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Price collapse date

Discussion in 'Vintage Ferrari Market' started by Ed Niles, Sep 12, 2020.

  1. Ed Niles

    Ed Niles Formula 3
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    Price collapse date?

    I'm doing a book and want to make sure that my facts are straight. Was it 1990 that the big collapse occurred? Think Lord Brocket.
     
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  3. wolfchen75

    wolfchen75 Karting

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    By the late 1980s the conference business was booming and Brocket Hall was being hired for £25,000 per day. In early 1989 Brocket’s bank noted that some of his old Ferraris listed on the accounts had tripled in value and loaned him £5m to turn it into a proper business. This rose to £7m shortly afterwards and then a £3m overdraft was added to the account. Lord Brocket eventually accumulated over 50 Italian exotics valued at around £20m.

    However, by early 1991 the conference business was depressed, interest rates were soaring and buyers had deserted the free-falling collector car market.

    Having used the family seat as security Brocket was struggling to finance debts of over £10m and needed £4.5m to get out of the hole. With his cars insured for far more than they were worth Brocket colluded with his wife and two estate workers to pull an insurance scam that would result in four cars being cut up and then reported as stolen.

    Over the course of three nights in May 1991 Brocket and the two estate workers dismantled a Ferrari 195 Inter, 340 America and 250 Europa and a Maserati Birdcage, many of the parts being burned in the vast furnace used for heating the garage complex.
     
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  4. tritone

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    #3 tritone, Sep 12, 2020
    Last edited: Sep 12, 2020
    My own experience; I date it from March 1990 or slightly before; a client with a big collection (MBZ stuff) killed himself late March after his 2 540K Sindelfingen's could not sell for asking...later found to have HUGELY leveraged his collection $$$ to continue building....
    owed me >$85K for restoration work.......:(
     
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  5. Timmmmmmmmmmy

    Timmmmmmmmmmy Formula 3

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    All my research has shown Monaco in May 1991 was the last successful auction weekend before the wheels fell off.

    A few examples easily tracked by FML and auction are:

    #0268AM was offered for $2.15 million through early 1991 but only $1.3 in early 1992 and sub $1 mil. by late 1992
    #0272M was $775k during 1991 and less than $500k in 1992
    #0658MDTR was not sold during August 1991 for $850k, sold with #0580MD for $850k in 1992
    #0764S was not sold at Christies in August 1990 at a 9 million high bid, couldn't fetch more than $4.935 million and failed to sell at Poulain le Fur in December 1991 and by mid 1992 was offered for just $3 million on the private market

    Its impossible to pinpoint exactly when things turned to sh:t but prices softened between the Pebble Beach auctions in August 1990 and the Monaco auctions in 1991, perhaps 20-30% down, but between May 1991 and the end of 1991 they really tanked, many halved in value, in just a matter of months and 1992 continued the slide. GTOs were $10 - 20 million in 1989/90, $7-10 million in 1991, $3 - 7 in 1992 etc.

    The current rush for negative OCR rates in the post Covid19 world should/ could see another cycle of boom and bust in the collector car market.
     
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  6. 375+

    375+ F1 Veteran
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    As I recall the first indication was Barrett Jackson in January, 1990. Japanese collectors were still buying, there were two large auctions in Tokyo later on. One was successful and one was not. I can't remember if the last was 1991 or 1992?
     
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  8. KenGoldman

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    Hello Ed: I am really looking forward to seeing the book.
    With all the photos I recall seeing in your office when I visited years ago, it should be wonderful!!

    Best to you,
    Ken Goldman
     
  9. TTR

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    Having been involved with international vintage car trade at the time, from about ‘85 and buying/brokering/selling/shipping them mostly from SoCal to Scandinavia at the volume of about 100-200 annually, I recall that business falling flat on its face around early-to-mid ‘91, although signs of it slowing seemed to have been around already in ‘90 and by the end of ‘91 I had moved on and opened up my shop for repairs & restoration of the vintage cars.

    I can also still recall an almost surreal incident from couple of years earlier when I had several cars for sale (most at the time sold without advertising or before listing had been out for more than 1-2 days) and a Japanese gentleman along with a translator (though latter didn’t seem to know or understand even dozen words in English) came to look at couple of my offerings, let’s say cars “X“ and “Y“.

    I also had another car, ”Z”, I had sold couple of weeks earlier, still sitting on the yard, waiting to get shipped to Europe and as soon as the “gentleman” saw it, he lost interest in the cars (“X” and “Y”) he had come to look at and started “negotiating” the purchase of the car “Z” by pulling thick stacks of $100 bills from his (almost full) briefcase, which the poor translator/assist was holding flat for him and laying them on the hook of the car while directing/prompting(?) the translator to ask “How much ?”, rapidly increasing the pace and the pile of stacks, while I keep shaking my head in refusal and trying to make them understand the car having already been sold and therefor not available.

