These price increases are truly rediculous

Way too much liquidity in the economy. Christies auction house over the weekend sold a record $1Billion dollars worth of art last weekend ......That's billion with a "B" Ocean and beachfront homes and penthouses in NYC are going for record sales numbers. Muscle cars have been out of control for at least the last couple of years. I saw a Pontiac GTO that sold for $65K last year go under the hammer yesterday for $125K and a 60 Vette for $135K. La Ferrari's have doubled from an original $1.5 Million dollar price tag in the last few months to almost $2.5 Million. Prices for classic Ferraris have gone completely surreal and increased prices are starting to trickle down to the more modern Ferrari"s. prices for 308's/328's / TR's /550's /575's / 355's have all started to see increased value. Prices for 430 Scuds have really come alive. 599 GTO's which originally sold for around $450/500k are being sole for between $700K and $800K depending on milage and options. It's a bubble and its going to burst. There is a saying in the stock market when people are yelling you best be selling. No one wants to be looking for a chair to sit on when the music stops playing.

 

Agree. For $1.6M, I wouldn't consider anything other than a vintage/classic Ferrari (or Porsche).

Huge bubble on the modern stuff. Unfortunately there aren't any "bargains" out there right now, IMHO.

 

Yes, clearly a bubble. When it will end... who knows.

It's across brands and asset classes. I personally think it's across generations too (though on a "relative value / sustainability" basis, worse for the newer stuff).

The more justification we see for these prices, the stronger the signal that we're pushing the peaks.

 

There is an interesting thread here http://www.ferrarichat.com/forum/vintage-ferrari-market/395802-bubble-due-burst-64.html

If you haven't read it... check it out...

The crazy thing is it was started in 13.

Now I am chicken little and the sky is always falling... but I just realized people have been saying it since 13.

Some of this stuff is truly insane though. 993 turbos for 200k with 30k miles? Really? I love the car... but come on... that car was 90k a year ago and before that 75k

I can see the swings on old stuff, but the modern stuff... 6 speed 599 for 600. 6 speed lp640 selling for somewhere around 300... 575 6 speed for 240 wholesale... 512m for 500k?

Its all too quick. They are all great cars in there own way, and one day I can see those cars at those values... but it just doesn't smell right

 

A lot of unifoirmed money coming into the car market and buying off a checklist.

 

[sarcasm] It is not that they are overpriced now, it is that they were underpriced so badly in the past...[/sarcasm]

http://www.ferrarichat.com/forum/general-automotive-discussion/450912-bubble-value-cars.html

Perhaps I shouldn't share this but it is nonetheless true. Call it schadenfreude, jealousy, whetever you like. Everyone knows there are people with much more money than sense, buying into a (car) market they know absolutely nothing about. Driving up prices to insane levels, not unlike real estate was in the mid '00s and RE is headed that way again. In both cases it prices the real enthusiasts (cars) and people wanting a house to live (RE) out of the market.

A part of me knows I will feel some satisfaction when the last fool is left holding the bag on a portfolio of "collector" cars when the bottom falls out.

 

The prices will REALLY start to go up soon!

Buy now or "pay later"



[extreme sarcasm]

 

I will also make an observation. My guess is that the vast majority of those buying into this round of car bubble were not participants in the late 80's bubble. Once you were burned as badly as some of these guys were in the market, I assume they are sitting this one out.

 

This is an extremely valid point.

I have had a lot of requests for certain cars... all "hot" cars. Long nose porsche, 930s, 993 turbos, 3.6s, then... 575 manuals, enzo, carrera gt, 328, carb 308.

I should just find the car and sell them a car... but instead I shoot myself in the foot and say... well if a car has already doubled in value... is it more likely to double again or should we find the next one thats going to double?

Then someone else sells them a total pile of junk. Fresh paint, service done 7 years ago, mods, no service history or books.

 

The crash will come but not to zero. We are never going to be see a $20k dino like we did in 1980. So bought well can still be a good play

 

But when you are in the middle of a bubble, there is no such thing as "well bought" if you are intending to keep and enjoy the car for some time. You would almost always be better off waiting until the market crashes and then buying the car for half or less in a year or two.

Certainly skilled flippers today might still have a bit to run. You still see 993 Porsches or the occasional NSX on craigslist, sometimes for reasonable money. Not cheap, but with room to buy and refurb cosmetics enough to still make money at these elevated prices. But also not without considerable risk.

So let's take that hypothetical 993 coupe. 100k miles. Four owners. A couple of glaring cosmetic issues like a scraped front lip and a small dent in the passenger door. Needs a service and brakes. A worrying drip of oil on the garage floor and the carpet is threadbare. Last year that car would have been $25k-ish. In today's bubble market with all issues rectified it is probably more like $50k private party retail.

You would have to be very careful, car is probably advertised with issues at $30k today, and you might put $8k in it leaving $12k potential profit . A buyer runs the very real risk of having the market turn before he is able to fix and flip the car. A year from now that car which he has $38k in ($30k + $8k repairs) could easily be worth less than than that.

