this might be better discussed in the biz section, but i put it here to get wider audience for comment. i can see how real estate prices will drop over the next 6-18 months. in turn this will affect people's perception of their net worth, and this will have a knock-on effect on the economy in general, and may lead to a recession. but it will also affect the fringe 'investments' like cars, art, rare books, stamps etcetc - basically all the stuff that seemed like a good place to park money if you were already long equities, commodities, and real estate. so in my opinion, keep your cash at the moment and wait before purchasing that classic car, or vintage ferrari. i think prices will drop 10-50pct over the next 2 years, depending on what it is. am i talking my book? yes of course, i would love to get another chance to buy a 60's ferrari at a decent price again. napolis, i am especially interested in your view on this. thx
Hi Ross..... I think that it will not affect my primary market significantly........that is the <$75K CAD stuff......but there's no question that the 6 figures plus area is going to be "a lot" tougher and much softer......and even more so for the franchised dealers than the prudent independants. Been thru two recessions already......it happens just like I described.
There are a lot more houses for sale then there are Ferrari's for sale. I'll take my chance with my F-Cars. Besides I don't plan to sell them anyway. Rick
I divested real estate several years ago, it's called divorce. Once you live in a dome tent with a couple of 308s you are basically bulletproof...... REITs based upon current market $$$ will be in deep do do, but that's what they do, hold the paper! Do you really think these mansions made of chop board and styrofoam constitute 'meaningful investments'????? They are just a 'dream' allowing the whole system to take the money. They'd have a hard time outlasting a 30 year note, IMO.....your dream will become a nightmare, depending on the original quality of construction. Man, you won't find 'quality of construction' used many times, on a Ferrari site! LOL!
I understand so well the "quality of construction" issue regarding houses. Here in Dubai they are selling absolute garbage for millions, and there are lots of other issues. Please, if you are considering investing in Dubai real estate, consider it a short term high risk speculation. And that is the kindest way I can describe it. My personal opinion is, unsurprisingly, DON'T! As for Ferrari prices, if you are buying it as an investment, you are making a mistake. Buy it to enjoy it; if it turns out that you lose less than usual in depreciation on a car then that's just a bonus. The real reward is in the driving, not the buying and selling. You want good long-term real estate investment advice, I have that too.
The coming recession will slow/reduce pricing on many things, and increase prices in commodities. Food and all fuels will go up, luxury items will flatten or decrease slightly as joblessness goes up. The average '3 bed/2bath' home will still be stable, though, to a point. I wouldn't embark on building a spec house right now--that's for sure! Neither would I consider the purchase of any $125,000+ exotic until I was more comfortable with the world-wide 'current events' going on. The US has a very strong and resilient economy in the long haul. It's the short term that is worrying me. Keith
BigTex..... So you have that "NASCOR" (brand name) sh*t too eh ? I agree with you.....what appears to be nothing more than the floor sweepings from Santa's elves factory along with sawdust and water pressed into cardboard sure doesn't give me any level of quality assurance or longevity at all. They are building crap here too.............absolute garbage................with twigs, toothpicks and the stuff you are talking about.
Disagree, to the extent of the mega-Ferraris. Folks purchasing 250 Tour de France, SWB, Cal. Spyders (LWB, please), let alone the great cars from the 50's, are not going to sweat it. Those cars will remain at heavy duty price levels. I think the 355's and 360's will get hit, and perhaps the upswing on some of the more modestly priced classics, eg. Daytona, will freeze or trend down a bit.
On the face I would have to agree with you, however just for sake of argument I will take a contrary view on the whole subject. Imagine it is 1999 again and amazon.com is $200/share. Tech stocks are the "can't lose" investment. EVERYBODY is throwing money at anything remotely tied to the internet. A year later it goes bust, but wait! there is a new "can't miss" investment: residential suburban real estate. The storm clouds are forming to rain on this sure thing as well. So where does an investor put his money now, where huge profits are practically assured? That is of course the big question, but what if it is exotic/classic cars? I'm not suggesting that this scenario will happen. But it did happen 15-18 years ago after the stock market collapse in 1987, and was helped along by the death of Enzo Ferrari in 1988. Beater 308s were suddenly 6-figure cars. I too would be interested in reading comments from people who were there (I was in HS), and their take. History could repeat itself. Imagine Mondial 8's selling for $75k...but you better buy now because they will be $80k next month
sjb509..... I got into the business in 1989....saw $125K+ USD 328's....LOL !! Remember some yahoo advertising in the DuPont Registry about how 25th Ann. Countach's were going to be $500K cars....LOL !! Said that right in his ad too....!!
I remeber those days well. What a horror. I watched a guy at Manheim buy an OK Fly Yellow 308 GTSi for $24,000. Four months later he sold the same car for $55,000 at the same auction. Nuts. I remember TRs were well over $200K, 328s were all above $100K and Lambos were going thru the roof as well. If there is any justice in the scenario, it's that the guys piling money into the market were Wall Street types and NOT enthusiasts. They're the ones that took it in the shorts when the market collapsed. John
Hang your art on the wall (Jay Koka) put some art in the garage (Ferrari) but invest with professionals (certain members here come to mind.....). Agree w/whart on the Blue Chip cars.....they'll rise and fall but always be the "cream', on top.
