The State of the Market
Where We Are and How We Got Here
 MERCATO AUTO STORICHE
 By L. Wayne Ausbrooks

"Low interest rates and a booming real estate market have been putting extra money in the pockets of many would-be collectors. One would be amazed to learn how many of the $100K - $500K vintage Ferraris that have changed hands over the past few years were paid for with real estate money."


Over the past decade and a half, much has been written about the booming speculators’ market that gained momentum through the late1980s and reached full bloom in the early ‘90s before caving in entirely. You’ve heard it many times: Lessons were learned, fortunes made and lost.

In the wake of the big crash, we watched prices reach bottom, stabilize and slowly begin creeping upward again. It was interesting to note how the hierarchy among various models rearranged itself as some were quicker to recover than others. Surprisingly, the 250 GT/L “Lusso,” which seemed to have been widely accepted (in print, anyway) as the “most beautiful production Ferrari ever built,” was especially slow to recover and, for many years, appeared trapped at the just-over-$100K mark along with the much more plentiful (and arguably less beautiful) 365 GTB/4 “Daytona.” With so many market experts quick to point out how undervalued this car was, it should have been no surprise when, only a few years ago, Lusso values finally took off, rapidly making up for lost time.

Soon after, models immediately above and below the Lusso in terms of market value began their quick ascent as well. The 330 GTC became the new just-over-$100K two seater with the 250 GT PF Coupe following close behind. As 2005 rolled around, we saw nice 330 GTCs being offered for close to $200K and Lussos with asking prices of well over $300K, nearly twice what these two models were bringing only a few years before. Things had definitely begun to change.

The change was also evident immediately up-market from the Lusso, with open-top cars (275 GTS, 250 PF Cabriolet SII and 330 GTS) fetching prices that hadn’t been seen since the late ‘80s boom and 275 GTBs and GTB/4s becoming the new “Lusso” in terms of sudden market enthusiasm. With 275 berlinetta values crowding in on what had traditionally been much more desirable models, it seemed entirely possible that the domino effect might be about to set off a new market rush. On the other hand, some warned, we might actually be facing another market bubble.

So what happened to all of that excitement in the marketplace? Have the dominoes stopped falling? With the rapid doubling in value of Lussos and 275 Berlinettas, isn’t it only a matter of time before the million-dollar cars experience the same increase? For answers to these questions, let’s examine the events of the past few months as well and take a more in-depth look at what has actually been driving the market up to this point.

In March, Sotheby’s (well-known auctioneers of art and antiquities) announced their upcoming sale of significant Ferraris to be held at the Fiorano circuit in Maranello, Italy. The event would be held with the blessing of Ferrari SpA and would offer an impressive lineup of cars from the manufacturer’s past and present. In fact, thirteen of the twenty nine Ferraris being offered had presale estimates in excess of $1 million. If any single event was going to set the pace for the future of the collectible Ferrari market, surely this was the one. Or not.

For reasons I won’t go into here (see Marcel Massini’s excellent coverage of the sale here), the Sotheby’s at Ferrari sale was an undeniable disaster. Only ten of the twenty nine Ferraris were sold, with only a single vintage Ferrari breaking the $1 million mark. Immediately afterward, there was no shortage of excuses for the disappointing results and the general consensus among market watchers was that the Sotheby’s sale was handled so poorly that its resultant failure was in no way a reflection of the current market status. Even so, could it have an effect? After all, Monterey was less than two months away.


With no less than five automobile auctions held over a four day period, what has come to be known as “Monterey Car Weekend,” can usually be counted on as a healthy indicator of the state of the vintage Ferrari market in the US. Kicking off the bidding festivities for the weekend was Christie’s auction of Exceptional Motorcars held at the Monterey Jet Center on Thursday, August 18. Despite quite a bit of hype, of the five vintage Ferraris offered, three failed to meet reserve and the other two sold for prices that were market correct yet unremarkable. Even the highly publicized 250 GT SWB “Breadvan” (s/n 2819 GT) failed to draw any serious interest. It was beginning to look as though the Sotheby’s fiasco might have helped douse the flames that had been building earlier in the year.


Fortunately, RM’s two-evening event held on Friday and Saturday proved that the disaster in Maranello was less of a factor than many had anticipated. RM set an all-time gross sales record for Monterey weekend while managing to move just about every car that crossed the block. Out of the twelve Ferraris offered, only two failed to change hands (375 MM s/n 0366 AM and 206 SP s/n 008) and the other ten brought respectable, even if unremarkable prices. The hefty closing bid for 365 GTB/4 s/n 16997, in excess of $200K, might have seemed to be a surprisingly remarkable result but, the fact is that it was a nicely restored example with enough post-restoration miles to prove it was also well-sorted and most likely worth every penny. With the high number of cars sold, yet at figures that were consistent with current market values, the folks at RM had proven their ability to bring buyers and sellers together on the same plane.