 

if one is a true collector enjoyer, with an affinity for the car and brand they are buying/ enjoying, then it is impossible to get burned by changes in the market...

it is those that are buying for a quick flip or short term , that stand to get "burned"... the rest of us that enjoy our purchases do not really care what the current price is... we are not selling... we are enjoying the cars we have...

it is impossible to lose in a changing market... as long as one does not have a need to sell... a sale needs to take place before any determination of loss can be made... in the many years of Ferrari ownership the markets have had their ups and downs, yet the value of my cars is greater than was paid when I decide to make a change... I enjoy what I have with no short term desire to make a change... buy what you like when you see it, a Ferrari is not a perishable or consumable, it can be around for a long time, if one choses... enjoyment does not have a price cap, prices are only ridiculous if the resources to purchase are thin

 

Its interesting because we hear of a 599 stick(and 599s have acrappy stick setup) selling for 500k or something. Yet autosport who are hardley cheap are selling a 5k mile 599 for 159k. So yeah some people are going to get really burned on newer stuff, and dinos have stalled out, but there are still some good buys for those who really drive, even int he nearly new arena.


Entusiuasts who like to drive still have any number of late model Modials, 355's etc to chose from that the chattering classes have not caught on to yet and are great cars in and of themselvs.
308Gt4 were unloved as mondioals are now, 308s were seen as slow as were dinos, now we can buy 355 inexpesively. If you are a driver enthusiast there are still lots of great buys, and yeah when the market crashes, there will be more. We also know thta if you buy a great driving car with good styling its purelya matter of time till it catches on.

458s will start dropping soon, and in a few years or more will be 120k, if its anice car now it will be a nice car then, 20 years on they will be classics.


Still its pity to hear about mechanicaly questionable cars with blowover paint jobs sellign for big $$, yeah people who have no clue will get burned till another generation with no memeory returns.

Meanwhile high prices mean lots of cars get saved through restoration, and others suffering defered maintance get owners who will spend.

 

QE money ended up in hands of like 0.0001% of population who was flipping bonds to the fed for risk free profits now it showing up in stuff you can't conjure up like cars, art, stocks etc....

You can conjure up all the dollars you want you can't create value..

 

I know, we hear that a lot, but there is truth to both the "bubble" and "undervalued" perspectives.

And I would call out the 308/328, and Porsche 993, as being a lot of car for the money. Once you've driven a 996 and get back into a 993, you realize just how good those cars were. The 308/328 were the last of the old-school body-on-frame Ferraris. It's not a matter of this gearbox or that gearbox, or special editions -- the entire cars are irreplaceable in their method/philosophy of manufacture compared to the newer ones. The notion that these Ferraris would sit around forever at new BMW 3 series prices is ludicrous. Want a hand-finished Ferrari south of $500K? The Boxer/308/328 were all that was left, and the entire production run of 328s, for example, is less than Ferrari make in a year now.

That said, there are limits, and I think a lot of relatively common newer cars are artificially inflated right now. A 512 TR is a nice car, but not so much that it should have tripled in value over the last couple of years.

There are a lot of cars that it's time to sell now, for those who care about the money involved. $680K (which is what I think it sold for) for a 599 with any gearbox is ridiculous. Paying a $500K premium for a stick in one of the most automated/computerized cars ever to come out of Maranello... yes, someone will take a bath on it.

 

Thanks for mentioning art. Recent art auctions have also gone off the deep end -- just takes a few people awash in more cash than they know what to do with.

 

Doesn't this also mean that the price for a new Ferrari is too low?

 

Yup, and buy'em when they're cry'in.

 

yep

 

This from the NY Times: http://www.nytimes.com/2014/08/30/business/a-soaring-market-for-classic-cars.html?_r=0

"Last year, two Manhattan condominiums sold for over $90 million and a Francis Bacon painting went for $142.4 million."

“Without exception, we’re seeing every segment of the market, and nearly every model, hitting new all-time highs,” McKeel Hagerty

But when even a Mini sells for six figures, a lot of people are also asking if the car market is in the middle of a bubble. If so, it wouldn’t be the first time. The market soared in the late 1980s, especially for Ferraris and Jaguars, then crashed.

“I’m becoming increasingly uneasy,” Scott Grundfor recently wrote in his newsletter for car collectors. (Mr. Grundfor’s company also restores and consults on classic cars.) “I’ve firmly believed at least 50 percent of the dramatic rise in car values can be attributed to the printing of money and the manipulation of interest rates by central banks.”

I’d like to see a leveling off” of prices, said Keith Martin, a car collector and founder of Sports Car Market magazine. “This can’t go on forever.”

 

Recent sales:

1997 Porsche 911 Turbo S Coupe, 15,432 miles: sold: $440,000 Amelia Island FL
1965 Porsche 911 Coupe (not an "S", just a run-of-the mill 911): Sold: $266,750
1959 Mercedes 190SL: sold: $247,500
1977 Ferrari 308 (metal car; NOT a Vetroresina): Sold: $115,500
1965 Jaguar XKE convertible: Sold: $280,500
1961 Jaguar XKE convertible: Sold: $363,000
1973 Maserati Bora: Sold: $264,000

etc.....
etc.....etc.....etc.

 

There was no 911S in 1965, and the early SWB cars are legitimately rare... but point taken.

 

That's an interesting discussion on its own.

My own view is that something like a Daytona or 246 is a lot "more" car due to the handmade nature and mechanical purity. They're infinitely rebuildable, with no electronics to go obsolete. That also applies to early Porsches. A 1970 911 is a forever car. you don't "upgrade" it by buying a 1980 911 or a 2000 911. You don't "upgrade" a Daytona with a 550 or 599. The early cars are more art than technology.

I think it's reasonable that a classic Ferrari would be worth more than a modern one, and if there is a collapse I'd expect to see it in the post-1990 cars which are commodities more than collectibles.