Recession on Ferrari Values

Real Estate values are on a long term slide for the next couple of years. With the comming reccession and possible world recession will Ferrari values tank like they did in 1990-1993 from the high in the late 1980's?

http://www.inman.com/inmanstories.aspx?ID=65464

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/10/bcnambrose11.xml

 

The real losers are the poor schmucks who are forced to receive their income and make purchases in bushdollars, now essentially worthless in the global economy. That said, there will always be people with the wealth and resources to obtain what they want. I see the disruption to the Ferrari market as minimal, save for some leveraged out mortgage brokers in the US.

Cheers

 

So the people with $1M+ salaries drop to around 800K/year hardly affecting their decision to purchase a ferrari. The rich always get richer, the poor and middle class are where the hit will be felt worst. I'm pretty sure CEO's are hardly sweating they'll lose some money but there will still be plenty for them, they'll just can a few workers to make up for it.

 

Welcome to Soviet Ferrari Chat

Yeah those rich are keeping the middle class down in America. When I was a kid I saw lots of cars with duct tape and wire holding parts on. Today, my house cleaner drives a newish SUV and our former nanny who now comes by to do the laundry has a new car. She cannot read nor speak English, yet she has a better car than I ever had until my 30's.

I spent three decades getting to where she is now because I was born in a poorer time. I used up my life getting where she is automatically deposited because anyone with a steady job in America now is able to afford more than I could afford when I was young and doing similar work.

And it is not just cars. One former employee had cancer and got a few hundred thousand dollars worth of treatment. That's the way it is in the USA.

Believe what you want. When the temperture goes up Americans go to the beach and 20,000 elderly die in France for lack of care. I see the middle class doing well where ever I look in America. Unlimited health care with the bill to be sorted out after you are well. Newer and better condition cars on the road. The biggest nutrition problem for the poor in America is eating too much - try to sell that as a problem in 80% of the world. $12 a month brings all the intellectual resources that perhaps a Harvard professor might have had access to ten years ago. The entire MIT circiculum is online free for anyone who has the gumption to look into it. It certainly was not there or available when I was young,

 

The rich get richer and the middle class gets poorer, luxury items will ALWAYS be bought as long as there are rich consumers. Don't expect to see a "recession" on Ferrari values.

 

Economies go up and down. Where the US economy is currently; is open to debate. But hey, if someone needs an enemy better it be Bush than the typical targets....

 

Those of you who think that recessions don't affect Ferrari prices or other high end items need to look at history. If just 10-20% of potential late model Ferrari buyers are eliminated, prices will drop---dramatically and many of those on wait lists will get off when they can no longer flip cars for a profit. Soon, new Ferraris sit on showroom floors begging for buyers, just like in the last recession and the one before that.

Dave

 

+1

By any objective measure, the middle class is better off---living space square footage, cars, elctronics. You name it. I read where a guy from India wanted to visit the U.S. Why? He wanted to see poor people that were fat.

Dave

 

I've spent the last 4 months changing some weekend toys - I sold a 55K mile F355 Spider in October for $59K and bought a 07 GT3 RS which I recently traded in toward an 08 GT3 RS (I traded it in for what I paid and the dealer sold it for a $11K profit within 2 days). I just received a non-refundable deposit on my 28K mile 97 550 (The deal should be finished within 10 days - BTW it sold for $90K). I've been looking for the right non-red Stradale and everytime I pass on one the next one is more $$$.

 

Amen. I'm hopelessly middle class and consider myself far better off than I could have imagined just 10 years ago.

As far as Ferrari prices are concerned, it's just like any other asset....they'll go up and they'll go down, but they don't mean a damn thing if you aren't buying or selling.

Jack

 

I work with several economists, and all are predicting a downturn in 2008 (in the U.S. and Europe). Apart from the new gotta-have-it-now Ferrari (F430 Scuderia) and the bonafide collectibles (Steve McQueen Lusso, supercars like the Enzo/F40, vintage icons like the 250 GT SWB, etc.), I'd expect a softening in the secondary Ferrari market where a lot of us play. I have a hunch 360 values won't weather this storm as well, with 18,000 of them out there, all out of warranty. There just won't be excess cash sloshing around for a while to absorb all those used cars. Will the Stradale behave differently as a special version of the 360? I wouldn't bet the retirement fund on it.

I slightly disagree with Hardtop about new Ferraris sitting in showrooms, but mostly because the market is bigger (China, Japan, Middle East) so the fate of the U.S. economy is no longer the whole story for Ferrari.

 

Just give the government time to work on this, and the middle class here will be as well off as the middle class in China or Mexico.

 

You may find that most Ferrari owners are not as rich as you think. With the high production numbers in the last 15 years a lot of Ferrari owners are upper middle class folks. I also find a lot of Ferrari owners are in real estate and manufacturing. These businesses are going to take a hit. I know my real estate business is on the rocks but my small manufacturing business is doing OK due to the low value of the dollar.