Seems a lot of posts here don't reflect reality. Here's reality: fear of inflation is the key to collectibles like Tiffany vases, Morgan silver dollars and Ferraris. When fears of inflation heat up, people want to unload cash and have "stuff" that will appriciate with inflation. Ferraris are one such thing. Forget housing and the stock market. Ferrais topped out in the late 80's well before the stock market boom under Clinton because of fear. It crashed when greed got the better of it. If we see our national debt and energy prices start a FEAR of inflation, you'll see $50k+ beater 308's, $200k+ 246's and $200k+ Boxers. Don't even think about a Daytona under $400k+. OTOH, if we get the debt under control and people are confident again like in the dot com boom, we'll have $20k 308's, $90k 246's and $150k Daytonas for a while longer. Ken
bill, ken, the cream will always be on top for sure, but part of the recent (last 2 years) mega price rise in these special cars, was partially fuelled by non-cognoscenti people buying at whatever the price was with little thought about driving the cars etc. and that to me seems a lot like the late 80's early 90's. but then when we had that mini recession in 91-92, the prices dropped precipitously because the previous buyers had bought for 'investment' reasons and not for the love of the cars, so they didnt want to hang on to them, they dumped them fast. i just feel that if people suddenly have a lot less money to spend because their mortgage costs have risen and energy is draining their wallets, that they will NOT be spending money on cars or art or coins etc. and this will domino up the market - to about the $250k mark on cars. (imho above that price, the owners will just keep the car or keep buying because its not the last 250k that will kill them.) below that figure is where you find normal people who have to make choices, and apart from tex, most people cant live in their ferraris !
On a related note, do you guys think that the emerging (or already giant?) Chinese market will create another huge exotic car bubble? (ala Japan in the 80's?) Any effect of new Chinese wealth in the current run up of prices? Maybe another exotic car bubble is all that we need to get some more barn find clunkers to be restored so that it can hang around for another 50 years....
Artn has broached a subject/market factor that has been often overlooked. The Chinese will play a role--a big one-- in the coming world economy--If they decide to take an interest in Western Auto culture as a 'store of wealth'... On the other hand, their historically conservative side may choose grain, timber, and oil over what could be conceived as a 'capricious' fad. Keith
I don't agree that Ferrari prices will drop significantly if we have a recession (which I think is fairly likely over the next year or so). The vintage cars are priced about right, IMO, certainly not overpriced. From what I can see, they are being bought by people who want to use them, not speculators or dealers. If there is a deep recession you may find some deals on thrashed 360s with no books or records, but quality cars won't drop much more than they would anyway through normal depreciation. Now, if we were talking about the muscle car market, I think you're right. I imagine if you want to pick up a clone Hemi Cuda (or maybe even a real Hemi Cuda), wait a year or two and you'll be paying much less than you would now!
thashed 360's will lose in any case. but nice 360's are also going to lose. how many people out there want to or can spend $100k+ on a used car ? not many is the answer. and those that can would in turn rather spend a little more and get a used 430....so i see a very dim future for 360's specifically. but also for 575's. you are right though that the fall in pseudo muscle cars will be abysmal. add to that anything that has the whiff of commodity to it, like sl55, or m6.
If new markets for Ferraris (or anything) come into play, then demand will force prices up. Frankly, I don't think a lot of Chinese are in the market for Ferraris and I don't expect that to change any time soon. Ken
Why don't you think self made Chinese millionares would be interested in Ferraris? I mean what else would they buy to show off their wealth in a nation transitioning from Communism to capitalism? When private enterprise (legal and otherwise) took off in Russia after collapse of Communism in the 90's, Ferrari opened a dealership in Moscow. All cars in their inventory sold out overnight (so I've heard).
In a communist society, there are few "self made" millionaires outside of government officials. They would have a real problem with driving a car such as a Ferrari. Showing off wealth is frowned upon! Most is hidden in their homes as art, etc. and not in garages or on streets. Of the few entrepeneurs who are able to become wealthy, I imagine one or two may buy Ferraris....but not like in Japan or the Middle East. I just don't see a significant demand in China emerging soon. Ken
Ross, Ross, Ross, you bad boy. Folks, I'm not sure how many of you know this, but Ross is a trader. A very good one at that. So, let me ask you a question. If you understand the madness of markets and you're interested in buying, would it not make sense to churn up the waters a bit? Seriously though, you need to refine your question. Instead of exotic car prices dropping, are you referring to collector cars or late model used cars? As you know, these are two very different markets. Dale
FWIW, I have heard anecdotally, that "prestige" vehicles has been a hot commodity in China for a while. The right people with the right connections never had too much trouble with obtaining wealth or the means to purchase luxury goods. I understand that there's a healthy gray market for imported luxury cars like Benzes and Lexus. We all respect the business savvy and accumen of Hong Kong businessmen, and I believe that folks on the main land is no different (so the ability to make the $ to buy toys won't be an issue). Lots of Ferrari fans in HK, and I also assume it's no different in China... (I apologize to HK people if they feel as if they been inapporpriately typecast!) In a similar vein, I recall reading in Wall Street Journal couple of years ago how China was becoming an important market for premium French wines... (Yep, the first growth stuff and all that....) Also in, WSJ, I recall reading about the increasing influence of Chinese $ in the world of fine art. Now, it seems pretty obvious that there will be an influnece, though we won't know untill later the extent of it....
