My wife and I have been looking into RV’s ever since COVID hit. Just like everyone else apparently. We weren’t in a place to purchase one at that time and the prices went through the roof because demand surged. The same dynamic played out with cars both new and used. Inflation has been running rampant in some sectors of the economy and now the tide is changing dramatically.
RV Dealers Are Swamped With Inventory
And it’s not just the dealers. There are tons of private market RV’s up for sale. Folks purchased them during 2020/2021 and now they have buyer’s remorse. The world didn’t end and they’re going back to their usual routines.
This article out of zerohedge highlights the dramatic price cuts that are already happening at dealers. My guess is it will continue to happen. There is an oversupply of RV’s due to the surge in demand and the bullwhip effect that happened in the supply chain. Add in decreasing lending activity in the banking sector and you’ve got yourself a huge deflationary force in the RV market.
Used Cars Are Heading the Same Direction
And used is a broad term. There are going to be A LOT of 2020-2022 models hitting the used cars market. Mainly because repossessions are rising and many people are about to lose their jobs in the very near future (6 - 9 months). And as is the case with the RV’s, lending will be an issue as interest rates remain higher and banks remain stingier with their ‘approved’ stamp for loans.
The FRED database shows the massive run up in the cost of these vehicles. Outsized moves like these in goods and equipment typically resove with a strong move in the opposite direction. If you look to the early 2023 numbers, it’s already beginning to move lower. Keep in mind nothing moves in a straight line and so some aggregate demand is working its’ way through the system currently. Once that abates, down go the prices.
How Do You Capitalize?
In short, cash. Hopefully you haven’t been buying into the debt-fueled buying hysteria as of late. The last two years saw most folks splurge. It was really time to aggressively pay down debt and hoard money. If you have some gold to sell a bit of or if you’re sitting on cash, the time to deploy it will be soon. In the next 3-6 months you should have some incredible buying opportunities for toys or even business equipment that you’ve been eyeing for a while!
There may also be an opportunity to flip some of this stuff but I’m not that guy. I would point you in a different direction such as ‘The Economic Ninja’ on YouTube.
Happy bargain hunting Anarchist Investors. We’ll talk again tomorrow!
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***Keep in mind that investment and investment results are very much based on you as an individual. Do not rely solely on the discussion here to inform your investment decisions. Always make the investment decisions that are right for you.