    And once the gentleman realized/understood this, he appeared extremely annoyed, promptly reloaded the stacks back to the briefcase and they both stormed out without further discussion or even words, other than perhaps muttered “farewell” or something in Japanese.
     
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  10. Marcel Massini

    Marcel Massini F1 World Champ
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    Crash happened January 1990.

    Marcel Massini
     
  11. Smiles

    Smiles Moderator
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    I wrote a paper for an Econ class trying to explain the very high recent sales price of a GTO. I wish I knew the s/n. This was the peak, autumn of 1989.

    The market crashed soon after. I felt stupid justifying the high prices.

    I’d say very early 1990, and I’d also say that Marcel knows better than anyone.

    Matt
     
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  13. Bradwilliams

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    And now the top of the market is still soft/barely declining while the bottom of the market (mass produced dime a dozen cars) is rising. Makes zero sense. "brokers" are out trying to create a market out of thin air. $50,000 dollar 1999 honda civic and 60 thousand dollar R129 Mercs simply because they have "low miles". It's pretty pathetic and bizarre to watch.
     
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  14. ttforcefed

    ttforcefed F1 World Champ
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    older cars are on fire - 2009 was a great year to be buying cars and holding! 355s going to be 300k soon.
     
  15. TTR

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    OTOH, a lot has happened in my life in subsequent 3 decades and did in those +/-5 years I referred to, so my recollections to exact dates or years in question might be slightly less than accurate.
     
  16. TTR

    TTR F1 Rookie
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    And these ^^ (again) have nothing to do with OP question by Mr. Niles.
     
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  17. ttforcefed

    ttforcefed F1 World Champ
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    1990, 2002, 2009 - all relevant years if you are talking about collectible price drops
     
  18. ttforcefed

    ttforcefed F1 World Champ
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    this gives some indication for the 1990 period using the f40 as an example,
    https://www.sportscarmarket.com/profile/1990-ferrari-f40-2

    Up, down and up again
    Buying an F40 is not for the faint of heart. Just when you think you know the market, it changes.

    The first U.S. F40s came in at a $389,000 list price. Speculators bid the market price up to over $1,000,000. Unfortunately, the collector car market crashed about the same time.

    Within a year, million-dollar cars were selling at half price.

    The dip continued. By 2000, F40 prices were as low as $225,000. The next few years saw prices go up and down. Some cars hit $500,000 in 2010 before jumping to over $1 million in 2013.

    Today U.S. prices yo-yo between $1,100,000 and $1,500,000, depending on the condition of the car.
     
  19. Smiles

    Smiles Moderator
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    What happened in 2002 and 2009? I shopped for, bought and owned my 330 through that period and don’t remember a thing.

    1990 to the Ferrari world was like 1929 to Wall Street.

    Matt
     
  20. ttforcefed

    ttforcefed F1 World Champ
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    2002 was end of tech wreck in nasdaq coupled with corporate fraud in US (tyco/worldcom) sp500 went down almost 50%. 2008 was global financial crisis.
     
  21. TTR

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    #19 TTR, Sep 13, 2020
    Last edited: Sep 13, 2020
    May I suggest re-reading OP question again ?

    P.S. There seem to be plenty of long winded, (ir)relevant discussions about “market” perceptions, so why not continue piling on those instead ?
     
  22. ttforcefed

    ttforcefed F1 World Champ
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  23. Marcel Massini

    Marcel Massini F1 World Champ
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    November 1989, 250 GTO #3909 GT, sold for 13.8 M $.
    January 1990, 4-liter GTO 4561 SA sold in Switzerland for 17 M Swissies. However, the Swiss buyer paid 15 M only and failed to pay the balance of 2 M Swissies to the Swiss seller, claiming the market had changed and price was no longer acceptable, trying to get out, getting cold feet. It took exactly 9 (nine!) years in Swiss court to settle, the January 1990 seller won, and the buyer was condemned to pay the balance of 2 M plus interest plus lawyers.
    January 1990 was the peak, then down to earth.

    Marcel Massini
     
  24. ttforcefed

    ttforcefed F1 World Champ
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    mic drop
     
  25. TTR

    TTR F1 Rookie
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    OK, if (In hindsight) the “peak“ is consider to have been in January 1990, when did the actual “collapse“ Mr. Niles was asking about occurred or was recognized having had occurred ?
    As I noted, I personally felt it’s impact directly, IIRC, sometime during first half of ‘91, but then again I was trading in much lower value cars than vintage Ferraris, so maybe the “market value” dynamics and their impacts on timing were different.
     
  26. Smiles

    Smiles Moderator
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    Neither one had much bearing on the Ferrari market.

    Matt
     
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  27. ttforcefed

    ttforcefed F1 World Champ
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    Are you being serious? U cld buy a tdf and f40 for nothing in 2002. In 09 f40s went back to 400k! 288 gto was 600k
     

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