Boy what a difference a year makes. Last year, the market was getting so calmed in Real estate, I turned my attention to the collector car market and found some interesting similarities.
A year ago, muscle cars were taking off, igniting a frenzy. It reminded me of the real estate market of a few years ago. Fake cars were put on the market and getting the same high prices as the nice ones. Almost any Camaros fetched prices RS/ST were going for. Any kind of ‘Cudas were trading near the upper scale of the top models. With that said, rare models with rare colors and top conditions should be worth something as we saw in bewilderment the sale of this 1971 Plymouth Hemi ‘Cuda Convertible that sold for $2,200,000. And one sold for even higher. For one thing, I couldn’t understand the surge in prices for muscle cars. They very rarely have international racing auras, don’t handle well, don’t break decently but have great lines and big engines going for them.
So what is happening a year later? Rare cars still yield quite a bit but buyers have shunned the fake ones. This is a good thing. The same thing in real estate, no one is really taken in and no one is jumping in to buy homes at any price.
However, the upper segment of the real estate market is still holding well. Even if it does lose 10 to 20% in the future, it still has appreciated well, IF you bought a while back.
What has been interesting in both market is that, whatever is truly genuine, truly old, truly in a good condition and has ample of documents, still trades and sells for decent prices in either markets. The ones who have suffered are the homes and cars that were made up too quickly, upgraded without second thoughts and rushed onto the market without really understanding the market. The common denominator for this segment is plain old greed.
But this year, no one is rushing to buy Camaros at $90,000 of last year’s pprices. The housing market does not see a rush to buy a 1500 sq ft, 2 bedroom, 1 bath bungalow at $1,000,000 anymore. However, the collector car high end segment is still doing well as the last auction showed for this 1962 Ferrari 330 TRI/LM Testa Rossa which sold for $9,281,250 and the buyer went on to buy another $10,000,000 worth of cars that same day. The stratosphere is still holding quite well in both, indeed.
Rick Carey over at Collector Car Market Journal posted a great spreadsheet that looks at overall numbers. The trend is down a little and less car sold. Still higher end have not run into the same problems as the lower end.
If trends in the collector car are anything to take into consideration, than the real estate market should continue it’s adjustment to reflect asking prices versus inflation. What I have found is the collector car market went through under a year what took the real estate market 5 to start becoming healthy. Maybe there is some trend to watch for in the future.