Held on Sunday in Pebble Beach, David Gooding’s auction offered six vintage Ferraris, four of which had presale estimates of seven figures. Gooding managed to close three of the six, including one of two star attractions, the 275 GTS/4 NART s/n 09437, which landed $3,960,000 including buyer’s premium. Disappointing, though, was the lack of interest in Jon Shirley’s awesome 375 MM Berlinetta s/n 0322 AM. Having already undergone a top-notch restoration before making the concours rounds and taking home the trophy at Pebble Beach last year, prospective owners might have considered there to be little fun left to be had with the car.

The healthy, yet less-than-shocking auction results from Monterey weekend indicate that not much has changed since January. While the demand for production cars continues to grow, it has had little or no effect on the multi-million dollar coachbuilt and competition models. The dominoes have stopped short of the big-money cars. Looking back at where we’ve come from and what has actually brought us to this point, it becomes clear that there are two reasons for the divide in market activity.


As the dust settled following the market crash in the early ‘90s, the first cars to make a comeback were the top-tier models, primarily competition cars and coachbuilt cars of distinction, while the more plentiful production models were slow to rebound and have only been coming up strong over the past few years. While values of the most desirable models have already reached full recovery and are now slowly appreciating along with everything else that is rare and collectible, the lower-tier cars are just now catching up. This accordion effect is one contributing factor to the recent increase in value of more available models like the Lusso, 275s and GTCs while cars that changed hands for $5 million to $6 million a few years ago fail to bring substantially more than that today.


Even more influential than this, however, is the fact that low interest rates and a booming real estate market have had an enormous effect on this country’s middle and upper middle classes, putting extra money in the pockets of many would-be collectors. I think one would be amazed to learn how many $100K - $500K vintage Ferraris that have changed hands over the past few years were paid for with real estate money. The sudden widespread ability to sell or refinance property and pull out large amounts of cash has had a profound effect on the vintage Ferrari market (and the collector car market as a whole) and will probably continue to be a factor as we watch interest rates rise and the housing market cool and stabilize. While collectors of seven-figure automobiles have certainly profited from the real estate boom right along with the rest of us, it has most likely not been a deciding factor in their ability to buy cars.

VINTAGE FERRARIS AT AUCTION IN MONTEREY, AUGUST, 2005
 

Christies Monterey, August 18, 2005

RM Monterey Sports & Classic Cars, August 19-20, 2005
 

LOT #	YEAR	MODEL	CHASSIS #	HIGH BID	SOLD?
224	1959	250 GT LWB SPYDER CALIFORNIA	1217 GT	$1,320,000	YES
228	1974	365 GTB/4 DAYTONA COUPE	16997	$204,600	YES
232	1959	250 GT LWB "TOUR DE FRANCE"	1161 GT	$1,457,500	YES
250	1973	365 GTC/4	15779	$82,500	YES
257	1953	375 MILLE MIGLIA SCAGLIETTI SPYDER	0366 AM	$2,225,000	NO
260	1973	DINO 246 GT	04946	$90,000	YES
261	1966	DINO 206 SP	008	$2,000,000	NO
263	1963	250 GT/L BERLINETTA LUSSO "MEADE SPECIALE"	4587 GT	$313,500	YES
264	1970	512 S	1006	$1,947,000	YES
270	1965	275 GTS	7409	$253,000	YES
273	1951	340 AMERICA BERLINETTA	0126 A	$973,500	YES

Russo & Steele Monterey, August 20, 2005
 

LOT #	YEAR	MODEL	CHASSIS #	SOLD PRICE
S128	1964	330 GT 2+2	6363	$60,500
S143	1967	330 GTC	9821	$137,500
S153	1967	330 GTS	9481	$330,000
S170	1970	365 GT 2+2	12539	$91,300

Gooding Pebble Beach, August 21, 2005
 

LOT #	YEAR	MODEL	CHASSIS #	HIGH BID	SOLD?
31	1950	166/195 TOURING BERLINETTA	0060 M	?	NO
37	1967	275 GTS/4 SPYDER NART	09437	$3,960,000	YES
51	1953	340/375 MILLE MIGLIA PF BERLINETTA	0322 AM	?	NO
59	1969	F1 GRAND PRIX MONOPOSTO	017	$1,320,000	YES
61	1954	250 EUROPA PF	0341 EU	?	NO
64A	1973	365 GTS/4 DAYTONA SPYDER	16455	$495,000	YES