Vintage Rolex market during Great Recession of '08/'09?

[jfmiii]

i didnt follow prices nearly as closely back then as i do now. does anyone remember what happened to prices of run of the mill 1680/1675/5513 watches? obviously vintage Rolex has been on a consistent upward trajectory for many years, but was there a correction in the market that occurred concurrently with the massive correction in other asset classes?

[Oyster99]

Interesting question. You can ask this for alot of (luxury)goods.
But i feel like the ones who can afford those nice watches will be able to afford them recession or not.
I am not sure at all how it actually went though.

excuse my english if i have made any errors.

[Loevhagen]

If it was indeed a correction at all, this would have been more widely known. I am not aware of any correction. The only "correction" I am aware of, is that the "annual" normal Rolex price increase during those years didn't happen.

[mdw3]

Yes, in late 2008 lasting until early 2010 there was a significant reduction in the market values for nearly all collectible merchandise, vintage Rolex included. By way of example, Paul Newman models that I was selling for just under $100K in early 2008 I was selling for around half that figure by late 2008. It was a slow, steady climb in recovery for several years, until the market accelerated and gained strength again in 2013.

Michael

[jfmiii]

Originally Posted by mdw3

Yes, in late 2008 lasting until early 2010 there was a significant reduction in the market values for nearly all collectible merchandise, vintage Rolex included. By way of example, Paul Newman models that I was selling for just under $100K in early 2008 I was selling for around half that figure by late 2008. It was a slow, steady climb in recovery for several years, until the market accelerated and gained strength again in 2013.

Michael

very interesting michael, thanks. extremely interesting that the price of those watches followed the SPX fairly closely. we lost about 50% in stock from peak to trough in '08/'09.

[joe100]

It dipped a bit during the depression, but has roared back

[rolfiz]

eBay was when everything took off, late 1990, early 2000... all watches, doubling in cost every year.

With a lot of models there wasn't much of a dip at all during the 2008/9 recession, it was more flat instead of constant increases. A lot of this had to do with the explosion in prices before 2008.

You have to consider, a BIG reason why so many luxury goods have been doing so well for the past decade, and continue to do well currently is free money. Interest rates are low so credit is cheap. Makes it easy to go wild and have fun.

When rates go back up and certain demographics focus on retirement, you will see a dramatic correction in value again. Mark my words.

[Loevhagen]

Originally Posted by rolfiz

eBay was when everything took off, late 1990, early 2000... all watches, doubling in cost every year.

With a lot of models there wasn't much of a dip at all during the 2008/9 recession, it was more flat instead of constant increases. A lot of this had to do with the explosion in prices before 2008.

You have to consider, a BIG reason why so many luxury goods have been doing so well for the past decade, and continue to do well currently is free money. Interest rates are low so credit is cheap. Makes it easy to go wild and have fun.

When rates go back up and certain demographics focus on retirement, you will see a dramatic correction in value again. Mark my words.

Not a coherent assessment. I marked your words.

[rolfiz]

Originally Posted by Loevhagen

Not a coherent assessment. I marked your words.

You got me. In the context of this conversation it cannot correct again as it never really has.

But, at points in time, prior to 2000, many watches would fluctuate in value quite considerably. More than enough to qualify as a correction, 10% of greater.

[mdw3]

Originally Posted by rolfiz

With a lot of models there wasn't much of a dip at all during the 2008/9 recession, it was more flat instead of constant increases. A lot of this had to do with the explosion in prices before 2008.

Not true. I was there in the trenches, trying to continue to buy and sell watches, with very few buyers at any price, and very few sellers willing to look outside their windows and acknowledge it was raining. Trust me, the general reduction in value we dealers applied in purchasing stock in late 2008 was at about half of the pre-crisis value. Across the board, almost uniformly. If you don't remember, then you weren't there.

Michael

[andromeda160]

Originally Posted by mdw3

Not true. I was there in the trenches, trying to continue to buy and sell watches, with very few buyers at any price, and very few sellers willing to look outside their windows and acknowledge it was raining. Trust me, the general reduction in value we dealers applied in purchasing stock in late 2008 was at about half of the pre-crisis value. Across the board, almost uniformly. If you don't remember, then you weren't there.

