What trend is used equipment or auction prices seeing now? Are prices getting higher or less? What do you expect to see in the new year 2011?
They seem to be inching up on used iron. New Iron is going up at a faster pace due to the inflation the talking heads are trying to convince us isn't happening.
I think its going down. Way down. Ive been watching equipment on ebay, and looking at machinery trader and similar sites. The equipment that is being sold by most "dealers" is overpriced for the times and is obviously not selling. You see the same machines month after month. The ones see the most of... are of Cats. Caterpillar machines are advertised across the nation by the thousands. More than any other brand. And there is always some goof who thinks his beat up wore out old machine is still worth as much as a newer one becuase its a "cat". They never sell. There are so many construction companies going bust or have already gone out of business-(including myself), that auctions like Ritchiebros or Iron Planet are constantly full of machines that are selling for well below market value. Example near me is a recent bar none auction i went to in sacramento ca. They had about 20 Sunbelt rental Co. Case 580M 4x4 backhoes. All in good condition with low hours. I see these on ebay for $35-45K. All sold for $25Kea. or less. Inflation is definately happening, and technically prices on everything should go up, but when there is no work for these machines in america anymore, its like the real estate market. Too many machines for the amount of buyers who have any money. Supply and demand. In my opinion demand is at an all time low.
It depends on which machines you are talking about. Small machine prices are holding their own or going up slightly. Large machines that have lots of electronics are going down. Machines more than five years old and in poor condition sit everywhere. Less than five years old and in average or better condition are still high priced but they still don't sell fast. Price trending went down suddenly in late 2008 and early 2009 but seems to have been recovering slowly. I haven't seen a lot of better than average condition machines in any auctions lately. The better condition machines seem to do about as well at the auctions as at the dealers. I have seen a lot of poor condition non electronic machines being shipped overseas. If you are looking to upgrade your iron, I would say now is as good as any time to do so. New tier requirements start in January and I expect the used market to get more expensive as people try to steer away from the new technology until it proves reliable and cost effective.
Devil's advocate- Some companies that bid federal jobs may be required to use the latest tier equipment. This could leave them selling off some of their late model iron. :beatsme
machine values i see compact equipment holding value. large stuff, trucks and support equipment could not be cheaper. i have made some great buys this year because of this
I have been watching the past 3 auctions on ironplanet, and it really depends on what you are looking for. I think skid steers and most mini's are selling cheaper than the would normally, but full sized excavators have been going for a little more than they where last year. I spoke with the rep. from ironplanet stated that the market is going to be flooded with a few large liquidations for some companies that have gone under and the banks and financing companies have held the equipment to not flood the market. He said that prices will be lower than now after the first of the year, and thinks they will stay down for the first half of the year. Hope this helps. Bill
Bill, if that's right then next year should be a perfect time to buy!!
DOWN, DOWN, DOWN The market is flooded with used equipment. The only machines that are selling are the ones priced to move and the ones that are being purchased by cash buyers that do not need financing. The banks base their loan amounts against auction data, because that is most likely how the banks will end up getting rid of a machine if the buyer defaults. If auction prices are lower then the banks won't loan as much and the negative downward spiral starts. I have been actively trying to purchase a piece of equipment for over a year. It seems no one is lending( at least not at reasonable rates). I am seeing machines being advertised for 18+ months. I even know of an individual that has a good paying, steady job that has been trying to refinance his home for several months now. The bank is giving him the run around because when the deal is done the banks will lose out on interest. I think the banks are a very big problem right now. If they do not make the funds available, then nothing is going to sale. Not houses, cars, equipment, nothing. Just my observations.
I have noticed this too. If everything goes to market all at once the prices will only continue to fall. This is true in both the residential and commercial real estate markets as well.
I truly believe if you have the money and looking for a machine I think some of the best deals are yet to come. I just bought a Stone Double drum roller (3000 lb) with a brand new Honda gear reduction engine in really good shape to do asphalt patching and street cuts for $1300.00 on ironplanet. I was surprised when I got the email saying I had won with the priority bid, I didn't think it would go for any less than $2500.00. I have dealt with the ironplanet rep. for about 8 years and he has always been very straight up with me, and right on with his information. He stated there are a few large contractors that where being propped up trying to wait out the recession, and finally the banks and financing are going to let it go and take the right off's on the books for next year hoping they will need the loses for the balance sheets. He says companies like cat have been only letting so much equipment go to the auctions to keep from completely dropping the bottom out of the equipment market, makes sense to me. I don't think that the prices will get complete stupidly low because there are still several other countries that are buying up equipment just because its cheap. Good luck with your equipment purchases.
I know of some guys right now that would sell off every piece of equipment that they have. The problem is that they would have to give the stuff away just to get rid of it. So they will hang on to it as long as possible, but it is just more potential used iron on the market in the future. It is deffinately a buyers market. Especially CASH buyers.
In working for the government the tier requirements I have seen so far will only make a big difference for companies with a lot of non tiered engines or tier 1. This doesn't include mexifornia. Most of the big companies I have any dealing with so far have been doing alright working on stimulus projects. It will be interesting when that goes away. I agree with most on here though that cash is king. Financing is going to be a high hurdle for all.
The telehandlers I watch are still going down for sure. It is very sad.
The market has been interesting to watch & be a part of. I will give you a real life example. Recently we had a 631D water wagon to sell for a mine. I marketed the living heck out of it on a national level contacting dealers & parts dealers. Very little interest at that level if any. However I had a ace up my sleeve...Knowing that moving a 631D is costly, I sent a postcard to over 3400 contractors in the MT, SD, ND & WY areas. It produced 4 bidders for one machine. The 631D sold for $33,000. Gone to SD. 2 days later RB sold the same make / model machine in Las Vegas It sold for $18K. It was obvious the demand in that area was less than the area we were in. Part of the results you see is directly related to the demand in the marketplace & the cost of moving an item factored in. There are many dealers / vendors whose salvation has been the Bakken in the MT / ND area.
That's exactly what I have heard, The northwest Cat repo yard is overflowing. They told me they are holding on to most of there stuff. I have started seeing some of it on the market lately.
I talked to one of the larger trucking companies around here doing heavy haul and they are hauling strictly for cat and are busy with their entire fleet doing repos and were months behind on work and that was this summer, they expected work to pick up considerably after the ground froze up and work slowed even more. I'm not sure doom and gloom is the answer but the line the media is feeding us isn't real either, my lenders are telling me to sit and wait, theres better deals to be had coming down the road, shortly, but they have been saying that for a while now. I agree with the slogan of cash is king and if you have money there are deals out there to be had. I'm not sure what is coming for sure but its not looking good from where I sit and who I talk to if you have highly leveraged equipment or business I"d hate to be in your shoes right now. As one rep told me its an extremely shakey market right now and anything is possible, the only thing for sure is theres a wild ride ahead, which way is anybodys guess.