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How will the art market meltdown affect collector Ferrari cars?

Discussion in 'Vintage Ferrari Market' started by Platini 289, Feb 7, 2016.

  1. ttforcefed

    ttforcefed F1 World Champ
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    wow. can't it just be the guy has more money and passion that you? these are passion purchases - looking at these like a bond or stock makes me think you are a speculator as opposed to an enthusiast? a primary residence fits your description exactly but are you going to tell a wealthy person they are foolish to pay 1500+ sqft for prime properties? platini you really sound bitter or maybe jealous. if God decides to take us all tomorrow I think dying with a ferrari at any price is better than dying without one.

    given your description one wld never buy a car, even at a "low" price. what cars have you owned that keep you from being a greater fool?
     
  2. Platini 289

    Platini 289 Karting

    Sep 21, 2015
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    I guess there is no right or wrong approach here - it would be a boring world if we were all the same. All down to one's priorities and outlook.... only time will tell where the market ends up.
     
  3. ttforcefed

    ttforcefed F1 World Champ
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    I think the part you are missing is there are people who don't care if prices go down.
     
  4. ttforcefed

    ttforcefed F1 World Champ
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    what cars did you own and what levels did you sell them at? And what are you looking to buy at what price level? wld you buy a tdf at 6m?
     
  5. roma1280

    roma1280 F1 Rookie
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    People buying cars are fools? I have a garage full of cars that make no sense. Platini do yourself (and us) favor and find yourself a different forum. This one is clearly not for you.
     
  6. jippiejake

    jippiejake Formula Junior
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    He just missed the point of owning a classic car is all..
     
  7. FarEastFerrari

    FarEastFerrari Formula Junior

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    #132 FarEastFerrari, Mar 15, 2016
    Last edited by a moderator: Sep 7, 2017
    I agree totally. I took this 246 GT Dino out for a drive finally last week. It was pure pleasure. She handled well and howled and screamed. Big smile on my face and satisfaction that I own a piece of art and history. Money well spent and kept. If this makes me a fool.. then a happy fool I am.
    Image Unavailable, Please Login
     
  8. paulchua

    paulchua Cat Herder
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    Your car is beautiful, and I wish I was a fool too...

    Cheers
     
  9. FarEastFerrari

    FarEastFerrari Formula Junior

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    Thank you. Yes it was a well maintained and low mileage gem found and now maintained by Tom Yang.
     
  10. jjmcd

    jjmcd Formula Junior

    Dec 3, 2004
    490
    In case this hasn't already been posted.....


    THE NEW YORK TIMES

    March 10, 2016

    The Assets of the Ultrarich Come Closer to Earth

    By James B. Stewart

    Last year, a Manhattan penthouse sold for $100 million and another went into contract for $200 million. Christie’s auctioned Picasso’s “Women of Algiers” for $179 million, and Sotheby’s sold the 12-carat Blue Moon of Josephine diamond for $48.4 million. A vintage Jaguar sold for $13.2 million.

    For the ultrawealthy, 2015 was an embarrassment of riches.

    But after years of dizzying appreciation, the values of luxury assets are plateauing and in some cases plunging. Volumes have shrunk, prices are being cut and some auction lots are going unsold.

    “We’ve just come through a boom unlike anything I’ve experienced in 30 years in the business,” Jonathan J. Miller, chief executive of Miller Samuel, a real estate appraisal and consulting firm, said of the market for high-end sales. “The hard asset buyers have all cooled at the same time.”

    The sharp decline in demand is caused by many of the same factors creating broad financial weakness across the globe: collapsing oil and commodity prices; a slowing Chinese economy; and the prospect of higher interest rates in the United States. Rather suddenly, it seems, the voracious spending appetites of newly minted billionaires from Russia, Brazil and China have cooled off.

    In Manhattan, some sellers of luxury real estate have slashed prices. The asking price for a Park Avenue townhouse dropped $18.5 million, to just under $30 million; a seller cut the price for a Central Park South apartment by $7 million late last year, to below $18 million, and has since taken off another $2 million. Neither property has sold.

