News

How will the art market meltdown affect collector Ferrari cars?

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

  1. nis1973

    nis1973 Formula Junior

    Jan 19, 2013
    397
    NYC/CT
  2. FarEastFerrari

    FarEastFerrari Formula Junior

    Jan 27, 2014
    433
    Hong Kong, LA & NY
    Full Name:
    Thomas Choi
    The market for classic F cars have gone up significantly the past 4 years. It's not surprising that there is a pause and a slight pull back in the market especially given the current shape of the financial markets and global economy. People with money are being more cautious and not jumping into investing in collectables or luxury real estate. Thus the market for painting and properties have been negatively affected as well. The worst place to put your money now is in the bank because of zero or negative interest rates. In addition the new banking laws allow the banks to seize your money in the account for bail-ins if they fail. Your money in the account is not your money. Depositors today are now nothing but unsecured creditors to the banks. For eons, fine art, gold and real estate have been the foundation of stored wealth. Nothing that is happening these days will change that. So stop worrying about the price of your collectable Ferrari and just take it for that enjoyable ride. Dont worry about the future and enjoy what you have today.
     
  3. John B

    John B Formula 3
    Silver Subscribed

    May 27, 2003
    1,544
    NJ
  4. bitzman

    bitzman Formula 3

    Feb 15, 2008
    2,336
    Jag is starting second trip back into time to bring forth some million dollar babies (XKSS).Here prediction is made Mercedes and Porsche will follow but why not Ferrari too?

    The Trouble With Tributes - MyCarQuest.com

    The present confusion in art world caused by Warhol clones is cited as model of what will happen to vintage car world if other automaker follow Jag into the breech
     
  5. Kevin Rev'n

    Kevin Rev'n F1 World Champ
    Rossa Subscribed Owner

    Nov 29, 2009
    13,082
    Honolulu
    Full Name:
    Kevin
    Great discussion fodder. I like the idea that more of the rare cars might be around to acquire.
     
  6. Platini 289

    Platini 289 Karting

    Sep 21, 2015
    81
    Original condition - plenty of patina is where it's at. Only original once. The over restored glamour queens are exactly that. This would appear to be how the market now thinks, e.g. https://www.bonhams.com/auctions/23592/lot/206/
     
  7. 5000gt

    5000gt Karting

    Oct 8, 2015
    84
    It's a nice to see a well well used car such as this DB5 bring good money. Had the car been completely and correctly restored,would it have brought the same amount or more? I really don't know. I do prefer the patina over the restored look. There is nothing like the smell of old leather and patina is eye candy to me.
     
  8. stevewak

    stevewak Rookie

    Jul 31, 2006
    43
    UK
    Aston Martin is highly likely to build a further 25 DB4 GTs. Not road-registered:

    https://k500.com/story-item/aston-martin-to-announce-continuation-db4-gt
     
  9. stevewak

    stevewak Rookie

    Jul 31, 2006
    43
    UK
    The car was complete but in bad condition and I really don't think you'd want it as a 'preservation class car'. Also, the colour wasn't very nice - may or may not have been original colour (that was a green).

    It was a great opportunity to buy a rare (one of 65) complete, not molested or 'improved' DB5 Vantage and as it was an auction the price went mad. It was the one car Bonhams had the most interest on.

    If it were restored it would have been same price - just one of those things.
     
  10. roma1280

    roma1280 F1 Rookie
    Rossa Subscribed

    May 2, 2010
    3,275
    NYC, PalmBeach, Roma
    Full Name:
    Mark
    #185 roma1280, May 26, 2016
    Last edited by a moderator: Sep 7, 2017
    I'm not convinced about that. I have restored a DB5 and they are expensive to do really well. Hard to imagine that a car with a $400,000 resto would be worth the same.

    I drive the car around NYC all the time by the way, here is a picture of it in my parking spot last week. Fun seeing people's double takes at traffic lights on 6th avenue.
    Image Unavailable, Please Login
     
  11. stevewak

    stevewak Rookie

    Jul 31, 2006
    43
    UK
    The Bonhams Aston sale was always famous for mad prices paid for barn-finds, yet perfectly OK cars go for only a little more. This year was a bad sale thanks to a large number of cars from a single vendor with unrealistic estimates and none sold.

