What drove the 1989 boom?

just like today there were more people with the means to acquire these cars than there were actual cars!i can recall many clients had admired a particular model in their youth like a Daytona,Dino or 330 gts.they were readers of road and track and were true car guys that now could afford the cars they dreamed of ..then there were those cocky quick buck investor types who had no clue about Enzo Ferrari or what these cars represented.they only knew from the gossip that these cars had major investment potential in addition to an instant prestige ticket for events such as Pebble,the Cavallino etc..a vintage Ferrari was what everybody wanted even if they barely could drive a stick shift and for sure didnt have the skills to drive them at speed.the ferrari fever ever spread to the basic 328's and Testarossas where prices quickly doubled for cars that were still being produced!!iand yes fortunes were made....and lost.....but it was quite a fun ride while it lasted.....

 

G R E E D ...

 

Most cars in the 80's were junk with the exception of the Alfa GTV 6, Ferrari TR and Lotus most were ugly as well. Speculation went crazy due to available credit in Japan and the US. Stock market crashed and that was the end of it for a while. Get ready for another crash you ain't seen nothing yet. Lots of coming bank failures and comerical real estate is about to tank. Home equity loans have dried up which will hurt mid line cars and muscle cars.

 

+1

Same thing that happened to muscle cars more recently, and real estate, come to think of it...

 

Japanese and European economy and markets were the major factors.

 

All of the above plus, for Ferrari specifically, the death of Enzo Ferrari in August 1988 provided an extra propulsion of Ferrari prices to very high levels that lasted until the peak in 1990.

 

As far as specifics, as I recall, Gerald Roush of Ferrari Market Letter (this was pre-internet) reported that numerous collectors wanted to purchase Ferrari Daytona Spiders and couldn't find any available for sale. That is, until someone was willing to pay something like $75k for one, a large price increase at the time. Mr Roush reported that "prices are on the rise", and 275's quickly also jumped in price. And the price race and speculation was on!

 

Was just wondering if you knew Roush from FAF in Georgia and what happened to him ?? Met him I believe in 74 @ purchasing my first Ferrai from FAF.

Gary

 

I purchased parts from FAF in the '80s, but don't recall anyone named Roush there. I just may not be aware, though. I've never met Gerald Roush, but I believe I spoke with him on the phone once many years ago.

 

As I recall the Japanese econmy was going balls-out and a lot of Ferraris (and others) were going to collectors there.

 

yes lots went to japan and lots came back to america after the japanese economy drop...but many of the cars stayed right here in america until this recent rise in the values.now its boom time for old v-12 cars but the difference this time is that only the rarest of the rare or top quality v-12 cars are pulling the big numbers.

 

Roger that!

The Japanese were buying everything not just Ferraris.

They drove booms in many areas and countries.

 

Gerald Roush is still very active with the Ferrari Market Letter. There is still a print version of FML and an on-line one as well. While there are a lot more places to get information on the vintage cars these days and that information is easier than ever to access, Gerald is still one of THE recognized authorities on the vintage cars and a genuine, generous person as well.

 

It is very interesting as alot of the scenarios above have similar answers.
Namely the higher prices were caused by circumstances similar to the relatively current economic situation. The crash which followed there after was caused by circumstances that most of the world is now in. Interesting to know who has there car on the market now. Tomorrow is going to be to late.
It is ironic that many will sit back later and say "I saw that coming", but probably, like myself did naff all about it.

 

"Ferrari's introduction of a completely new unibody car, (the 348) set off a record setting thirst for exotic cars worldwide. It was not until the collapse of the secondary markets that this bull market ended a few years later." (from 'History of the Ferrari' by Tracy et al...).
BT

 

Il Commendatore's death .
he died in 1988 ... and the madness begun .

some japanese collector bought a GTO for + $ 10 M usd back in 1989

a few years later he sold it for $4M usd

 

yup and according to well informed sources just a few weeks ago one changed hands for 30 MILLION..

 

wasn't it due to the market crash of 87 and that people were looking for tangible assets like cars & fine art? & that enzo's death added to that?
Kevin S.

 

Gerald was one of the founders of FAF when they were mainly a mail order parts business. John Apen and Eweing (sp?) Hunter were the other principals. Gerald left ca 1975-6 to start FML

Gerald is a historian by training and a real authority, not to mention good guy, on this stuff.

 

+1 they pushed up RE in Hawaii and Manhattan (IIRC), all over the Pacific Rim. Also caused a bubble in the art market.

 

Don't forget the "Greater Fool" theory. Some people were buying Ferraris simply because they were appreciating so rapidly. I had real estate agents in Boulder asking how they too could buy one (even though they knew nothing about them) so that they could resell them for a profit.

I met a retired developer from Ohio at one of the auctions during that time. He had high end Ferraris he had purchased with his retirement money plus bank loans. He had $4M of his own cash plus $4M in bank money in $8M "worth" of cars. He held through the crash, after which the $8M "worth" of cars was then worth $2M. You do the math.

 

That's my understanding too. Actually, I still have a large shelf full of FML issues from '70's thru '90's from my off-and-on subscription to FML over the years.

 

The word on the street, at the time, was that a certain gentlemen in Oregon who shall rename unnamed (not RT), was responsible for attempting to corner the market on these cars and then drive the price up. I never was able to verify this. Anybody have more info?

 

Recently at a Muscle car show in Charlotte. Entire NASCAR track full of beautifully restored Mustangs, Hemis, Camaros etc. that only a few years ago had $50,000-$70,000 plus price tags now with 30k OBO written on the windshield.

These things have 100k in weekend warrior labor in 'em.