Bubble finally deflating?
 

I think it is.

I've seen some softer prices for the first time in years.

Including this '67S softwindow targa that sold at Mecum this weekend for $130K.

https://www.mecum.com/lot-detail/DN0615-220050/0/1967-Porsche-911S-Soft-Window-Targa/4-Speed/

Once prices start declining, the same psychology that pumps up a bubble works to deflate the bubble.

I'm calling it here and now - the bubble is going to deflate.

Mecum auctions have been very weak for porsche sales all year.

Cue all the bubble disbelievers who swear that 4x price increases in 18 months is just natural and sustainable market forces at work....

Personally, I watch the 993TT market and there is currently a huge surplus of available cars on commoner peasant websites like eBay, Cars.com, Autotrader, etc. Granted, they are priced high, but it should serve as a cap and might exert some downward pressure as the cars continue to sit for months on end. To me it also shows that collectors might not be singing the same "they'll only go up up up!" tune they were last year, or they might just be way more picky and demand only the finest sub-10k milers.

I'm not convinced either. That car was poorly consigned in that particular auction. Mecum are typically heavy with muscle cars and other American iron, but the Denver auction was very much that way. Exactly the kind of auction I'd want to hit if I were looking for a bargain Porsche - there won't have been many people there interested in that car, and few bidders = low sales price.

I don't believe that things will continue to climb indefinitely at the level of the past 2 years, but I don't see things declining anytime soon, either.

From the photos, the car at Mecum looks very mediocre to me, Lots of missing or incorrect details, ride height is wrong, poor panel fit, description says 4-speed transmission, etc. Looks like a car that was tarted up for sale and brought all the money and then some for the condition. There's a big difference between a #1 condition car and a #2 or #3 condition car.
Another venue with more critical or educated buyers might have brought less. As the values have risen and these cars have gone from enthusiast status to collector status, quality, condition and provenance are everything, and buyers have become very discerning. Contrast this SWT with the $600,000 RHD 73S coupe that sold at Bonham's Goodwood sale this past weekend. An outlier, and driven in large part by the identity of the prior owner, but demand for these cars remains very healthy. The sky is not falling.

I think Mecum is a poor data point for Porsches, but you can believe what you want to believe.

A single data point does not indicate a trend.

If you do not plan on selling your car and just want to drive it like most of us it really does not matter if prices go up or down. I bought my car 5 years ago for $12,000. If it goes up to $20,000 and then back to $12,000, who cares?

I don't think there's a bubble anywhere. Old 911s were just waaaay too cheap for a very long time and the market corrected itself (dramatically, I'll agree to that). The 50 year anniversary of the 911 put that process into warp 7. Of course the surge in prices will not go on forever, but that does not mean that prices will ever come down again. It is not the first time this happens in the classic car market.
Like someone stated above; "demand is healthy" classic 911s gain ever more popularity everywhere.... and they will never make another one.

Problem is, there's like dozens of buyers for every car that comes to market. They have disappeared from the roads. So many have been shipped out of the country. In my state it's almost impossible to find an air cooled 911 for sale. People practically fight over the few that do come to the surface. When supply and demand is that lopsided, no way the prices are going to drop.

Probably not going to drop anytime soon but as I put forth in another thread, I think sales seem to be hitting an air pocket - at least 993's that I've been following.

Someone else posted this recently but I think the trend is worth noting.
https://www.hagerty.com/valuationtools/Market-Rating

I bought my first 911 off the showroom floor in 1975 and although I was into British cars for an interlude, I've been involved with Porsche's for a long time. I also lived through 3 CA housing bubbles and once prices of anything start increasing more than 10% a year, people who otherwise would not buy "now" suddenly get comfortable with accelerating their purchases. Once it gets to 20%+ emotions (greed) weigh heavily and people who didn't even know they wanted something have to have it. And they start shedding other assets to buy even more of them. In the case of cars, dealers also lead the charge and rapidly expand their inventories.