Michael

Sounds like the 70's

[el1125]

Prices will drop if market continues to decline as it has this week. Quite awful.

[rolfiz]

Originally Posted by mdw3

Not true. I was there in the trenches, trying to continue to buy and sell watches, with very few buyers at any price, and very few sellers willing to look outside their windows and acknowledge it was raining. Trust me, the general reduction in value we dealers applied in purchasing stock in late 2008 was at about half of the pre-crisis value. Across the board, almost uniformly. If you don't remember, then you weren't there.

Michael

Well, I was there, and in fact, I remember selling several significant items during that time period.

Half was not my experience.

A good example with a 16200, in the early 2000s, I remember clearly buying them for around $1800, to $2000. I remember them going up to perhaps $2500, and then coming back down to $2000 at the peak of the recession, but quickly after and still now being $3500 to $4000.

I viewed the fluctuation as remaining flat as I felt that pre-recession bump was not reflective of correct value. Just as I do not feel current value is accurate either.

To suggest half however, I did not experience a single drop of half value, but you might have been dealing with a different demographic or category. I could not speak to a $50K time piece.

[mdw3]

Originally Posted by rolfiz

Well, I was there, and in fact, I remember selling several significant items during that time period.

Half was not my experience.

A good example with a 16200, in the early 2000s, I remember clearly buying them for around $1800, to $2000. I remember them going up to perhaps $2500, and then coming back down to $2000 at the peak of the recession, but quickly after and still now being $3500 to $4000.

I viewed the fluctuation as remaining flat as I felt that pre-recession bump was not reflective of correct value. Just as I do not feel current value is accurate either.

To suggest half however, I did not experience a single drop of half value, but you might have been dealing with a different demographic or category. I could not speak to a $50K time piece.

A 16200 is not a collectible watch. As fine a timepiece as it may be, it bears no relation to the equity and asset markets, and is not pursued by the financial "Masters of the Universe" who move the collectibles markets. All the collector markets were affected in a big way by the crisis of 2008-09, from 1680 red Subs to Patek 2499 perpetual chronos, and from classic Ferrari of the 1960s up to major Warhol paintings. I saw first-hand, and lived through it daily.

Michael

[MILGAUSS88]

I was selling watches during that time but not high end.
I would say flat for lower end.
Down 20-25% for mid grade.
And I would have to take Michaels word that high end was down 50%.

[mdw3]

Of course, in the lower-range models, values didn't typically fall by 50%, but the losses in value were significant. By way of illustration, in pre-crisis 2008 I was generally seeing nice red Subs around $10k, matte 5513 around $5K, and matte 1675 around $4K. By early 2009 I was buying these models around $6K, $3,500 and $3K, respectively. And, in that period, I was able to buy locally no fewer than 5 Rolex sport watches of these types PER WEEK, and I wouldn't even look at two-tones or later sapphire models.

One morning on a day early in the crisis, I was offered a very nice 6241 Paul Newman Daytona from a dealer I worked with often. None of us knew how to price this model yet, at that moment, so I deduced that, since this was a model I would have sold for as much as $90K pre-adjustment, I would surely be safe purchasing at $50K. By that afternoon, having tried and failed to sell to several reliable buyers, I made the decision to accept the best offer I had received-- $48,000-- and took a $2,000 loss and a good lesson. Don't try to catch a falling knife.

Michael

[The_Walrus]

Originally Posted by mdw3

Of course, in the lower-range models, values didn't typically fall by 50%, but the losses in value were significant. By way of illustration, in pre-crisis 2008 I was generally seeing nice red Subs around $10k, matte 5513 around $5K, and matte 1675 around $4K. By early 2009 I was buying these models around $6K, $3,500 and $3K, respectively. And, in that period, I was able to buy locally no fewer than 5 Rolex sport watches of these types PER WEEK, and I wouldn't even look at two-tones or later sapphire models.