    The billionaire hedge fund manager William A. Ackman, who was part of an investor group that paid $91.5 million for an apartment at One57, the tower on what is now known as Billionaire’s Row in Manhattan, may already have missed the market peak if he hopes to flip it at a profit. An apartment there purchased last April for $20.3 million sold again this year at a $2.5 million loss.

    Such prices are still in the unattainable stratosphere for almost everyone but the ultrawealthy. Still, the impact is significant: 12 percent fewer Manhattan apartments (189) were sold last year for more than $10 million than in 2014, with most of the decline coming in the second half of the year, according to CityRealty, which tracks co-op and condo sales.

    In London, the trend is even more pronounced. Prices for central London luxury properties over all dropped in 2015, with the steepest declines in two of the city’s wealthiest neighborhoods, Belgravia and Knightsbridge. The number of high-end sales dropped 40 percent in December, according to Property Vision, an English property advisory concern. It recently reported that sellers were cutting prices, and “we are negotiating deals today that would have been impossible even in the late autumn.”

    Art collectors are anxiously waiting for the results of the big spring auctions in New York. The art market’s first test of the year, the February auctions in London, were not the disaster some had feared, but results were tepid, with total sales declining 35 percent at Christie’s and 50 percent at Sotheby’s.

    In one closely watched sale, the Malaysian financier Jho Low sold Picasso’s “Tete de Femme” for $27 million, which means he incurred a nearly $13 million loss (not counting commissions) since he bought it at Sotheby’s in 2013 for nearly $40 million.

    That anyone would sell at such a large loss suggests a distress sale. (Mr. Low, 34, is close to the family of the Malaysian prime minister; the country’s sovereign wealth fund, which the prime minister heads, is being investigated.)

    Shares in Sotheby’s have mirrored the auction results: After peaking last June at over $47, they have declined about 45 percent.

    “We’re seeing more restraint by mega-buyers, both individuals and institutions,” said Evan Beard, national art executive for U.S. Trust, who has advised many high-net-worth clients. “Many would-be consignors have looked at all the uncertainty and decided they’re sitting out this season.”

    The market chill is especially pronounced for classic cars, the luxury asset class that had the highest run-up in prices over the last 10 years (490 percent), according to the recently released 2016 Knight-Frank wealth report. The big classic car auctions held every January in Scottsdale, Ariz., were a disappointment, with total sales falling 15 percent from last year, the first decline since 2010.

    “Prices are dropping relative to last year,” said Eric Minoff, a car specialist at Bonhams who was in Florida this week for the Amelia Island car auctions. “You can’t have 20 percent appreciation every year. But if you bought in 2008, you’re still far ahead.”

    Hagerty, which insures and appraises vintage autos, said its North American index of the collector car market had its biggest month-over-month drop in February since the depths of the financial crisis in 2009.

    Even worse is the once-thriving market for high-end antiques. Prices have dropped for 10 consecutive years, a result of changing tastes and a shift toward midcentury modern and contemporary furniture.


    It appears the ultrarich are as vulnerable to the laws of supply and demand as everyone else. Despite auction catalog copy that stresses adjectives like “rare,” “unique” and “irreplaceable,” the supply of luxury assets for sale has surged as prices have climbed into the stratosphere, driving down prices.

    On or near 57th Street, where developers are vying to build the world’s tallest residential apartment building, five major towers are in various stages of construction. “Now that all these towers are visible, and not just holes in the ground, people are realizing that there’s a lot of this kind of product coming on the market,” Mr. Miller said.

    As prices surged for late-model Ferraris, fleets of them flooded onto the market. At the Bonhams February sale at the Grand Palais in Paris, six nearly identical Ferraris from the late 1980s to mid-1990s were offered; three failed to sell.

    “The sight of six Ferrari Testarossas, all red, lined up at one auction waiting optimistically for buyers probably summed up much of what’s wrong with the recent bull market,” noted Simon Kidston, founder of an advisory firm for car collectors.