    For quality, look at the blue DB4 Convertible: £1m or so all in and a fabulous car, very rare, too. Around £500k below estimate.

    Your car looks good! Complete restoration in UK is £400k Aston Martin Works or £250k for someone equally professional.
     
  12. 5000gt

    5000gt Karting

    Oct 8, 2015
    84
    Bad ass car!
     
  13. John B

    John B Formula 3
    Silver Subscribed

    May 27, 2003
    1,544
    NJ
    That's beautiful!
     
  14. energy88

    energy88 F1 World Champ
    Rossa Subscribed

    Jan 21, 2012
    11,885
    Fredericksburg, VA & Sarasota, FL
    Full Name:
    John
    Michael Sheehan's latest email article "The Market Correction" sure throws cold water on the boom in the classic car market:

    The Market Correction
     
  15. roma1280

    roma1280 F1 Rookie
    Rossa Subscribed

    May 2, 2010
    3,275
    NYC, PalmBeach, Roma
    Full Name:
    Mark
    I think it's a good article quite frankly. No issue with the facts nor the conclusions. I don't know what the exact percentage of the correction is but it's healthy for the market.
     
  16. 19633500GT

    19633500GT F1 Veteran
    Rossa Subscribed

    Nov 9, 2010
    6,791
    Connecticut
    Full Name:
    Ken S
    I think it's well written, and hard to refute cold hard %'s and numbers, but I don't see the 'gloom and doom' part that so many see, simply for the fact that (as long as gasoline cars are legal!) demand for "vintage" will remain. Yes it will correct, and it will and has softened significantly, but it's just another wave in the market...oh well, let's all continue to enjoy vintage Ferrari's
     
  17. 5000gt

    5000gt Karting

    Oct 8, 2015
    84
    The Market Correction

    Actually it's not hard to refute, based on my calculations I don't see the 20 to 25% drop he is referring to.
    Let's take the prices of the Daytona from 2014 to 2016 and based on Mr. Sheehan's numbers, I see an increase and not a decrease. If you purchased in Euro then price did go up and not down. For U.S buyers prices were slightly down but not the 20 the 25% as stated. see average prices below.

    Daytona prces:

    1.3134 USD = 1 EUR
    Monterey 2014
    14821 at RM for $945k; 721k Euro
    16571 at RM for $963k; 735k Euro
    12691 at RM for $775k 591k Euro
    16931 at RM for $880k 671k Euro
    14229 Gooding for $627k; 479k Euro
    16943 Rick Cole $1,155k 881k Euro
    16565 Russo sold $732k. 559k Euro
    Average of $868k, 662k Euro


    1.12 USD= 1 EUR
    Scottsdale 2015
    16447 Gooding’s $699k 624k Euro
    12923 Bonham’s $748k, 680k Euro
    for an average of $723k. 645k Euro

    1.1213 USD= 1 EUR
    Monterey 2015,
    13361 RM for $1,045k; 933k Euro
    16927 RM for $792k; 707k Euro
    14191 Gooding’s for $770k; 687k Euro
    17607 Gooding’s for $715k 638k Euro
    14335 Bonham’s at $748k 667k Euro
    15757 a no-sale at Mecum
    Average of $814k, 727k Euro


    1.0834 USD =1 EUR
    Scottsdale 2016
    15437 RM sold for $710k, 657k Euro
    14819 RM $688k 637 Euro
    14219 Bonham’s $1,155k, 1069k Euro
    Average of $851k." 788k Euro


    250 PF Cab II prices:
    Mr. Sheehan wrote:
    "Based on this data set 250 PF Cab prices are indeed off app. 25%-30%"
    Again I don't see the drop he is referring to especially for Euro buyers.


