the US has actually been pretty responsible in its response.