ROBERT BARRIE
IS IT WRONG TO TALK ABOUT PRICES, PONDERS ROBERT, AS SOME SEEM TO THINK? THERE’S DEFINITELY MOVEMENT IN CLASSIC PORSCHE VALUES, WITH SOME RISING AND SOME FALLING…
On values – and more
Ienjoyed Classics at the Castle again. It was less dynamic without the parade runs down the driveway but, as always, there were great cars to see, people to meet and plans to be made. I spent some time with publisher Clive and editor Keith at the Classic Porsche stand. We remembered a pub lunch a year or two back convened to discuss the contents and direction of this very magazine. One of the attendees took the outside-the-box approach.
Itʼs called Classic Porsche, he said, but does it really need to be about Porsche and do they really need to be old? We considered the idea carefully before concluding that, on balance, it probably did need to be about Porsches and they probably did need to be old. Encouraged by the openminded ambiance, I suggested we might add a column covering market conditions. It turned out to be an awful faux-pas.
The assembled company was appalled. Absolutely not, they all said immediately, and at once. You can write about almost anything you like, but you never mention buying or selling, or the prices of cars. I have not been invited back…
I am exaggerating slightly, of course, but only slightly. Itʼs clearly not the main thing for the enthusiast, but I donʼt think many of us are – or can afford to be – completely indifferent to what our cars are worth. Here, then, for those that care, are some observations on the subject. The puritanical should probably turn the page. For the rest of us, the key point is that the market has slowed.
Volumes are down and prices have stopped rising. Cars are still changing hands, and sometimes for very large amounts of money, but itʼs on a more considered basis. A clearer distinction is being made between the models and examples that are genuinely historic and rare and widely accepted as such and cars that are simply old. The latter can still be a lot of fun, as we know, but it shouldnʼt be particularly expensive fun.
We have gone, as the old cliché puts it, from a market with more buyers than sellers to one with more sellers than buyers. The main price indices are roughly flat. To put that into perspective, one of them – the Historic Automobile Groupʼs HAGI index – suggests prices rose at a peak annual rate of almost 50 per cent in late-2013 and were still rising at a double-digit rate last year. They went up a long way and for a long time.
The indices reflect trends across the market as a whole. Inevitably, some of the constituent parts do better than the headline number and some do less well. Hagerty, the insurer, sets out its numbers in some detail. They reckon the prices of Carrera 2.7 RSS in average condition have fallen by roughly 15 per cent in the past three years. Interestingly, they also reckon the prices of 356 Speedsters in similar condition have risen by roughly 20 per cent. We can argue about the exact numbers, but the general pattern is probably right.
The models that were bid up most strongly, such as the Carrera 2.7 RS, are the ones that have seen the more recent correction. Those where the price rise was more moderate, such as the 356 Speedster, have not suffered so much.
The Hagerty numbers also make a further point. They suggest the prices of Carrera 2.7 RSS in the top condition category have continued to rise in the past three years, as those in the average category have fallen. Itʼs the market making another distinction.
Few of us are in the fortunate position of being directly affected by Carrera 2.7 RS and 356 Speedster prices, but what is true of those models is also true, to a lesser extent, of others. The early 911 market has been more volatile than the 356 market.
So, what might happen next? I mentioned previously that I used to make forecasts for a living and gave up as soon as I realised I got most of them wrong. However, while I was at it, I learned that market movements can, and often do, go further and/or faster than expected. That is, after all, what happened on the way up.
Most commentators continue to expect a modest correction this time and, for the most part, I think they are probably right. Itʼs still not clear what could trigger a harder landing. Even so, if I were advising on acquisitions and retentions, I would stress the need to own the right car and not just any car.
As before, that means the models and examples that are genuinely historic and rare and are widely regarded as such. To muddle my metaphors, the rising tide lifted all boats. Now itʼs going out, weʼll see who is wearing the Speedos and who, in the words of Warren Buffet, has been swimming naked. CP
“THE EARLY 911 MARKET HAS BEEN MORE VOLATILE THAN THE 356 MARKET…”