    1.3134 USD = 1 EUR
    At Monterey in 2014 three no-story 250 PF Cabs crossed the block:
    250 PF Cab s/n 1817 sold for $2.1m at Gooding’s, 1.61 m Euro
    3807 sold for $2.2 at Rick Cole and 1.68 m Euro
    2441 sold for $2.25 at Mecum, 1.71 m Euro
    Average range $2.18m or 1.66 m Euro


    1.12 USD= 1 EUR
    Fast forward five months to Scottsdale 2015
    one 250 PF Cab II crossed the block with s/n 3633 selling for $1.7m at RM. 1.52 m Euro
    1.13 UD =1 EUR
    Only two months later at Amelia in 2015
    250 PF Cab sold for $2.1m or 1.85 m Euro
    Average $1.90 m, 1.69 m Euro


    1.1213 USD= 1 EUR
    Five months later, at Monterey 2015,
    s/n 2533 sold for $1.8m, $1.61 m Euro
    s/n 2153 sold for $1.65m at RM, $1.47 m Euro
    Average $1.725 m, Average 1.54m Euro


    Mr. Sheehan wrote:
    "Ferraris are almost always priced in USD so the Europeans, the Brits, the Aussis and Canadians have left the ever-higher Enzo-Era Ferrari price party."

    I totally disagree with Mr. Sheehan. I believe the cars have become more expensive for U.S buyers due mostly to the devaluation of the Euro VS $.
    Euro buyers are experiencing the opposite.



    Mr. Sheehan wrote:

    "A Gen Xer who grew up with the poster of a F40 or an Enzo on his wall isn’t going to be nearly as interested in a 45-year-old car that’s far slower than the BMW SUV he just bought his wife."
    Again I disagree with Mr. Sheehan.
    I am 40 years old and in the 80s I was infatuated by the F40,308, Testarossa, Coutach to name a few. I have driven many 80-90s Ferrari and owned some and same goes for the 60's Ferrari I driven most of them from the 250,275gtb/4, 330gtc, 330gts, 365gtb, Daytona and bases on my experience I'd rather own an Enzo era Ferrari.
    I could careless about a BMW SUV being faster than a Lusso or a 330gtc. It's not about how fast you get there but how you get there. There is nothing like the splendid lines of a Lusso or the sporty look of a 275 or sexiness and brutality of a Daytona. The music resonating from the tailpipes, the pure lines, the smell, gave these cars a soul something that the newer cars have never been able to replicate.



    Mr. Sheehan wrote:
    "Moving to the Fiat-era Ferraris, the Boxers followed the same price curve as the Enzo-era cars and peaked in 2014 while the Testarossas, the 308s and 328s flat-lined until they doubled in 2015 in only a year. Alas, they too are now on their way down the price ladder. As for the Montezemolo-era Ferraris, the 550s and 575s, like the 308s and Testarossas, doubled in 2015 and are now on the same price ladder down. The irony is that these newer Ferraris are far better cars than the Enzo-era Ferraris: better built, more reliable, faster, safer, better-handling. If you’re looking to buy a Ferrari to drive, rather than invest in, thanks to the recent price corrections the Fiat-era Ferraris are again becoming buyer-friendly."


    "To quote the legendary economist J.K. Galbraith, “The only function of economic forecasting is to make astrology look respectable”. Having said that, my crystal ball tends to short circuit from time to time. I’ve been wrong before, I’ll be wrong in the future. However, centuries of economic history always prove that booms always end and busts eventually turn around. In every boom everyone wants to think this time it’s different, the good times will go on forever. Alas, the party always ends."

    I agree that for every boom there is a bust but I also believe that classic cars in general were undervalued for so many years.
    Mr. Kidston once said. "it's not that the cars that have gone up in value, but the value of money that has gone down!"
    No one knows where the market is heading next but I really don't care,I buy what I like and enjoy all my cars regardless if their value go up or down.
     
  18. 166&456

    166&456 Formula 3

    Jul 13, 2010
    1,720
    Amsterdam
    Very well written analysis, and I totally agree that it is not the value of the cars correcting, but the (relative) dollar appreciation that makes for most of the changes. Look at gold prices, same story. I do expect that trend to continue by the way, so in dollar terms the prices may seemingly go lower, or (more likely) remain stabilised for some time. That effect is (and has always been) temporary until debasement has caught up again.
    Most of us know, as a trader or salesman, you make your money when you buy things, not when selling them. Mr Sheehan just might be looking to buy your cars at the moment. :)
    Looking at his website and seeing those two 550's next to the 599, despite the apple/oranges comparison, the 550's look like a no-brainer bargain to me. https://ferraris-online.com/pages/sell.php
     