Looking at history we see prices go down about 6 months after the shock. The also seem to go up quite a bit just before a reccession. Recent pricing behavior in the car market is consistant with the late 80's (Nash Healeys going for $200,000 !) which set up warning bells to me. The recent heart attack in the credit market mid Aug has flattened the real estate market much worst than any one expected for the last 3 months. Now that credit liquidity market has dried up credit to small manufactures like me is very hard to get. Hold on its going to be a bumpy ride for the next 3 years.

 

Being an immigrant from Eastern Europe,after serving in Afghanistan (80/81),living in Italy and Austria until mid 80's and visiting Europe at least twice a year I completely agree with the post above.
Average (and majority) of US citizens have absolutely no clue about life outside USA,have absolutely no appreciation for what they have here and when I look at the recent polls,election results and some of the liberal posts even here on Fchat ,I am afraid about the future of my kids here....

 

While I disagree with that moronic bonehead liberal contention, if it were true then why not get an education, work harder, take risk and be rick too?

 

LOL that is true. People who have never left the US have no idea how well we have it, in spite of all our complaints. Very few people are directly affected by terrorisim; just those who have loved ones fighting in Iraq or killed in the 9/11 attack; and if you aren't losing your house, life is good.

Ken

 

+1
Insightful comments, as usual (especially for a post made at 1:40 in the morning).
Have to agree with your point about the 360 model being the most likely one to be affected.
Late 2008 might be a great time to buy a 360 Spider for a good price.

The 430 model is still a little too new for much of a price slide. Their time for significant annual price drops will come 2 - 5 years from now when the replacement starts showing up on a regular basis. Also, the big annual price increase that are likely over the next 2 years will keep the 2005 - 2007 model prices slightly higher than usual.

 

I disagree with all moronic bonehead liberal contentions. But I don't believe that hard work & risk make everyone rich. I should be the wealthiest man in America if that were the case

I'm not rich by any means. Paycheck to paycheck... on the verge of losing everything.

With some of the proposed ideas from Obama & Clinton... if they get elected next term I wouldn't be surprised if we saw another 90's recession AND depressed, angry music makes a comeback.

Everyone is better off thanks to Bush. People are doing well under his administration.

 

I think 2008 will be soft for us and Europe. I still think new cars will sell. I'm more concerned about the huge price increase on the market on new cars than the economy. I bought a brand new 355F1 in '98 for 142k and my new 430 will be in the 260k range. The new changes in the cars causing the price increase may kill off sales. I know there was another thread about this but I think it fits in this discussion.

 

+1 Well said.

 

Good to hear from other people like me who are "front line" when it comes to economic changes. A very significant percentage of Ferrari owners are business owners and we will take it on the chin in an economic downturn and be less willing to drop bags of cash on exotics, especially with credit dried up.

Best,
Dave

 

We're one of the few countries in the world where the poor people are fat!! No, this is not because they cannot find or afford healthy food. There are many healthy alternatives...grilled chicken, fish, etc. I finished cycling the other day and walked into a Burger King to eat a Whopper. I see a young kid, at least 1.5 feet shorter than me but similar weight (South Pacific Island kind of look). He eats twice as much as I do...of course, it is because he is oppressed by society...I forgot. Anyone who has travelled to any great extent outside of this country develops a great appreciation for what we have here, which is everything. My wife is Russian. We go and visit her family every year. They are all very educated but have far less disposable income than most U.S. college students! Be thankful!! However, there is something I wish we had that my wife's family and friends have...more closeness and caring for each other.

Ok, now that I am off the soap box...where I live in N.C. 360 prices have consistently been dropping. 430 coupe prices (not really spiders) for 2005 models are closer to MSRP than they have ever been. Not sure this has anything to do with real estate or the current economy...probably more to do with the pending introduction of new Ferrari models, loss of warranty, and greater choices in the overal exotic car market. For example, I think the 430 is the best all-around sports car period...but, I cannot order one new. But I could go tomorrow and spec order a Lambo Gallardo (no line, no wait). Think of all the similar new cars that have been introduced in the last few years, just to name a few-R8, 997 GT3, 997 Porsche Turbo, Aston Martin Vantage, Gallardo Superleggera, Ford GT, LP640, Spyker, Mas GranTurismo, C6 and ZO6. One can argue that these cars are not Ferraris but, most consumers in this market will still ask themselves such questions as "Ok, the 430 is better than the R8. But is it 90-100K better?" Some will say "yes" but many will say "no".
Just my 2 cents, probably worth less.

 

if Ferraris are recession proof, can someone explain to me what happened to prices in the early 90's?

Maybe 250 GTO's are going to have buyers lined up, but 360 spiders and other "common" Ferraris will be affected imo.

 

I agree with above.
I have a large income and disposable cash. And I do dream of getting a Ferrrai someday, but every time I get close to pulling the trigger on an F-Car a little voice in my head says, "Why are you going to spend $125K on a 360 out of warranty with all of its potential costs....when you can get a brand-spankin'-new Maserati with a 4yr/50K warranty?"
Now there is definitely a difference between Ferrari and Maserati, I don't argue that at all (please don't flame me, I'm not that stupid), but as was asked above....is there a $50K+ diffrence? Personal preference, but if there isn't literally a mountain of money rotting in my basement I'll go for the (slightly) wiser fiscal choice.
Now if those prices come down a bit more I will rethink that.