Market rating up, but Hagerty sees prices leveling off

January auctions push needle up from 70.22 | Hagerty illustration
January auctions push needle up from 70.22 | Hagerty illustration

The classic car marketplace is cruising along nicely, according to the Hagerty Market Rating for February. The initial rating, issued in late January, indicated a market at 70.22 on a 100-point scale. The needle moved up slightly to 70.61 in the February report.

Ratings in the 60-80 range indicate a strong and expanding market in Hagerty’s 100-point scale.

“The Scottsdale and Kissimmee auctions were among the biggest contributors to data for this month’s update of the Hagerty Market Rating,” Hagerty said in its report on the updated rating.

“January is the biggest month of the year in terms of number of cars sold at auction and is second in dollar volume to August, when the Pebble Beach sales take place.”

Hagerty noted that sales in dollar volume at Scottsdale increased by nearly 20 percent when comparing 2014 and 2015 totals, and that Mecum’s Kissimmee auction generated $6 million more this year than it did a year ago.

However, Hagerty adds, “A deeper dive into the results shows the market’s trajectory to be flattening at a rate greater than the numbers suggest.”

Hagerty noted that the one-time sale of the Ron Pratte Collection at Barrett-Jackson accounted for $35 million of the Scottsdale increase.

“Factor that out and Barrett’s total would have been down slightly, and the overall dollar growth would have been about 9 percent,” Hagerty said. “The other sales — Russo and Steele, Silver Auctions, Gooding and Bonhams — were also virtually flat year-over-year. Only RM posted a significant gain in dollar volume.”

Hagerty’s comments on its February report also noted that prices paid at the Scottsdale catalog auctions often fell well below auction houses’ pre-sale estimates.

“Results against pre-sale estimates at the catalog sales was also a mixed bag owing mainly to pre-sale estimates that our experts observed were among the most ambitious that they had ever seen,” the Hagerty report said. “The top of the market was clearly not in the mood to overspend by a dime and the results at the top reflected this.

“There were no eight-figure cars sold, in spite of the fact that Bonhams, Gooding and RM each had at least one Ferrari with estimates in excess of $10 million. This pushback correlates with our insured data at the top of the market, where the ratio of value increases to decreases has slipped measurably.

“The top of the market, which conventional wisdom holds to be the smartest of the smart money, is a prime leading indicator. It is logical that a cooling trend will be led by this segment, just as the market’s return to health starting in 2011 was led by this sector.

“Thus we expect that over the next 12-24 months the middle of the market and the entry-level will see growth level off as well.”

 

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