One morning on a day early in the crisis, I was offered a very nice 6241 Paul Newman Daytona from a dealer I worked with often. None of us knew how to price this model yet, at that moment, so I deduced that, since this was a model I would have sold for as much as $90K pre-adjustment, I would surely be safe purchasing at $50K. By that afternoon, having tried and failed to sell to several reliable buyers, I made the decision to accept the best offer I had received-- $48,000-- and took a $2,000 loss and a good lesson. Don't try to catch a falling knife.

Michael

Interesting Michael. I'd love to be a watch dealer (bank roll is one obstacle). Can't imagine all the amazing pieces that have passed through your hands. I'd be a hobby that generates you an income.

[dysondiver]

08 09 was a dip , ,,, the 80s were tough ,,, i fear we are about to see the 20s again.

[lhanddds]

Bought a lot of my vintage watches post 2008. It was a great time for buying watches. I also sold a 1655 before the crash for 20K. I wish I had it back now even through I did well.

[fusionstorm]

I'll add to mdw3's perspective of watch values cratering 7 years ago, but from the collector (for the most part) side.........

Most all of the collection (current and past) listed in my sig was purchased during the Great Recession. My first vintage, a 1655, was purchased before the vintage market went into a noticeable dive. I could've bought close to a comparable example after the dive for $2K-$3K less. It has since recovered and, as of a month ago, would sell for more than what I paid per Jacek at HQ Milton.

I did very well picking up red Subs and matte 16660 Sea Dwellers during the downturn. Lucky for me, I sold a feet first red 1680 and a matte 16800 (both full sets) in the past several months. They had both appreciated well in the 5 and 3 year periods respectively from when I'd originally purchased them. The dial of my meters first red 1680 is worth more alone now than what I paid for the entire watch during the Great Recession.

I do regret not picking up full sets with punched guarantee papers of 1675 GMTs and 5513 Subs during the downturn. Those could be found in the $5K-$6K range for decent examples. As of last week, those had easily doubled in price.

And it wasn't just vintage Rolex that was affected. The Panerai 048 that I had was also bought during the downturn for a good discount off of its original retail. I never took to it, but was able to sell it for more than I paid a couple years later (which still was a good discount off the value of it then; I basically "sold it forward" by selling to another forumite on the forum where I originally met and bought from the seller).

It will be interesting to see where things go in the coming weeks/months.

[Franks07]

While this thread currently represents a very small fraction of the WIS community; my sense is a building "gloom and doom" mentality of the near term future of vintage Rolex pricing (i.e. a "correction")
If correct this may provide a nice opportunity for some folks that have recently been shut out of the vintage Rolex market to make an entry...which in my view could be a good thing.
To restate what has been said here many many times...always invest in the best possible examples of your targeted references and your long term investment experience is far more likely to be favorable as there will always be a demand (albeit at a possibly lower short term price) for the top tier pieces.
In the meantime I plan to continue to enjoy my vintage pieces for all the right reasons and not worry about any possible impending price "corrections" that may or may not be looming. The common experiences that have been shared thus far By those that were involved with vintage Rolex during the most recent recessionary climate is that It provided some nice buying opportunities and any paper loss experiences have since been more than washed out over the long term.
I plan to hold on to this one throughout whatever the future holds for vintage Rolex pricing as it has done fairly well over the 60+ years of ownership in my family with an original purchase price of a little north of $100

[Loevhagen]

So all this about "correction" and vintage prices just because the oil price is going down?

[fusionstorm]

Originally Posted by Loevhagen

So all this about "correction" and vintage prices just because the oil price is going down?

Oil has been declining for awhile. That's not the cause of this discussion.....

[Loevhagen]

Originally Posted by fusionstorm

Oil has been declining for awhile. That's not the cause of this discussion.....

I know that - but some herein seems to think it is happening again any time soon.

[springer]

Originally Posted by jfmiii

i didnt follow prices nearly as closely back then as i do now. does anyone remember what happened to prices of run of the mill 1680/1675/5513 watches? obviously vintage Rolex has been on a consistent upward trajectory for many years, but was there a correction in the market that occurred concurrently with the massive correction in other asset classes?

