The pundits didn’t wait for the Monterey Car Week auctions to end before weighing in with banshee-like wails of market distress.
“Saturday night auctions fail to meet 2015 levels” The Los Angeles Times headlined before the Gooding auction on Sunday.
Bloomberg weighed in on Monday, “Monterey Auctions Continue to Slide after 2014 Peak.”
“Next month, if these trends continue, Cobras will be free!” (Okay, I made that one up.)
If you were glued to your smartphone and viewed the old-car world through the tank-driver-slit of an “instant analyst,” the collector car market had cratered and the dark forces of the apocalypse were at hand.
But there’s more than one way to define a successful Monterey Car Week.
What really matters
Over 70,000 enthusiasts attended the Rolex Monterey Motorsports Reunion races at Mazda Raceway Laguna Seca. Pebble Beach achieved an attendance of 15,000. Between Concorso Italiano, The Quail, Legends of the Autobahn, Porsche Werks Reunion, the Motorworks Revival “Jet Party” and other car shows and gatherings, the total number of car fanatics in Monterey surely totaled well over 100,000. I would estimate that fewer than 5,000 of those gearheads attended an auction during Monterey Car Week.
Twenty-nine years ago, when Sports Car Market was founded, we were the only publication providing a thoughtful and in-depth look at the collector car market. There were no televised collector car auctions, and the Internet barely existed.
Today, there is no shortage of “instant” information. The auction houses themselves generally release complete results in less than 24 hours. There are websites that track results as they happen. Third parties have created market indices, and market observers post daily — if not hourly — market commentary.
This surfeit of information, delivered quickly and without reflection, is not a substitute for a considered interpretation of a week as full of collector car events as the August 15 to 21 Monterey Car Week.
Yes, the auction totals were down this year in Monterey. 2014 had the highest sales yet, at $463m, with a drop to $396m in 2015, and a further drop this year to $343m.
But before you set your hair on fire and donate your Ferrari 166 Inter to the local Salvation Army resale depot, consider this: In 2012, the Monterey auctions totaled just $257m. This year’s totals represent a 33% increase over that in just four years, which is healthy by any measurement.
Are this year’s results a harbinger of a precipitous slide in collector car prices? I think not. I attended auctions in 1989 and 1990, when prices of Daytona coupes plummeted from $500,000 to under $100,000, and Boxers went from $250,000 to $85,000 — if you could even find anyone who would buy one.
I didn’t sense any distress among sellers this year. If a Daytona coupe that had soared from $500k to $900k over the past four years was hammered sold for a mere $715k, was that such a disaster?
There were other elements in play this year that help explain the drop in sales, and we need to take them into account in any comprehensive analysis of Monterey Car Week.
For example, because of construction at the Portola Hotel & Spa, RM Sotheby’s offered 50 fewer lots than normal. They could conservatively have added $15m to the totals.
Further, the highest-selling cars have a massive influence on overall sale results. Seven cars sold for more than $10m, and they were responsible for nearly one-third of the final amount.
There simply weren’t a lot of truly great, important cars with both unblemished and remarkable histories available this year. Notable were the spectacular, Le Mans-winning D-type that brought $21.8m and the historically significant “first Cobra” that brought $13.8m, both sold by RM Sotheby’s. Gooding got $18.2m for their stellar LWB Cal Spyder.
If there had been another two or three exceptional cars offered that had each brought $15m to $20m, there would have been no difference between the results of 2016 and 2015.
Gamblers welcome here
The collector car market, like any market, is a thinly disguised gambling field, with buyers and sellers placing bets on what they think will go up or down, or is underpriced or overpriced in today’s and tomorrow’s market.
For the 95,000 enthusiasts who did not attend the auctions, I would posit that Monterey Car Week was once again an unqualified success. Marques were celebrated, and friendships with other enthusiasts were renewed in this gasoline-fueled Chautauqua. The world’s love of classic cars is alive and well.
For those whose time in Monterey was centered on the auctions, there was a sense that the slight change in prices was simply an overdue phenomenon that was not unexpected. If you bought a Carrera RS at last year’s peak and were hoping to sell it for more this year, your ship left the harbor without you. Let’s hope you did better with your hedge fund.
If you’re in the old-car market for the long haul, then you’re simply watching the market in action.
It went up for a few years, it peaked, and now it has started a very slight backslide. The best cars will always sell easiest and for the most money. In a non-frothy market, the average cars and the undesirable models will drop the fastest. Whether it’s real estate, fine art or jewelry, the same rules apply.
This issue is full of thoughtful, reflective comments from our highly qualified auction analysts and reporters, who are watching the market every day of the year — not just during one week in August. ♦