August 911 Porsche World "Classic Car Prices Cool"

[Tennessee911]

I Buy the magazine online. There is a Short article on page 10 you might want to read and ponder before you buy at current price levels. They report a 5% drop in May.

HAGI Historic Automotive Group does a monthly worldwide index and reports the drop.

Didn't stop me from buying a nice 83 Cab, but the price was well below market.

Just reporting what I read tonight, so don't shoot the messanger.

[Ferraripete]

I am happy to see a slowing of the rabid price escalation...better for the market in general if appreciation is a bit slower. I think many called for a bubble but I don't think that is in order. what drove prices in 89-90 was speculation. today, people are simply paying up to own the last of the analogue cars that they knew and loved.

that said, true low production vintage cars may still be headed higher. the Bonham's 250 gto will trade for north of $50mm...should be the new high water mark!!!

[kreeshp]

I don't agree with the forecast for lower prices in the near term for air-cooled 911's. Classic cars in general? Perhaps.

Someone else much smarter than me in another post alluded to the observation that air-cooled 911's, and in particular the G series, are the cars that those of us who grew up in the 70's, 80's and 90's coveted and had posters of, and now that we can finally afford to buy them, we are buying them and driving the demand.

Until this cohort of buyers ages and dies off, the demand won't let up.

Local supply is only dwindling each day, week, month, due to neglect/rust and crashes/accidents and foreign/overseas interest. I can't see how prices will drop with demand high and supply getting lower.

[Jrboulder]

Well we're coming to that point where the people who want the more normal cars cars now have them and at the same time sellers believe their own hype. It'll be interesting to see what happens from here.

[CountD]

A 5% drop in May is such a non story that it baffles me that they even printed it.

[COLB]

Originally Posted by CountD

A 5% drop in May is such a non story that it baffles me that they even printed it.

Didn't read the story, but what is the basis for assessment? Is the data from auctions? Insurers?

"Classic cars" in general are a ginormous market. A few segments softening (like 50s era coupes and sports cars and 60s muscle cars) might yield an overall 5% decline, eve as some segments remains stable, or appreciate.

The 911 market is still cranking from where I sit.

[Tennessee911]

From August 911 & Porsche World. News Report

Classic Porsche Values Cool

After a sustained period of fast growth, there are clear signs
that prices of classic Porsches are levelling off, or perhaps
even falling slightly. Despite some astonishing headlines prices
of late--earlier this year a 964-series 911 Carrera RS sold for
close to 246,000 pds, and a 1973 911 Carrera 2.7RS fetched
844,800 pds--compiled data records a five per cent decrease in
values during May compared to the same month in 2013.

It is the conclusion of the Historic Automotive Group (HAGI)
which each month produces an index of worldwide classic car
values, and which is organized on stock market lines. It first
mooted the possibility of an impending price slowdown in
December 2013. With such marked price growth previously,
Porsche values are still up eight per cent year-on-year, but HAGI's
Dietrich Hatlapa comments that 'this is weaker than the long term
average for this market segment.'

The overall classic car market is showing a 23 percent year-on-year
increase, according to HAGI, but Hatlapa nonetheless sees the
possibility of a correction. "Negative influences came from all segments
of the market, with transaction volumes indicating an overall decline,'
he said.

Even Ferraris, which have shown the most rapid price increases look
like wobbling. Although up 36 per cent in a year, they were down four
per cent in the first quarter of 2014. Classic car values would seem to
be echoing the London housing market, which agents reckon is slowing.
However it will only take a few sensational prices to be achieved at the
big international sales in Pebble Beach week in California in August for
the graphs to start pointing upward again.

But if this fails to happen it will not be a bad thing, Hatlap feels. 'After so much
double-digit growth, a cooling off will be very healthy for the market.'

(Sorry typos--had to type it out).

[KNS]

Originally Posted by Ferraripete

I am happy to see a slowing of the rabid price escalation...better for the market in general if appreciation is a bit slower. I think many called for a bubble but I don't think that is in order. what drove prices in 89-90 was speculation. today, people are simply paying up to own the last of the analogue cars that they knew and loved.

that said, true low production vintage cars may still be headed higher. the Bonham's 250 gto will trade for north of $50mm...should be the new high water mark!!!