    Although the ultrawealthy often pay in cash, liquidity for potential buyers has also been contracting, according to Mr. Beard at U.S. Trust. Lenders are being more cautious about financing exotic purchases. The auction houses have been less willing to extend extravagant so-called price guarantees to sellers, especially after Sotheby’s took a bath on the estate of its former chairman, A. Alfred Taubman. (Sotheby’s said in December that it lost $12 million after offering the Taubman estate a guarantee of $515 million.)

    It also hasn’t helped the psychology of luxury markets that Wall Street bonuses for 2015 dropped nearly 10 percent from the year before.

    Because the number of ultrawealthy buyers is so small, even a modest drop in demand can produce outsize declines. “It’s generally been the case that at the extremely high end of the art market, demand is driven by about 50 to 60 people,” Mr. Beard said.

    Some of those people are the same ones who have been buying lavish new condos, often through anonymous shell corporations. The New York Times identified Mr. Low, the seller of the Picasso in February, as the buyer of a $30.6 million condominium in the Time Warner Center.

    After five years of surging prices and buying sprees, some ultrarich people may simply be tapped out. “There are only so many billionaires out there,” Mr. Miller said. “Even though they rotate from place to place around the globe, at some point you have to wonder if they have enough.”

    Of course, one billionaire’s distress sale is another’s bargain. The star of this week’s Amelia Island classic car auctions was a rare, metallic blue 1937 Bugatti Sports Tourer, which Bonham’s estimated would sell for $13 million.

    It sold on Thursday for $9.375 million.

    See: http://mobile.nytimes.com/2016/03/11/business/the-assets-of-the-ultrarich-come-closer-to-earth.html?_r=0
     
  11. msn

    msn Formula Junior

    Jan 22, 2011
    250
    It is funny they do not post the world record sums for cars over this weekend.
    250 California, 550 spyder. Marcel Massini today posted a very special 288 GTO has sold for a world record price.. All the people out there that doubt the market should look at the grade a cars making world record prices.
     
  12. ttforcefed

    ttforcefed F1 World Champ
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    nah its more fun and intellectually honest for non owners to hope prices come down a lot even though they know deep down inside they weren't buyers in 09 and 10 and wldnt be buyers if prices went back. they wld be too chicken to transact so it's a vicious cycle of non ownership, envy, and bitterness.
     
  13. Platini 289

    Platini 289 Karting

    Sep 21, 2015
    81
    IMHO only the very best examples of the most desirable top tier cars will continue to increase in value. The market for good “driver” cars, which should appeal to most enthusiasts who actually use their vehicles, is already weakening. Good “driver” cars encompass the huge majority of the collector cars in the marketplace. One needs to look beyond the razzmatazz of the glam auction circuit. This in no way reflects the collector / classic sports car market for 99% of the enthusiast population. Far too many people have swallowed the lifestyle pill – read too many glossy magazines and watched too many Carini shows representing a miniscule sector of the car market.
    As an example cheap Testarossas are available in Europe if you know where to look – check out this below from Coys:
    Used 1988 Ferrari Testarossa for sale in Surrey | Pistonheads
     
  14. ttforcefed

    ttforcefed F1 World Champ
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    so what are you a buyer of and at what prices?
     
  15. Platini 289

    Platini 289 Karting

    Sep 21, 2015
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    Beautiful car! Health to drive! A gift for you. This almost would bring a tear to the eye

    Chris Rea - Dino https://www.youtube.com/watch?v=DzAjr55sF_I
     
  16. Platini 289

    Platini 289 Karting

    Sep 21, 2015
    81
  17. Platini 289

    Platini 289 Karting

    Sep 21, 2015
    81
    Not sure yet tt, I'm in no rush to buy. Anything up to Daytona / F40 at today's prices is affordable but don't plan to take the plunge until I have more confidence in the market.
     
  18. ttforcefed

    ttforcefed F1 World Champ
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    wldnt u want to buy now when things are uncertain and soft?
    when did you sell the previous ferraris?
     
  19. msn

    msn Formula Junior

    Jan 22, 2011
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    We are all on this planet one time, if your dream car is an F40 buy it, waiting for things to change might never happen and nobody knows whats going to happen tomorrow.
    I've always bought the best cars that were available at that particular time and have no regrets, my love for the cars has been and still is the enjoyment i get every time i look at them.
     
