At the various business aviation conferences and other industry gatherings this year, the talk seems to be the same: What is the pulse of our industry? Will 2019 be as robust as 2018? Will the new aircraft entrants from the OEMs stimulate transitions and add much needed fresh inventory to our marketplace? Will the prices of the new aircraft add stability to our overall bottom-to-top market pricing?

Last year, the market saw inventory levels of quality preowned business jets dwindle and many pricing segments stabilize. Aircraft brokers all seemed desperate for quality inventory to satisfy the appetite of the buyers.

Premiums were not paid, but residual loss rates in most categories remained flat quarter-over-quarter. This simulated prices actually rising since common sense would have said that pieces of equipment over time and use should go down in price. We were acting, as an industry, as though great times abounded.

Were we really actually just draining the sea? And while demand seemed to far outpace supply, was that really the case? Would deeper dives have shown that the supply was more the problem rather than demand being so great?

For us, preowned sales transactions are the same quarter-over-quarter, if not even slightly higher, this year. Considering the rocky start to the year with trade wars leading to destabilizing tariffs and the government shutdown consuming much of January, we are enjoying a successful 2019. So what is really going on behind the curtain?

To answer one of the questions posed in the opening paragraph, the OEMs’ new aircraft entrants are actually adding to available inventory levels. Simply, when owners take delivery of their new aircraft, they are putting their “old” aircraft up for sale. That is wonderful for everyone considering buying.

If you are a seller, this juncture can be somewhat confusing. Why, if transactions are equal to or slightly better than 2018, are prices not as stable? We must look at the demand side of the equation. I believe demand is down slightly, thereby not absorbing the supply as quickly as it was evaporating in 2018. This is causing another scenario—an industry looking one way and acting another.

It just goes to show that even a slight shift in either the demand or supply of a market can cause ripple effects, much like a pebble dropping in the water causing bigger waves the farther you get from the center. The result is less-stable pricing and longer days on the market.

With only a few extra airplanes for sale and with a slight change in demand, the little ripple is causing large price corrections. In 2018, we rarely saw “price lowered” or “must sell” email blasts. Today, we are seeing that being more the norm than the exception.

As an industry, we can quickly fix this. We can act in the same direction as the market and create the healthy look that should occur with the same or slightly higher transactions as last year. All we need to do is price aircraft offerings correctly when initially listed.

We must not act as if demand and supply are the same as they were last year. Also, we must remember the dynamic nature of our industry and shift early and slightly so we are not caught having to make large shifts later.

Jay Mesinger is the CEO and Founder of Mesinger Jet Sales, an international aircraft brokerage firm. With 46 years of successfully buying and selling aircraft, Mesinger Jet Sales has a global reputation for personalized, transparent service.