So while supply is not going up, demand can get artificially inflated once a purchase becomes a "no-brainer." It's possible/likely that a lot of car people have decided over the past two years to maybe sell the Alfa or whatever and get their first, or another 911 - and make some money on top of it.

Dealers and exuberant sellers have now created an overshoot in price expectations (IMO) and sales volumes will stall as the "no-brainer" argument loses strength and the demand trends back to whatever level it should be based on those of us who want to keep these cars and drive them. Not squeeze them into a collection because it can't possibly be a bad idea to invest in one.

But there are costs associated with ownership and we will see if the trend reported by Hagerty (and/or the global economy) results in some or many of those stored cars going back on the market and creating softness in prices.

I don't think flattening off counts as a bubble popping. I've said for months that there are lots of mediocre cars trying to push the limit and that they don't define anything. Their failure to sell is only an indication that they were overpriced.

It appears that pricing on middies, SCs and 3.2s has leveled off a bit. Again I think it's an inventory thing. Lots of good cars sold. Now cars the next tier down are out there at similar or the same price. Their days to sell will go up and there will be a discount off ask versus full price or greater offers on most of them.

I bought my car in October 2011. I limited my first weekend of shopping to 3 cars (all SC or 3.2 coupes) within driving distance. But had I wanted to, I could have looked at as many as 6-7 that were advertised within 250 miles of me at that time.

Today, even if you expand the range to 500 mile radius, you never find more than 1 car for sale, and they are generally not all that great. Frequently there are none publicly advertised. As has been noted, the supply is pretty tight right now, prices will stay strong.

Well, clearly it's deflating -- with a 959 Targa only bringing a $53XX bid...

Porsche 911 959 | eBay

:rolleyes:

I agree...I think things have slowed down or even plateaued for a little while for all but the rare and "best of the best".

Driver's quality cars seems to have stalled out somewhat.

Not saying the bubble is popping (it hasn't). However, what the next step will be interesting.

I can't tell if you think you're making a point...

That auction still has almost 6 days to go. If it were a no-reserve auction, the closing price would give a good indication of where the market is.

That car is local here.
https://denver.craigslist.org/cto/5096478633.html

I don't think it will sell anywhere near his ask price.

Agreed. That thing's been on C/L here, on and off, for several months now. I think the initial asking was north of $30K.

I am still surprised that people think this is a Porsche bubble. If you broaden your outlook, you will see that this is global and across all luxury. We are in a massive bubble from government intervention, QE / currency manipulation. When it pops, it won't be Porsche popping. You also might not be worrying about the value of your toy but about the security of your job or the value of your home. It's only when the good times are over that the bubble will pop and by then, people won't be thinking, man, finally I can buy hat 400k GT3RS 4.0 I have been waiting for to come down. People will be worrying about their IRA account and this time it won't be a V shaped recovery. It will take a decade to rid the damage that the fed has done.

This all according to history, not prophecy.

Is it a good or bad sign when "buy-here, pay-here" comes to the C4 market?

https://miami.craigslist.org/mdc/ctd/5095256839.html

Of course this has a lot more interesting stuff going on than just the pricing scheme:

• Florida car
• Owned by a parts/rebuilder shop since last Nov,
• New ECU, Imobilizer and alternator
• No VIN posted in the ad

Might have taken since Nov to dry it out?

...b-b-but...they aren't making air-cooled 911s anymore! They can only go up! :confused:

Whats your point?
The fact that the entire global economy may be one huge bubble waiting to burst, has nothing in particular to do with the 911 market.

I've seen quite a few posters argue over the last year that air-cooled 911s couldn't possibly go down again, because they don't make them any more and they're only just now approaching their real value and several other "seriously, THIS time it's not a bubble!" types of reasons.

Which isn't to say that it definitely is a bubble on the brink of collapse, just that the last 18 months show how much of the market depends on herd psychology and the whims of wealthy collectors.

Yeah, but the global bubble theory does not exactly have much to do with the 911 bubble prophecy.

Oh, jeez. Time to move this thread to the loonie board.