  20. ttforcefed

    ttforcefed F1 World Champ
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    Me too
     
  21. boxerman

    boxerman F1 World Champ
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    The toatl numbers going up is also related to many a modern just being a "big" production used car. So the total pool of used ferraris is rising, but the total pool of say daytonas is not.
     
  22. boxerman

    boxerman F1 World Champ
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    #147 boxerman, Apr 3, 2016
    Last edited: Apr 3, 2016
    If so many cars are a passion buy, how to explain the almost sudden rise in air cooled porche, did a whole bunch of people suddenly catch the passion bug? Its an investment /cool thing for many. the many catch on based on hype to soemhtign really good that enthusiasts always coveted, same with "stick shift ferraris", and at times this crowd moves on to new must have its, and prices wither. Seems to happen ever y 10-15 years.

    If cars are just a passion purchase how come the huge premiums for time capsule cars you cant drive, I guess these are a possetion passions, bought for myriad reasons including value appreciation.

    How come stick shift ferraris are suddenly a thing, did all of a sudden the poseur/possetion/passion crowd forget paddles and sticks became the new hobby.

    Market/cars get their credibility and are intialy driven by some passionate people, followed by a lot of others who buy into hype stories based of the passion. If this latter crowd moves on prices can alter negatively pretty easily. Lets not forget the passion for buying and the passion for owning is not the same as the passion for driving. Passion for ownign and passion for buying people can and do move on, when some new investment, or impression object becomes enticing. These crowds usulay overdrive a market and we then see a softening, as in now.

    Remember when a Lambo 350GT couldnt crack 70K, that was when a daytona was 500K. Some cars get reckognition they maybe should have in the fist place, only later on in life, when the enthusiasts passion is suddenly discovered by the mass of "collectors". Thats how come stick shift ferraris are thing now. Thats how come maseer 3500 Gts are soaring even though an aston of the same era and arguably a lesser car has been what 8X the price for a while.

    If you love cars and have good taste, buy something you know to be great, sooner or later the mass will catch on and you will do fine. Meantime you can buy something reasonably you get to enjoy.

    And yes by in large the market is cooling, it overshot. And yes some items will still rise further even now, because they have become reckognised. And yes someone who pays 150K for a so so testarossa is a fool, because you can buy very good ones for less. But yes any testarossa will be worth a lot more 10-20 years from now, and possibly less in between. We are talking about a car with dramtic styling and packaging, an icon of an era, somehtign the like of which we are very unlikely to see again. i own a boxer and in time I think TRs which have higher production numbers will be worth more, simple because thye also have a degree of useability and that hey look at me style thta will work in China too, a place that will eventualy move into classic cars.

    Want a tip, when the gotta have it replacement for the 488 comes along in 2020 and 458s are like 430's now, buy a 458. Its a styling high water mark for ferrari somethign that comes along rarely, and yes for now the last of the NA cars, so you dont need to be a rocket scientts to realize that a fully depreciated 458 in 2020 will be worth a lot in 2030 and that in between you get to drive a truly awesome car. A 360 will appreciate but will always langiush in terms of growth, just like a mondial, because it Just dont got the looks or relative performance.. And 288s thats now pure art, it will rise and fall in millions dependign on the global economy and is a completly different game, one not so driven by passion in the sense of drivign passion..I wellremeber all the talkign heads sayign 288's will never appreciate much because they looked too much like a 308, true enthisiasts knew what ti was.

    be a true enthusiast with good taste and when you depart this mortal coil others will comment on how precient you were. Anyone with a checkbook big enough can by a known work by a label artist, and in the long run they will do fine. True collectors have the taste to know whats good now before the clown catch on and price the good stuff out of reach into their own game/market...
     
  23. technom3

    technom3 F1 Rookie
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    The thing that drives me absolutly NUTS about these kinds of articles and other people quoting the January Auctions in particular are they have NO FREAKING CLUE what they are talking about. They are IDIOTS that looked at a spread sheet and wrote and article. They are being a journalist (and a ****ty one at that) first and an investigative person a distant 8th or 9th. Somewhere in between is ego and then click bait titles of articles and controversy in general.

