Price collapse date

There is an old Wall Street saying that goes something like this: "Nobody rings a bell at the top of the market."

As the foregoing posts state, the top and the slide of the collector car market can only be approximated with antidotal price data. Any graphical depictions of the collector car market using price data needs to be drawn with a broad brush rather than a narrow sharpie. Approximation is the operative word here.

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I’m ignorant. I was watching 330 prices.

They peaked at over $100k in 1989 and again two years ago at $400k.

2002 and 2008 didn’t touch them at all.

Matt

 

???

What happened ?

And even less with OP question.

 

Hi Ed, wasn’t the 1990 Gstaad auction the clipping point?
Ciao
Oscar

 

Absolutely not.

Marcel Massini

 

It makes sense there was no one month that is an identifiable inflection point...illiquid market with very little transparency pre internet days.

 

That is a key point!

 

Timo did one of the gentlemen call himself "Cars" or "Kars"? I recall a Mr. N and a Mr. T(no not that one).

 

What year did the speculators start experiencing those "mysterious warehouse fires?" Was that 1990 as well or 91?

 

If you’re referring to my recollection of the aforementioned incident 30+ years ago, unfortunately I don’t recall their names, but it was rather bizarre and I just chucked it into cultural differences.
Interestingly enough perhaps, AFAIK, the person I had sold “that” car (“Z”) to (for considerably more than most at the time thought it was worth), still owns it today, so obviously it ended up into to right hands*.

*I still have one (of the two) I myself bought couple of years later and also paid (for both) more than “the market”, at the time, thought they were worth.

 

The market slowly dropped from January 1990 through May 1991 and then seemed to have dropped like a stone. I figure a 20-30% drop in the entire earlier period and then it dropped as much as 10% per month from June 1991 onwards so that by early 1992 prices were 75% off their early 1990 peak.

 

Nothing happens in a vacuum, if you’re looking for the Timing and causes, you must look outside the collector car world. The 1990 US budget deal that raised taxes, think double gas guzzler tax and luxury tax That destroyed the boat industry. Which contributed to Bush 41s reelection loss. Add in the 1st Gulf War, unstable oil supply, prices etc.

While things have changed a bit today with the rise of China’s economic power, in the 90’s the old saying of when the US sneezes the rest of the world catches a cold was very much the rule.

 

^^ This would seem to corroborate my experience/recollection.

 

Collapse of Japanese real estate market at that time as well.
Forbes cover showed a US bill (don't remember the denomination) at or near the peak and said the cost to buy that much ground in Tokyo was $18,000 US.
That didn't last.

 

Mike Sheehan talks of daily faxes to a list of Japanese collectors with offers that would be outbid the following day with very top end Ferraris sold for record amounts, $10 million 412Ps and $17 million GTOs among the highlights. The Japanese property bubble saw Tokyo property worth collectively more than the entire US GDP for a brief period in 1990 and the enormous values were leveraged by many to build amazing collections. Collectors such Hayashi, Okada and Matsuda all accumulated some of the best collections ever assembled anywhere during the 1980s and very early 1990s and all were sold by the end of the 1990s.

 

Ed - if you want a model case study of what happened in the 1980s-onwards, try the Daytona. After wading through endless (UK) magazines and auction catalogues, I came to the conclusion in my Daytona book (see www.stradabiz.com if you've not already) that "As a bellwether for classic Ferrari values, Daytona prices have always been all over the place: £350,000+ just before the '80s bubble went 'pop'; then down to £50-£60k in the early '90s, and back up as far as £750,000 in 2014/15. £600,000 is more typical in 2017" (Edit: I guess that would be more like £500-600k now). As for the collapse, January 1990 sounds right to me. It really was almost as the clock struck midnight on New Year's Eve ! Cheers & Good Luck, John

 

christies monaco may 26 , 1987 gto #4561 $1.5 million , 330 p4 #DP2 $ 1 million . first million dollar ferrari sales ?
a member of our tour group to the race , gentleman from SF bought a 330 gts $159,000.

 

No. First one million $ sale was January 1985 when 3705 GT sold to Japan.

Marcel Massini

 

The 26 May 1987 sale of GTO 4561 SA actually took place AFTER the Christie's auction in Monaco, and the price paid was US$ 1'391'000, not 1.5 M. Sellers were from Vegas, buyer from Zurich, Switzerland, I was involved behind the scenes.

Marcel Massini

 

Okada was in NY/USA, not Japan.
You forgot Hiramatsu, Horinouchi, Kato, Kosaka, Okamoto, Sasamoto, etc.

Marcel Massini

 

Second punch followed a year later on the new car front by the U.S. Luxury Tax in the 1990 budget agreement and the 1990-91 global recession.

 

thanks marcel , i was at the auction and believe it was hammered sold and wrote the $1.5 in my catalog. maybe that included the commission. in any case who would have thought what they bring today !

 

Tom Kreid (pronounced "Creed")? That happened in 1991.

 

So have we reached consensus ?
Based on my personal experiences from that time period and combining those of others here, I’d say the “collapse” Mr. Niles is/was researching for happened or later became evident having happened sometime between the fall of ‘90 & the spring of ‘91 and by the summer of ‘91 the music had come to a screeching halt and most, if not all of the chairs have been broken or knocked down by excessive overloads.
If so, that was exactly 30 years ago.

 

As posted previously it was January 1990, Japanese collectors continued to buy for another year or so.