In answer to your question regarding prices for "run-of-the-mill" Rolex after the market crash in 2008, nothing substantial occurred to the prices of these watches. Prices were fairly reasonable before and after the crash. As others mentioned, the high-dollar watches suffered the most, just like high-end collector cars and other high-end collectibles. I was buying back in 2008, like I was many years before the crash and years after the crash. According to my spread sheet for such watches as GMT 1675s, Submariner 5513s and 1680 non-reds, etc. the prices have slowly but surely been appreciating for many years, even before the crash.

The high-dollar watches will always be the first ones to tank during a market correction.

[jedly1]

let me add in a slightly different perspective here, its one i have covered before when this comes up sorry ....Like Michael , i was buying in the trenches and , in fact buying like crazy all the way through 2008/9/10 and in fact sometimes at auctions i would be the only person buying. As a dealer in a buyers market i think you are at the sharp end and see the biggest % swings as you are in a position to drive a hard bargain.

as a wise jedi once said ....

Luke, you're going to find that many of the truths we cling to depend greatly on our own point of view

I dont necessarily disagree with anything Michael says ....from his point of view , and that is the key ....it all depends on where you stand ....from where i stand the market dropped by a minimal 5-10% for a while, but much more than a change in price the market became focused on collectors as buyers and quality pieces , rather than model ref buying and financial speculation and the difference on how you see it depends on what currency you work in.

it may come as a shock to learn that there are other currencies than the USD and the majority of the market for watches exists well outside the US border. The biggest thing that happened n the recession was a shift in currency exchange rates, with a flight to the USD.

In a very short space of time the USD strengthened by 25- 30% ...in a falling global market place this should have meant that if all other things remained equal the price of a watch in USD fell by 25-30%. this had nothing to do with watches, demand , passion , changing trends etc ,.... just real big real world factors and fears that led to a currency shift.

if you want to consider the value of your watches , pay close attention to movements in your currency , that will impact pricing much more than anything else , and that is fickle thing led by big monetary policy factors and forex traders alike .

when confidence is low as it was then the market will move down to the lowest common denominator global pricing , when confidence (and demand) is high it will move UP to the highest pricing ( much as it has done in last year or two).

in 2006 if a red sub cost £6k Gbp for example, that was up in the $12kUS region ....by 2008 a red sub still costing £6kgbp was now $8.5k,......has the watch devalued or has the currency devalued ?

so in answer to the original question in my experience ,if you work in USD ...30-40% apparent fall was your norm....but this would have been true of any globally held assets rather than anything to do with the intrinsic value of the watch.


on a side note, spare a though for my poor Australian neighbours who are seeing the exact opposite now , with the AU$ weakening by about 30% from their point of view the entire vintage watch market has just priced many of them out full stop :

[jedly1]

(sorry john , as someone who deals in the high dollar watches , i would say this was incorrect , taking out the currency factors i mention above, i would say the high dollar watches were actually the least effected.


the simple fact is that when it becomes a collectors market the pool of buyers becomes much smaller, much more specialised and knowledgeable , and I'm also sorry to say much more populated by the big ticket kind of guys for whom a recession goes almost un noticed, and these guys aren't buying red subs or GMTS.

from what i saw the guys that were left around were guys who are already infected by the watch disease to a real big level, and they mostly already had collections of the more common stuff , or the guys who just like buying expensive shit. Its the guys who have job security, mortgages and loans to worry about that evaporated.

[jfmiii]

this is really insightful to hear from dealers. thanks for your responses guys. will be interesting to see what happens to prices if we do see a full 20% correction in US equities. what were $4k GMT/Subs are now double, or more, in price. if people get freaked, and demand massively dries up and supply remains merely constant, it will be interesting to see where prices head.

[QueueCumber]

If any excellent condition, period correct, and authentic Newmans are around for $50k, let me know. I'll buy and hold until the market recovers...

[Beelzy]

2008..the year nobody loved.