  19. John B

    John B Formula 3
    Silver Subscribed

    May 27, 2003
    1,544
    NJ
    #194 John B, May 31, 2016
    Last edited by a moderator: Sep 7, 2017
    Around 2003 I set out in earnest to look for a 275 GTB/4. I recall looking at a nice one for what felt like a somewhat lofty price of $440k and was organizing a PPI when someone snagged it in front of me (probably one of you guys :)). Well, I watched that ship sail and never saw a nice one that "cheap" again. Coincidentally, I had purchased gold futures around the same time at $440/oz and noted anecdotally that a 275/GTB4 was worth the equivalent of 1,000 oz of gold. Later, around 2006 275 GTB/4's were around $640k while gold was about $660/oz. In 2009 275 GTB/4's were $960k and gold was $980/oz. Around that time, I became intrigued with the relationship and dug out all the past 275 GTB/4 prices I could find from the very interesting old want ad threads on this forum and paired them with spot gold prices at the time. I found a reasonably stable relationship in prior periods with the exception of the "bubble" in Ferrari prices following the death of Enzo in 1988. During that "Bubble" 275 GTB/4 prices got about 300% ahead of gold, only to decline and resume the relationship about five years later. This discussion of vintage Ferrari values versus the dollar and gold prompted me to dig out my old spreadsheet and update it. I used Hagerty Values for a #2 275 GTB/4 paired with spot gold prices from the same month for the recently updated data.

    Spot gold is $1,214/oz this morning.
    Draw your own conclusions...


    (Data / spreadsheet are available upon request by pm)
    Image Unavailable, Please Login
     
  20. energy88

    energy88 F1 World Champ
    Rossa Subscribed

    Jan 21, 2012
    11,885
    Fredericksburg, VA & Sarasota, FL
    Full Name:
    John
    Yes! Something is getting ready to happen. Either the blue line is getting ready to fall or the red line is getting ready to rise. There is an obscure comparison function on Hagerty graphically comparing gold price and various stock indices with the 275 GTB/4. Your analysis and the Hagerty results are in excellent agreement. Interestingly, the stock indices of all types have performed poorly against the 275 GTB/4. Gold has done best.

    There is an old saying among gold bugs that "an ounce of gold has always been able to buy a nice mens suit."

    I believe John_B's work has coined another new gold truism: "1,000 ounces of gold can usually buy a nice 275 GTB/4."
     
  21. 166&456

    166&456 Formula 3

    Jul 13, 2010
    1,720
    Amsterdam
    #196 166&456, May 31, 2016
    Last edited: May 31, 2016
    Good one John B!
    My gold price was meant as an illustration of relatively short-term asset price influences by exchange rate differences. Longer term, there are many other factors. We could start a whole riot on market mechanics, inflation/deflation, quantative easing, real economy, asset/cash hoarding etc but better another day. :)

    The graph seems extended for the 275, doesn't it. But it is only a double from the high in 1990.
    You could say that the gold price peaks before the 275's from the first peak, but the 2007 peak in the 275 precedes a peak in gold (unless you want to count the little blip in the red graph). So what precedes what, or is there no correlation, other than base money increases? There could be some or none.
    Predictive value, there is something to be said for blue down red up but also for both up in a last bull market, or both down. I would not buy gold or sell my Ferrari on this, well perhaps if I had a 275 - but then, a 275 is a lot harder to find than 1000 ounces of gold.
    Such graphs you see a lot in stock market analysis where people see correlations everywhere, people go bankrupt betting on simple graphs like this. Not unlike the IPCC's temperature vs CO2 going back thousands of years. It shows two lines going in similar directions but that is still a far cry from correlation, let alone causation.
     
  22. Tenney

    Tenney F1 Rookie
    Consultant

    Feb 21, 2001
    3,492
    What's 1.75M in 1989 dollars, today?
     
  23. 5000gt

    5000gt Karting

    Oct 8, 2015
    84
    Interesting analysis! But what I find more interesting is the fact that a 275gtb/4 weighs approximately 1200 kg which is around 42000 Oz. Assuming a decent 275 is worth $3.0 m, the price for an oz of 275 would be $71! Considerably less than gold which is far more abundant. So I'll let you draw your own conclusions on this one...
     
  24. subirg

    subirg F1 Rookie

    Dec 19, 2003
    3,581
    Cheshire
  25. Platini 289

    Platini 289 Karting

    Sep 21, 2015
    81
    14 Not sold, 4 sold
     

Share This Page