is the bubble due to burst?

The music is already set to stop. The brokers took away all of the cars. Prices are no longer real. Now it is just a matter of time before the market says "enough is enough." Once they start to feel the tremors, they will begin to unload out of necessity. This will cause a sharp decline but it won't be major. The market will level off after that phase ends. That's my prediction. Then it's anyone's guess as to where it goes from there.

 

I haven't followed all of this as this thread has gone on for what seems like forever

I can't believe there's still talk on this subject

Hasn't anyone noticed that the market has leveled off already?

All this talk of busting

Truthbetold the busts of the past were concurrent with downturns in the economy, stock market and seriously rough times. Is it a wonder the car market went with them?

But now we are in a time of recovery. It's been years since Ferrari prices really moved while real estate and stocks recovered and grew. So the last few years included Ferrari prices that finally caught up to the cost of money after all this time since 1990.

The markets are Good and improving- Ferrari prices have caught up and leveled off now.

Sure some models were tugged upward by a group of sought after models, and those prices may correct somewhat. But you're never going to see true classics go down.

What you see now is what will be. Prices have leveled off. There isn't a bust coming now or anytime soon unless the economy falters.

So unless everything else busts, forget about waiting for a Ferrari market bust to prove you're right or make your move and steal a classic.

Again, some cars may have a certain artificial component of their prices and these may correct somewhat, but overall the market has leveled and these are the prices.

And with the slight artificial component of some cars that may correct downward, there are some like the Daytona, that will likely correct upward somewhat.

There are a plethora of factors that affect all this, but if you have your finger on the pulse of the market, you ought to be able to feel and know what's coming...

 

Moe, no offense, but what world are you in that the prices are leveled off? In the past what... month?

Never say "never" to "true classics" going down.

The prices in this market, like some other markets, look entirely out of sync and driven by speculation. In virtually any historical market that had a large proportion of activity driven by speculation and flipping, the market tanked afterwards.

Some classics will rebound... but it may take years. The timing is the hard part to call but the bigger they are, the harder they fall.

The most at risk are the ones that are plainly absurd (manual tranny modern era / post Enzo era cars that are anything but classic and that traded at one half their value just 12 months ago...) Vintage market is obviously at risk...

I seriously have a hard time understanding how some people seem to not see this... I've seen it, and called it, during multiple past bubbles. Every single time, there are people who think "this time is different" for a bunch of reasons...

 

Couldn't have said it better. The biggest fall will be the Dino. Mark my words. That baby is going to tumble to the floor quicker than a prom dress. The price is so out of touch with reality, it isn't even funny

 

Not sure as usual that i can agree, Brad ..... another year has gone past and we are still on the same ride, and lots of great write up's in the media regarding this model in particular. Also now more serious talk of the new Dino being launched in 2-3 years time, which can surely only boost the prices of the original , as enthusiasts look to 'make the set'...... bound to happen.

I'm a realist and certainly can't disagree , that as with any market , there will be ups and downs on the way, but can you honestly with a straight face on this forum, state that in 5-6 years from now (lets call it the medium to long term), that this car will be worth less than it is now??
I've said it before, but why would any one F model suffer more than most, in this supposed future downturn? ..... surely all models would be affected, not just the arguably most beautiful, iconic and influential Ferrari car design ,ever produced .
Regarding the price being out of touch with reality, the average sales price of a 246, is now little more than the price of a high spec'd current F model (c.400k us) ..... what's so out of touch about that, exactly ...... ?? Or would you say that a 458/488/F12 is a better value proposition, than a true Enzo era car?

BR,
Jez

 

Brad is right, the Dino will fall hard. I have been looking at Dino's for a while and it seems to me that the only buyers are the dealers who buy from auction and from each other, then inflate the prices hoping to hook an end user. Then they all reset their prices upwards. It is a market that is dealer led, not buyer led and a lot of the cars are on SOR. If, when the market changes the buyers who only buy because of price appreciation will disappear and the prices will tumble.
Just my humble opinion.

 

My favorite people are the:

"You have to buy now!!! The market is gonna stay hot FOREVARRRR!!! Prices are just gonna keep going up, up, up!".......

