Buyers strike during this time of uncertainty?

I've only been following the Ferrari market closely for all of 2 months, and that for the 458/488 only. Only a few cars have been added in the past few weeks. Nearly all of the cars that were for sale in mid April are still for sale. Some price reductions are happening but as far as I can tell, the advertised inventory isn't moving.

I dunno. This week alone, my market portfolio value decreased by the cost of a fully optioned SF90. And I'm not the only one. Yes, it will come back one day, and many of us on this forum probably view $1M as a rounding error on a statement of net worth, but... Does anyone really want to buy at what is likely the peak of the used Ferrari market, given the events of the past six months and the very real possibility of a significant recession by Q4?

 

I couldn’t agree more. My market portfolio from the peak is down about 6 fully optioned SF90 spiders. I’m sure there are many that are down 100 SF90 spiders. The watch market has started to correct and everyday I get email alerts about price drops on exotics. I can tell you that many of my well to do friends are all on the fence about big purchases and scaling back across the board. Myself included.

 

It may also not take much time before it impacts the new cars market - not an issue for Ferrari sales (there will still be enough buyers) but the claimed 3-year waiting list will turn into more reasonable delays.

 

Three weeks ago, I turned in my 2018 488 Spider to my dealer as trade for the incoming F8 Spider. They sold it the same day for almost original sticker price of the car.

I believe the market is softening, but nice cars will always be in demand, prices will come down from here.

 

Same thing as the pre-owner watch market….slowed significantly in the past 6 weeks. Some Rolex models that were selling at 2-3X MSRP are down 25%.

 

I think we'll definitely see a softening in the market for luxury goods, from aircraft to exotics to watches, and so on. I also think we'll see plenty of these goods just sit unsold for a while. Or in the case of the used aircraft market, which I follow very closely, you just won't see that much inventory. It will naturally take time for the softening to be reflected in asking prices, but given the volatility of *everything* these days (commodities, equities, bonds, etc), that softening could happen rapidly. Or, we'll just see a rapid decline in available inventory as owners of luxury assets simply decide to wait out what could be a short-term slump.

I don't know the answer....

 

We're still getting calls, letters, cards, and love notes from aircraft brokers begging us to let them sell our 2010 Nxi Meridian. We've had offers $400k over what we paid for it years ago. And just last week a gated 360 Modena with 20k miles went for $215k on BaT. That isn't a very soft price. If there's a softening in the market, it's not evident to me.

So it may not be time to declare the sky is falling quite yet.

 

Give it time - clearly coming. You are picking lagging indicators when others are speaking of general trends.

and this is a healthy sign of an adjusting market. Lower asset prices and reduced demand will greatly help temper inflation and restore a bit of normalcy to the world, and allow supply chains to catch up. Thinking that used watches/cars/aircraft values should continue at these levels (and defy decades of normal depreciation trends) doesn’t make sense.

And for the record, I’ve greatly enjoyed owning a 488 Spider and making money on it when sold. And now the same with an F8 Spider. I just don’t expect that to continue.

 

And yet the Meridian market, like many other light turbines, is dramatically slower than ever before. There used to typically be 15-25 Meridians for sale at any given time, plus 10-15 JetProps. Now, there are all of 10 Meridians and 3 JetProps listed. That's including the South African and Polish ones that are typically basket cases (none of the examples I looked at had ever had compressor washes, not to mention trend monitoring or engine programs).

Deals just aren't happening at anywhere near the same pace as before. (I came very close to acquiring a 2014 Meridian for my business and personal flying back in 2020, but ultimately decided not to because I wasn't at all confident I could meet the 51 pct business usage rule, and as they say, a turbine really does need a job.) So the Meridian market is something I've been watching closely for years.

It may be that the lack of inventory will keep prices at their current level. It may also be that spiraling fuel and insurance costs will drive many owner-pilots out of flying, thereby contributing to a significant softening. Especially in the SE turbine market, the insurance increases have been staggering. Buddy of mine with a TBM had his insurance premium triple, and that's apparently pretty common. Another friend needs not just a biannual, but a twice-yearly IPC and flight review in his M500 just to keep his insurance.

All I know is, when a tired PA46 with 3200 SMOH on a second-run PT6 is listed for $1.4M, whereas in 2020 it would have retailed for perhaps half that, there's a fundamental imbalance in the market. I can't imagine that today's prices are remotely sustainable. We shall see...

 

I don’t even know what half of there terms are, but I love it.

 

sold my 2019 488 spider to dealer last week, they sold it within 2 days
but I do believe this was the exception

 

It seems like if you want a 458 and are willing to pay a big premium for even 20k mi examples, there are plenty to choose from (in the US at least). A year ago, I think they would have been flying out the door. I can remember days going into the dealership where they had absolutely no cars at all on consignment, as they were in less than a day in most cases. Now they have two pages of listings online and that doesn’t include everything on site.

I don’t say all this to mean I think the sky is falling. Far from it. My portfolio has taken the same proportional hit as most everyone else I expect, and for those still in the market for an exotic I suspect they might be like I would be: precise. Imagine I’m still willing to drop some money on that fcar, but it has to be a 488, and it has to be this or that config. I think that some folks were seeing an opportunity over the last couple years to collect or at least experience a wide range of vehicles through methods that may not be as supportive anymore. If it’s me in that position? I’m finding that particular ride I want and then locking down for a bit. When those buyers become less and less, and existing consignments sit more and more, AND those sellers decide cash is more important than car, then perhaps we see more downward activity.

Or I’m one man rambling nonsense and nothing changes. Who knows! The world is a fun and crazy place. [emoji16]

Forza Ferrari! Cheers to all in Montreal today!




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I have no idea what you are talking about but it sounds fascinating and I totally believe you. Especially the reference to Polish basket cases.

 

Hahaha sorry... In plain English for those of us who don't speak Pilot: the market for personal aircraft has gone crazy, to the same extent as for exotic cars and other luxury goods. However, in recent months, especially in the higher end of the owner-flown market (think single-engine turboprops, or small 6-8 seat jets, as opposed to the large-cabin jets typically flown by larger corporations or the Larry Ellisons of the world), we're seeing very very little inventory. The Piper Meridian, which I'm using as my example, is one of the most popular owner -flown small turbine aircraft out there. Prices basically shot up by 50-80 pct over the last 18 months, but now we're seeing the numbers of available used aircraft decline dramatically.

This is in contrast to exotic cars, as far as I can tell. Over the past month I'm seeing plenty more 458s/488s listed for sale than back in March/April. It'd be interesting to see a historical graph of actual data, since my blathering is based purely on my casual searches.

As for the Polish and South African comment... A lot of these airplanes that get sold overseas, eventually wind up being resold out of Poland or South Africa, for reasons I'm not sure of. Now, turbine engines demand frequent maintenance to keep them in proper operating condition, including fairly basic things such as high-pressure washes of the engine compressor section, so as to avoid contaminant buildups. They also should be on trend monitoring programs, whereby the onboard computer saves various data (RPM, turbine inlet temps, exhaust gas temps, etc etc) and uploads it to the manufacturer, thereby allowing the engine to be monitored for trends that may indicate issues... So that preventative maintenance can nip the future issue in the bud. Anyhow, when you look at the maintenance logs of a lot of these aircraft offered for sale especially in South Africa and Poland, few if any of them have the maintenance histories you'd want to see. But they're usually 20-30 pct cheaper than comparable US-based aircraft.

 

Dealers have been searching for high w/458s many months now. They've finally found it.