I look forward to running Mason Amelia’s January market analysis. I like to give at least a week cool off to allow everyone to update/remove old December listings and see where the dust settles. Typically, the EOY inventory buildup is met with strong Q4 demand, and the surplus is nicely “absorbed,” thus returning balance to the marketplace in preparation for slower early-year buying activity. Could things be more trepidatious for the Cirrus market this go around?
Well, the S&P has shown a nice rally, interest rates should step down a time or two, and it’s election year – all good signs for strong aircraft sales ahead. We’ll need it too, considering that the top of the market (G6 22T) saw over 80 units for sale in December. It wouldn’t be uncommon to see EOY buyers cutting that inventory in half, but even so, January’s numbers may reveal an unprecedented number of units for sale. Plus, the anticipation for the G7 has become palpable, which could be triggering some sell-off.
When the G7 finally arrives, people will be enamored with their own pontification. “The best thing just arrived…good thing we held off.” Dozens more G6 may hit the market, and here’s my prediction:
People will realize that the G7 is totally awesome (but not FADEC awesome), still commands a 1.5+ year backlog, and it’s a $1.3MM+ airplane. Not many people are going to have that (financial and/or mental) fortitude to wait. Then, the buildup of those awesome and nearly capable G6’s for 30-40% less will seem like a great value, and quickly get gobbled up. I do not believe a $500k more expensive aircraft poses a existential threat to the entire G6 market.
Also, buyers should make there move in the near term, as prices are down close to 20% off historical highs. Conversely for sellers, be intentional with marketing and price positioning. You don’t have to give it away, but you have to be precise to stick out in an oversupplied landscape. Simply put, if you enlist the help of a professional that intimately tracks this market to “squelch” through the noise, there are some excellent deals to be had right now for buyers, and there are opportunities for those seller’s to relinquish their assets at a fair price. And sellers seeking to upgrade, lest not forget they shall seize greater opportunity when they turn into buyers ahead…
To sum it all up, the Cirrus market may still have some holiday weight to work off. Speculation of a G7 has already been “priced in” to the market, and long term will probably provide more benefit of upholding used Cirrus values. Whether buying or selling, consider hiring a great aircraft broker, such as Mason Amelia where you’ll find personalized service, active selling and distinction to make a move in this quick-moving market. Cheers for ’24!
-Jesse