Riiiiiight, just like every other speculator "bubble" over the last hundred years

Always remember, it's not a matter of "if" but a matter of "when"........please be smart people, you don't wanna be that "idiot" stuck with the car keys (to your overinflated Ferrari) in your hand when the music eventually stops.

*If you don't think the current "craze" is mostly driven by speculator/dealers, just for a small sample size, check out all the listings on EBay. All of sudden just about every single listing is of these "high end" dealers with their seemingly endless supply of classic/modern Ferraris at ridiculously over inflated prices lol. All of sudden dealers have all of the Ferraris for everybody to relieve themselves of their cash for. Amazing. Better hurry up and pay $150,000 for that 308! And $200,000 for that TR! I mean come on now! These prices are gonna be double that soon!.....right?.....

God, enough is enough.

 

Interesting thought , that the current trend is being led by dealers. For sure they are involved, but hasnt this always been the case? Certainly in Europe and the UK, i dont see evidence of the same old cars be churned. I also dont hear that people are buying cars on extended credit .....but i do hear that primarily cars are being bought with hard cash, and this generally suggests longer term ownership and not flipping.
None of the arguments i have heard so far explain why only certain models of Ferrari would be affected..... i think my view that, if or when the time does come, that all models will be affected , is more reasonable ...... in which case fantastic.... as it means that more great models of car perhaps come back within reach!

I do think that exclusivity and rarity play a large part in any discussion of this nature, and the fact remains that cars that are built in reletively limited number , and or have seen fairly high attrition rates , will always command a market premium.

We have to be aware that there is also an element on this forum that are actively willing the market to drop as they have 'missed the boat', or have perhaps sold a particular model too early and are now expressing sour grapes!!

BR,
Jez

 

A lot of what you guys say is true and my observations are not absolute in any way whatsoever other than a vast generalization. Each model may react differently.

But bear in mind that the true classics are big money and the new cars are getting pricey.

That means that for the guys who want to own an F car and really can't pay 3 to 500k are competing for the not so older cars and driving up the prices.

Don't forget Ferrari is headed to being as Porsche was in its earlier days as they head to larger production runs and more mass worldwide appeal.

Owning a Ferrari will always be special, but maybe not as exclusive as it once was.

Ferrari was named the strongest brand name out there this past year... and the new chairman is positioning the company to ever expand. They have a lot to build on and they're going to work it

 

+1 Moe ..... supply and demand at work. People will always dream of driving such cars. Many see this type of vehicle as a relatively secure as well as fun place to put their savings once kids and mortgage are off their hands, especially in todays financial market..... what else can offer this??

 

Exactly, a price being led 95 percent by dealers is not a market price, it is a dealer price. It is artificial by nature. The dealers don't buy those cars to keep, they buy to flip. The market buys the cars to hold, while only a tiny segment will try to flip. It was a natural shift up until the over-speculation began, and now it finds itself where it is. I know the reason why people make excuses as to why the price will hold, or why they think it will be different this time around compared to all of the other times. It's the passion for the brand. I'm guilty of it too at times. But you have to use your head and not listen to the little kid inside of you that we all still have

I've heard people scratching their heads over those dino prices and in general most people don't understand why it is where it is. I made a bet with somebody on here about a 1 year ago that the dinos will drop back to the 180-220k range. The guy would not make the bet with me. I honestly believe that's where they're headed. A Dino is not worth 330 GTC money, NO way. It was even equal to F40 money for a bit there before the F40 went through the roof.

 

The answer is No. Being involved is not the same as cornering the market/inflating prices.

When I shopped for my TR back in 2012/13 there were HARDLY any dealers with them in stock. They seemed to want nothing to do with them. The listings were almost all private party. Take a look now

 

If only restoration costs for Dinos would go down.
$200k is a number that is regularly seen to Restore a Dino.
How many sellers who have paid this will be in a situation to be forced to sell at a loss?
http://www.ferrarichat.com/forum/206-246/399049-restoration-costs-3.html

Private Party sale on asking price of $425k, dealers are not the only ones buying
http://www.ferrarichat.com/forum/206-246/70949-dino-246-gt-gts-values-11.html

 

for you naysayers, are you saying the car market is idiosyncratic? ie, stocks, real estate, bonds will do fine but cars will pop? I can assure you that wont happen. I think this is where the bubble popping camp falls short - what are you guys actually saying? Are you saying QE was the root of all evil and ultimately markets will fail again? are you saying the world is going to 2008 again? if ur saying that then yes cars cld depreciate. I can guarantee you no one who can do simple math is going to sell a car and buy a 10yr treasury at 2.3 and most rational people are not aggressively allocating to equities after a 6 yr bull market. last time I checked my rich friends already own 2 or 3 houses so if they add another they either have the cash or they'll trade one for one.