    These articles are BULL****. Complete and UTTER BULL****. Yes... i am taking a VERY strong position on this.

    You can not compare the January auctions year after year after years. Especially in what I would consider the emerging business of collecting cars. Yes I said business. People have been collecting cars since just after WW2 so collecting cars isn't emerging however the business behind collector cars has really taken off since the late 90s or 2000s in every facet. From auctions, to parts suppliers, to dealers to speculators to new collectors etc... It has been explosive... and then you throw in a FREE MONEY bubble along with a crash and you have a very difficult EXCEL spread sheet to explain of auction prices etc.

    January collector car auctions are not a commodity like these article like to prop them up to be. It is not a pound of copper or an oz of gold. The pound of copper is the same year after year and is comparable (the pound and the quality, not the price) which means the only thing left to examine is the price and then you can chart its value year after year.

    January auctions are completely different. First off... You have had auction houses come and go. You have had auction houses taken on new kinds of cars. One example is Barret Jackson taking on the salon collection with reserves. Another is Russo and Steele doing a no reserve sunday. Another massive difference from this year to last year is the Ron Pratte collection sold. That was a very large collection that was added last year and had higher dollar cars on average. They also added several days to the auction. Hell barret jackson in the early 2000s was thursday through Sunday. They now open the doors sunday to sunday with auctions Tuesday through Sunday. It is simply not an apples to apples comparison.

    Moving on to the Gooding and RM auctions etc... There catelog of cars changes every year. Sometimes they have several Ferrari 250s and sometimes they don't have any. Look at the large presence of Porsches this year at Bonhams vs years past. The catelog is different every single year. What they have on offer is different every year. You know... Sometimes big big big cars just are not available to sell at auctions. Since Bonhams in 2014 had a GTO sell for over 30 million and Bonhams didn't have a car sell for 30 million in 2015 does that mean the collector car is crashing like a russian rocket on re-entry?

    NO!!!!!! It means they didn't have that expensive of a consignment.

    People need to do research and ASK WHY! Not read articles and regurgitate information. I know thats the world we live in since we have google at our finger tips now and we can all play expert. But real experts 1. will never call themselves experts 2. will never claim they know everything.

    These articles are written by click bate seekers. Otherwise they lose their position with the company or they lose advertisers if its on their own website.

    We have become a sensationalized society since september 11th. The news has conditioned many to only pay attention to large events. Terror level RED and crashing and booming. It has seeped into the backs of many peoples heads and created what I call the market trend of what I call...

    Markets on Fire or Fire sale mentality!

    Everything either has to be on fire or it has to be part of a fire sale and prices are plumetting. Otherwise... people don't read or click. In some cases I don't think people feel comfortable. It seems that a segment of the population loves the big rises and drops... they can't fathom a steady market anymore. It has to run up or crash down. Its ridiculous.

    Ok getting off the soap box.

    Thanks for letting me vent!!!

    Off to the airshow!

    Support our troops!
     
  24. boxerman

    boxerman F1 World Champ
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    Yeah well forget about auctions. Fact is we see lots and lots of inventory looking for sales, and 6 months ago there were some truly extreme ask prices, based on the diea prices would continue to rise.

    Now we see a very wide spead between realistic asks and fantasy asks(and I know cars so am comparing like for like in terms of condtition). The mnarket in genral has stopped rising, and some people want to sell. The question is whether this is a 5% correction breather or something larger.

    Those who know cars and saw prices rise 500% coupled with otherwise pedestrian cars hit big numbers see potential negative volatility. Its not like we have not seen this all before, big runups and gas escaping from the system.

    Yaeh yeah now its different because people are not buying on credit blah blah. And yes with the expansion in money supply cars as an asett have maybe not really appreciated that much in real terms. But markets overshoot, always and then correct, the only question is when and by how much. Your mileage may vary.
     
  25. energy88

    energy88 F1 World Champ
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    It would be interesting to see a research article on car auctions since 1990 that might cover how many auctions were conducted per year, how many players in the business, how many cars sold/not sold, and average price per vehicle with as much detail by segment as possible. Does anybody know of such research?
     

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