For the first time in 31 years, I missed Monterey Car Week.
On the weekend before the Pebble Beach Concours d’Elegance, I can usually be found leading a ragamuffin “Catch Me If You Can” group of sports-car fanatics on a road trip down the Pacific Coast from Portland, OR, to Carmel. It’s SCM’s annual Caravan to Concorso.
Not this year.
I continue to make measured progress from my January stroke — as a dear friend always says, “Slow and steady wins the race.” I couldn’t figure out how to do Monterey at anything less than warp speed.
Go to the first 20 minutes of the Jet Party? The first 10 of the Hagerty reception? Stop in at each auction just long enough to do a “FaceTime live”? Only have one snack at The Quail? Emcee the last 20 minutes of Concorso Italiano? Fly over Pebble at 11 a.m. in a helicopter?
It’s the old “in for a dime, in for a dollar” situation.
So while the rest of the collector-car world was running around like Chicken Little squawking that “Daytona prices are sinking faster than the Titanic,” I was perched in front of my laptop, in the quiet of SCM World Headquarters in Portland, OR.
Nearly every Monterey Car Week auction is now live streamed, so I was able to keep abreast of the action in real time.
I didn’t get stuck on Highway 1 once. I didn’t buy a $10 latte or a $25 short pour of a mediocre California Cabernet. I didn’t have to sleep on the lawn at Pebble to be a part of the Dawn Patrol.
What I did miss was the camaraderie of the colorful dealers, bidders and slightly irrational enthusiasts who make up the core of our wonderful hobby. I missed hearing, “OMG, he’s not going to turn down THAT bid for a GT3,” or “I saw better cars at Concours d’Lemons,” or “Look, they’re giving away another Ferrari tonight.”
By now everyone knows the story. Auction sales were down by over $115 million, which, in the art world, is one third-tier Old Master — but still seems like real money to car collectors. This was the biggest year-over-year decline since 2001.
We have had corrections before — some even greater.
However, for collectors who joined the party 10 years ago, it’s been a one-way ride going up the entire time. They have never seen an adjustment like this. Subsequently they are shocked (shocked!) that the Ferrari Enzo they paid top dollar for at auction last year has suddenly become a very poor investment (soybean futures, anyone?).
After three decades, I’ve learned that collector-car prices rise and fall like ocean swells. Evan Williams, manager of the “What’s My Car Worth” Facebook page, sent along the following note: “1972 Ferrari 365 GTB/4 Daytona, chassis number 15569, sold in Monterey at RM Sotheby’s this year for $577,000 all-in.
Chassis 15569 was last sold in 2014 at RM’s Amelia Island sale for $781,000, including commission. Going further back, in 2008 Russo and Steele sold the same car for $390,500 all-in. So this car was very well bought back in ’08 — but not so much in 2014.”
Without exploring the intricacies of what a seller truly nets and what a buyer truly pays, let’s assume the seller of chassis 15569 took a $250,000 haircut. Does that mean the end of the world is near?
Cars are not the only items whose value fluctuates with the economy.
I recently looked at a beachfront condo at Cannon Beach, OR. The condo had a Sunset magazine-worthy view of Haystack Rock. Eleven years ago it was purchased for $850,000. A comparable unit next door just sold for $510,000 after a long time on the market. And prices are not getting stronger for vacation condos in this uncertain economy. I would not call that a great return on the initial investment.
Imagine how we would describe a Boxer that someone bought in 2008 for $850k — and sold this year for $510k. In the real world of investments, assets are fluctuating constantly. The secret is knowing when to get in — and when to get out.
This was a good year to get in. Next year may be even better.
If a Daytona hammers at $577,000, conventional wisdom would say to sit on your hands until enough have sold for a trend to be established. A lot of hands were sat on as the Monterey weekend unfolded.
What we saw in Monterey was a slowing of the velocity of the market as buyers lost confidence. Will the market go down another $115 million next year? Unlikely. But it is equally unlikely — barring having a few high-ticket high-quality cars in the mix — it will go up $115 million, either.
Monterey 2019 was neither a crash nor a blip. It was an honest correction for a market that has been going up with no pauses for far too long.
My advice? Don’t pay yesterday’s price for anything. Knock a car hard for any defects or questions in its provenance. Don’t be in a hurry.
RM Sotheby’s Bill Buckner Moment in Monterey
The almost comedic beginning of the sale of the 1939 “Type 64” in Monterey is destined to become as well-known as Boston Red Sox first baseman Bill Buckner letting a ground ball roll through his legs — during Game 6 of the 1986 World Series.
The provenance of the Type 64 was not without questions to begin with. Guesses as to what it would take to buy it hovered in the $20 million range.
So when RM Sotheby’s screen showed an opening bid of $30 million and the bidding quickly went to $70 million, there was a universal sense of “what planet are we on?”
Frankly, it was no big deal. Errors happen all the time at auctions. After all, they are live events.
This particular faux pas just happened to occur in relation to the star car of the weekend — during the star weekend of selling for the collector-car world. In the end, it will be a video clip on Wikipedia, under the search results of “Greatest Auction Blunders.”
It was irrelevant to the market or the weekend.
I’ve already reserved an SCM condo in Pebble Beach for 2020. See you there. ♦