How can the time on market affect the price of an aircraft?

The time an aircraft spends on the market, often referred to as “days on market” (DOM) and can have a notable impact on its price. The relationship between time on market and price is influenced by various factors. It is essential for both the aircraft seller and buyer to understand these dynamics. Aircraft are often listed at an initial asking price, which may be based on a seller’s expectations, appraisals, or market conditions. If an aircraft is priced too high relative to its actual market value, it may spend more time on the market. As an aircraft remains on the market, potential buyers may perceive it as less desirable, possibly due to concerns about its condition, maintenance, or other factors. Over time, the perceived value of the aircraft can decrease. Sellers who struggle to attract buyers may gradually reduce the asking price to make the aircraft more competitive. These price reductions can be influenced by the number of days the aircraft has been on the market. Broader market conditions can impact an aircraft’s time on market. In a strong market with high demand, aircraft may sell more quickly at or near their asking prices. In a soft market with lower demand, aircraft may linger on the market longer, potentially leading to price reductions. As an aircraft sits on the market, buyers may become more confident in negotiating for a lower price. They may use the time on market as leverage to negotiate a more favourable deal. The presence of similar aircraft listings can affect an aircraft’s time on market. More competition can lead to longer DOM. If multiple aircraft are available, buyers have more choices and may be less inclined to pay a premium. The condition of the aircraft plays a significant role. Aircraft in pristine condition, with up-to-date maintenance and documentation, tend to sell more quickly at or near the asking price. Conversely, aircraft with undisclosed issues or extensive maintenance needs may spend more time on the market and sell at a lower price. The effectiveness of the seller’s marketing efforts and the aircraft’s exposure in the market can impact DOM. Well-marketed aircraft may attract more potential buyers and sell faster. The time of year can influence the time on market. For example, the selling season for recreational aircraft may be influenced by weather and recreational flying patterns. The seller’s motivation and urgency to sell the aircraft can also affect DOM. Highly motivated sellers may be more willing to adjust their price and negotiate to achieve a faster sale. It’s essential for sellers to carefully consider pricing strategies and market conditions to minimize time on market and maximize the chances of selling at a desirable price. Buyers, on the other hand, may use DOM as a negotiation factor and consider whether a longer time on market implies potential issues with the aircraft or opportunities for price reductions. Ultimately, both parties should conduct thorough due diligence and be well-informed about market dynamics to make informed decisions.