So if u wanna say we are going back to 2008, fine. to say that the world will stay in tact but cars specifically will go back to 2008 prices is just not rational.

 

I think you should consider a different perspective.
You are basically calling me an "idiot". If I have, or some one has the money to buy what they want, repeat, want, I'm not an idiot. That is like saying anyone who buys a new Ferrari is an idiot because we all know the price of new will crash significantly. Are we idiots because we can and want what we want. Not all of give a $%$#@ about investment on a car, it's because we love the car and so be it that life only now allow's us to buy.
I want a 360 "me idiot", don't care if the price is down or up, why should I speculate, waste my time guessing the "right time". Who cares. If it drops 50k in five years, can't put a price on the enjoyment of driving a Ferrari. It will be a great 5 years.

Regarding dealers, they at any given time have what, collectively 10?20? testarossa's for sale? That does not determine market value, it's just a business. If you want to buy my TR bring CASH. Dealers get a premium because the have a business, overhead, liability and they can finance. They should get a premium, we all know private treaty will be less. I don't know what anyone here does for a living, doesn't matter. Look in the mirror before you throw stones at dealers, no I'm not a dealer, but I bet your business or job somehow is buy low sell high. From realty to coffee to gold, are we all idiots because we paid a high price for a starbuck coffee that we could have made at home for 15 cents?

 

Buy what you like and can afford and let the market do what it will.

 

well said

 

Coffee at home is circa $.95 per shot...

 

Agree.....

 

Out of curiosity, for people claiming the Dino is going to pop first, what price range are you saying it is going to go back to?

 

180-220k

 

I don't see this happening anytime soon unless there is a massive market correction. For the market to collapse, people will have to run from the market. Sure there are some people are buying for investment, but not most I know.

I have seen a good bit of Dino's change hands over the last year. Some were transactions that I couldn't believe. Some were dumb. Other than a dealer, I don't know of any of the transaction where the buyer was buying for "Financial Investment". I also know that a good number of people were buying with the idea of keeping the car for a good bit.

With the craziness going on with stick shift cars pricing, I could see the run to get while the getting is good. Even with the high numbers of Dino's at the auctions, the market has held. I would go so far to say there have been less Dino transactions in the last couple of years than in years prior.

At the end of the day, whether an end consumer or a dealer, you have to have willing seller's. There is a huge shortage of seller's. That would have to change before any correction could take place.

The problem with seller's is generally the "what do I want to buy instead of ..." scenario. Everything has changed so much, why even bother selling.

DO you know of any seller's looking to let go of their Dino?

Shawn

 

Silly questions:

Have any of the guys that are saying the bubble will burst owned Ferraris, especially vintage ones?

Those calling out price ranges; what is your default condition for your price targets?

Regards,

Art S.

PS. I think there may be some stagnation or a correction coming but it will not be uniform. The only reason i'd consider selling is if i need the money or i feel i will not recover my health to the point that I can drive it again.

 

Nobody has to run. In Order For This To happen. The market will become flooded with the dealer cars, which will begin to change hands at a substantially lower cost. At the at point some people will run or refrain from buying. While the people that will begin buying will buy a at lower price, word will spread. What is so hard to u derstand about this? Economy 101 baby

 

I do know of someone looking to let go of both his Dino's plus a 308 as well as a few other cars. Separately, a good friend of mine works for a prominent classic car company in London where I often visit. A lot of potential buyers are looking for investment potential in the cars and expect them to increase in value. I don't think they would be interested otherwise. The other interesting thing is that everything is available. You want a 275 GTB? no problem, we have three. You want a Dino? we have five. Want a Daytona? what colour? I have an interest in modern cars and have been told that there are no less than five Mclaren F1's being offered around for sale at the moment. Yes, my friend sells cars but a lot stick around for a long time. Their policy is to price high and let the market come to them. So far, so good.