Look...
It's all BS until you actually go and try to buy one of these in good to nice condition. Not in 2011, not in 2012, not last year...today! I'm not really interested in your success story of 2 years ago. I'm interested in your buying experience today, not your observation of what's for sale or what's not selling.
After you've shopped seriously a bit, like many of the 'want to buy' guys on these forums have shared, then get back to us about the so called bubble. Until then...it's just speculation, and in my opinion, not valid.

Ignoring the possibility for 911s to go back down in the future is ignoring the possibility of a global bubble, where all sorts of luxury goods are up across the board.

It's also speculation to maintain that it's not a bubble, the market will stay strong forever and prices won't ever go down.

Really the whole debate is tiring because nobody knows the future, bubble deniers and believers alike.

Well, some of us are old enough to remember the bust in the early 90's. I saw a formerly $1M Ferrari F40 sell for $350K to name just one example. So anything can happen.

And there's demographics as well. When I started going to car shows the "can't loose" investment cars were, believe it or not, top-level Model A's. This caused any Model A that still sat on 4 wheels to be dragged out and restored and flogged. Then it was T-birds, and so on. This article sums it up well: Baby Boomers Created the Classic-Car Market—and Could Crash It – Feature – Car and Driver

But wait, none of us Porsche owners will never get too old to care, right? Hmmm, maybe all those cheap Tips are worth a 2nd look. I could store a bunch of them for 10 years and make a killing!

Yeah, I almost brought that into it but didn't want to belabor the point. Back in that Ferrari boom, you can bet that every one of those guys would tell you till they're blue in the face that this time was different, it wasn't a bubble, they aren't makin' 'em like that any more, they'll only go up from here, etc.

In fact, it's part and parcel to any legitimate bubble that a large contingency believes with utmost certainty that they can't lose; otherwise, they wouldn't be buying.

I wouldn't be surprised if unmodded Supras and GTRs become the hot collectible in 10 years or so.

Your first paragraph and the rest of your post are two different things all together. Taking just your later comments, you aren't talking about a bubble bursting. You are talking about genuine market revaluation and an article that explains why it is happening. That thing is/will play out over a decade or more. A bubble bursting is akin to your Ferrari example. It is near instantaneous. And it involves a significant percentage of the car's value disappearing overnight.

Will the value of air cooled 911s decline 20 or 30 years from now? Quite possibly. Do I personally care? Not one bit because I will still be driving mine.

Agreed.

The value of these cars has to derive from the fact that people still enjoy and relish the unique driving experience they offer

... otherwise they might as well be the Duesenbergs of this era, anyone still buy those these days ?

Having said that, I must admit I've yet to see a 930 or a longhood being driven around in the south bay.

Heck, I see more 356's than those !

Yes, well spotted as my Brit friends would say. I was indeed making two different points in one post - and they both relate to the invincibility (or lack thereof) of an investment in any car. One, bubble, is a short term risk, the other is longer term. Both point toward buying a car, any car, for personal reasons, not for short or long-term potential gain.

Quantitative easing as a Fed policy to prevent deflation (i.e. bubble bursting) is a documented reality. If the Fed thinks printing money will keep prices from going down, they're correct, and any economics professor can confirm that.

The only question is: how long can this go on before the bubble bursts anyway? We saw in 2001, 1987, 1929, etc., that it cannot go on forever. No loonies here.

Twenty years ago, along with others I drove my long hoods around the Bay Area. Then it became so congested that I could no longer get from Willow Glen to an open road, so I took my long hoods and moved to Texas. Lots of long hoods around here.. Lots of air cooled cars of all ages actually...;);)

I drive a long hood and multiple 1976 930's weekly in the North bay.

I see the same thing. So many 993tt on the market its incredible.

Didn't I just recently see a $600K S in black, RHD? Or was I dreaming.

Sometimes anomalous data looks like a trend. SmileWavy

Ah, you mean like a single rusty 911S Soft window sold cheap at a hot rod auction appearing to some to be the 'end of the bubble?'

:rolleyes:

I wouldn't call that anomolous data, I'd just say that's a data point that's misunderstood or misconstrued. :)