I certainly hope the trend is slowing - but I'd be surprised if it were.

How do you even own a $50mm automobile? At that point you are purely a collector, very doubtful you'll be heading out and about in traffic in it. You own it either the same way you'd own a painting or you're hoping to make a profit on it down the road.

Even taking it to a shop for service would be an an undertaking (is the shop insured to that level an case of an innocent garage mishap?). I think the associated stress would take the enjoyment out of owning it.

[pmax]

Originally Posted by Tennessee911

compiled data records a five per cent decrease in
values during May compared to the same month in 2013.

Someone please tell me where I can buy a G50 below May 2013 prices.

[Jay H]

Originally Posted by CountD

A 5% drop in May is such a non story that it baffles me that they even printed it.

+1

I'd consider that 5% change more of an indicator that the market is simply pausing.

It's my opinion that the exceptional cars will keep cranking in value with not much end in sight. We may see a correction on basket cases and average driver quality cars as the collectors "get theirs" and move on to the next hot vintage sports car.

[RacerX1166]

IMO 5% is not statistically significant where classic cars are concerned as the 'commodity' isn't really homogeneous. In other words, each example to hit the market is slightly different and thus valued differently, unlike gold for examples. The only way that I'd buy an assertion of such a small decrease would be if the same vehicles were sold then resold in that period.

[Sunroof]

Okay..........I am in shock!! I will reduce the price on my restored 1973.5T 5% less based on this article. So lets see what's 5% of $65,000? Wow, a reduction of $3250.00 . Cost of entry into the Porsche longhood market will stay high and yes owners like myself are blown away at the prices and hanging onto these jewels not in hopes of rising prices nor even lowering prices (there will still be a high bottom line) but because the longhoods have reached their place in automotive history. I find myself sitting much taller in the saddle these days when taking the old gal out for a spin and the parade of kids in rice burners and dads in SUV's hanging on my bumper always proves it. Gotta love it.

Bicker all you want about bubbles, reductions, inflated prices, supply and demand, etc., the truth is that the cost of admission is never going to be cheap.

[techweenie]

Reporting on this stuff is like reading tea leaves. Are the same exact cars 5% less, or are more cars needing work - and priced lower - being brought on the market because of continuing demand? My read (FWIW) is the latter.

[Tspringer]

Originally Posted by Jay H

+1

I'd consider that 5% change more of an indicator that the market is simply pausing.

It's my opinion that the exceptional cars will keep cranking in value with not much end in sight. We may see a correction on basket cases and average driver quality cars as the collectors "get theirs" and move on to the next hot vintage sports car.

So, top condition early S cars will be $1M+ within 5 years? Because that is what continued appreciation at the rates of the past several years.

[Matt Monson]

I think the rates will slow but still keep going up.

I also agree with TW's assessment.

[Reddy Kilowatt]

Originally Posted by techweenie

Reporting on this stuff is like reading tea leaves. Are the same exact cars 5% less, or are more cars needing work - and priced lower - being brought on the market because of continuing demand? My read (FWIW) is the latter.

This. What are they measuring? How do they measure it? How statistically significant is 5%, particularly considering just a month on month change?

[comintern]

Prices have always fluctuated with a general trend in the up direction. Wealth accumulation, low supply vs strong demand, weaker dollar on a yearly basis since 1972 etc.. The market will always have the last word.

[COLB]

Porsche values are still up eight per cent year-on-year, but HAGI's
Dietrich Hatlapa comments that 'this is weaker than the long term
average for this market segment.

Anyone who thinks classic Porsche prices are only up 8% year-on-year needs to have their head examined.

[HugoBear]

Heck, it seems like up 8% month over month….

[OceanVista]

Its a fact that if you want to sell collector car magazines talk about values...going up or down or sideways. I would imagine the publisher of this magazine just wanted to raise a little money so he could afford a longhood at the Monterey auctions this year..

When I see a short hood selling for $20k+ in good serviceable condition I applaud the buyer. Fact is the cost to restore a long hood is now officially insane. 5 years ago a restoration would be around $100k...now, $150k. Its now the new normal to buy your rusty crusty long hood 911S for $100k and spend another $150k restoring it.

Bottom line, buy the short hoods and know that you are getting 75% of the short hood experience for 10% of the cost.