Are We Back Yet?
Hi Friends!
As we all know, the collector car marketplace really isn’t just one market. It’s more like two. We’ve seen this evidenced repeatedly over the years. When the economy is good for everyone, the common man gets involved, buys their dream car, volume goes up and the lower part of the market carries everything. It’s more or less the opposite on the other side. When times are tough, the top end tends to come out and play and we see runs on the things that tend to generate headlines. A case in point example of this would be the Enzo era Ferrari market from 2008-2014 during the Great Recession or the explosion of the Muscle Car market in the early 2000s post 9/11.
The last two years however, have been a challenge as both sides have largely sat on the sidelines and failed to truly engage. The question for many has been who’s going to move first? From where I sit, coming out of a fairly unprecedented situation like we have, it seems to me that the low end of the market has got a steeper climb.
This isn’t just based on economic hypothesis, but also generational. Simply put, a robust entry level marketplace needs people to be able to enter. When we’ve got situations like shortages with maintenance and restoration technicians, causing hourly labor costs to dramatically increase, that scares away new buyers. Same thing too with the lifestyle side. It now costs like $1,500 to show a car at The Quail and potentially even more (depending on your lottery situation, etc.) just to show up and watch the seemingly endless run of new product unveilings therein. The Quail is obviously an extreme example, but even in principle, this is discouraging for people who are incoming and although there’s more cars available for people to get invested in than ever before, using them and doing fun things with them still remain the central component and that seems to be getting pushed further and further away from lower end enthusiasts.
This means the high end of the market needs to blink first.
On Thursday night, RM Sotheby’s kicked off their Moda Miami celebration with a nine-car offering from the Indianapolis Motor Speedway Museum Collection. I don’t think anybody would deny how significant and how fantastic this group of offerings was. This said however, we’ve seen the top end auction houses bringing exceptional automobiles to market over and over again throughout the last couple of years and a lot was left to be desired. Cars that almost everybody in the know thought should have brought more, didn’t and although again, many of these cars offered here were exceptional (lead by what was probably one of the better GT40s to come up recently), I’m not sure that anybody was necessarily expecting anything too terribly different. After all, the really, really significant stuff like their Mercedes Monza Streamliner and Ferrari 250 LM (which you always have to expect will sell for top dollar regardless of what’s going on in the world) had been pieced out and already sold.
There’s no question, that RM silenced the doubters on Thursday, selling each car offered towards the top of the pre-auction estimate or in some cases quite a way above. Total haul for Thursday was just over $34 million. It’s been at least a couple of years since I can remember anything like this happening.
I’m sure there’s doubters and naysayers out there who can point to the individual offerings, the area in which they were offered (which keep in mind, didn’t produce anything terribly exceptional last year by any stretch of the imagination) and the general nature of how they were offered as being a likely culprit for the success of this group, but I took Thursday night’s results as being something very positive. Of course, sell through, wasn’t quite as good on Friday, but the cars that did sell, did sell well and I think that’s encouraging too. The high end of this marketplace waking back up is a welcome thing and I genuinely hope it continues through next weekend when Gooding Christie’s and Broad Arrow have their turn at the plate.
There’s a lot of good cars for sale in Florida this year and it would be nice to see there be buyers.
Now is again starting to feel like that time.
That’s it for this week……
Darin Roberge