Crystal balls, mea culpas and the market
Volume 46 Issue 5
Feb 28, 2021
We all make mistakes, this time Jim comes clean.
Fortunately, I don’t get it wrong very often, or at least I don’t get called out for many mistakes in these pages.
By and large I strive for accurate reporting when providing history or auction reports to you.
My opinions are mine and mine alone. So, when I pontificate on the market and where I think it is headed and I get it wrong, well, I hope you realize that my crystal ball has not always been as clear as I would like.
If it was, I would have foreseen each and every move the market has made in the last forty years or so and I would not be here writing but living on some tropical island paid for with the profits of foresight.
That said, I do try to anticipate trends in the market and bring those trends to you. Usually, it is the passage of time that allows us to look back and determine when a market has shifted.
A couple of issues ago, 4603, to be exact, I reported on several auctions from Kissimmee, Florida, and Scottsdale, Arizona. There were two cars I reported on that were not true.
The first one was an Enzo offered at RM Sotheby’s. It was yellow and appeared to be a great car. Yellow with cuoio interior. I claimed this car had sold. It did not. It was bid to $2.2 million which is a price I thought it could have sold at.
Supercars like the Enzo had been fairly hot, and I am surprised it was not bid a bit higher. I thought the estimate range was reasonable.
I had watched the RM Sotheby’s auction live through the internet and was trying to keep up with the bidding. One of the downsides of internet watching is not being able to get a feel of the crowd in the room.
I think auctions are much more exciting live.
The hammer fell and I heard the price and assumed it had sold. The owner, who is a subscriber, contacted me to set me straight. His point of view was, he thought the car should have brought more and he is allowed to have that opinion. He loves the car, loves the color, and generally enjoys the experience of owning an Enzo. More power to him.
While the car didn’t sell, and the owner was not willing to compromise on the price, the event does tell us something of the state of the market.
The market has been in slow decline over the last several years. Six years to be exact. The market peaked in 2014 and has been in decline since.
Several models have experienced small booms since that time. 308s, 348s, 355s all experienced a bump, as did Boxers and Testarossas. Supercars were also hot.
It would now appear all models have settled down and I don’t see any Ferrari setting the world on fire.
The market is always in some state of flux. The principles that drive the market, any market, are the same. Supply and demand. Fortunately, from 2014 to today there have not been a mass of cars coming to market. Sales have been steady, and cars have found new homes.
If too many Ferraris flood the market, prices will drop. Ferrari corporate understands this philosophy all too well.
Conversely, if demand rises with too few cars, the market rises. You only need to look at the current housing market to see those forces at work.
There are a few caveats. Good cars, I mean exceptional cars, will always bring a premium. Collectors want to have the best example with the lowest mileage in perfect condition with impeccable credentials.
When looking at the market in general we tend to look at these examples as the ones setting the market.
Yes, one Lusso, owned by Steve McQueen, set into motion a multi-year rise in all Ferrari prices. But the real market is made up of good, average, or above average Ferraris.
Watching this segment reveals the direction of the market in general. The ‘tell’ is when an average car gets exceptional results.
Which brings me to my other mea culpa. RM Sotheby’s also sold a 550 Maranello. I looked at the photos online and watched the bidding. I reported the sale at $120,000, which seemed reasonable for a 550 Maranello in basic red with tan.
No, it sold for $257,600. As I was told by another subscriber, it was an exceptional example. Perfect in every way. I’m not sure I see it; yeah, it was nice, but not rare. Especially with 4,406 miles. Yes, it was a manual, but then again, they all are.
I can’t be sure because my crystal ball is still a bit cloudy, but are we seeing the beginning of another turn in the market? I think I may need to pay a little more attention.