The photograph here summarizes Scottsdale during auction week 2016. When the sales were done, thunderstorms dumped on the region, dense grey clouds remained overnight and through the next day, temperatures dropped, and it became even more clear that the only electricity in any auction hall in the days before this had come from high tension overhead power lines crisscrossing the region. Even during the sunny skies and idyllic temperatures we enjoyed Wednesday through Sunday, a number of buyers, sellers, and observers felt themselves “wrong footed” – to use auction parlance for being out-of-sync in the desert.
As for Scottsdale’s sales, let’s return to those four questions we raised in our January issue:
Is Porsche’s luster is fading?
Read our guest commentator Kevin Watts’ story – Did Someone Yell ‘Fire!’? – and you’ll have a very clear perspective.
We believe the luster decidedly has not diminished. Instead, buyers have grown smarter, become more shrewd, even have become brazen. Bidding at Scottsdale became a game of brinkmanship. Those who raised their paddles tested the nerve of other buyers and of the houses. The ones who were the most cagey often waited past the third (and final) call to shout out a disruptive bid, always knowing they could slip behind the curtain (at the invitation and encouragement of the house) to negotiate a post-auction private sale. Because of this, buyers could approach that transaction with a better idea of the moment when the other side – the seller – was going to blink. When the reserve no longer was a line in the sand but instead represented a strategy.
Auction house estimates are based on a mix of complex mathematic progression and, simply put, crystal ball gazing. With auctions occurring – somewhere in the world – nearly every week or weekend, it is impossible for auctions houses to adjust estimates and catalog printing schedules to breaking news. Remember a year ago? On January 15, 2015 – on the eve of the 2015 Scottsdale auctions – the Swiss government “floated” the value of its Franc against the Euro, the Great Britain Pound, and the U.S. Dollar. Large disruptions in currency values happened within hours. Many European buyers who had flown to Scottsdale sat on their hands through the weekend. (Perhaps that is why they did not come this year, preferring to support sales closer to home at Paris’ Rétromobile?) The Swiss re-valuation was impossible to predict, and if someone could have done it, many governments would be deeply into investigations of their insider knowledge.
Is common sense returning?
Well, the two-fold answer to this is yes. Yes, because, as Road Scholars Magazine has written before, those who desire these cars most likely already have them. And yes, because those who missed an earlier opportunity may be discovering themselves “priced” back in.
Did you miss your selling opportunity?
That seems a realistic – if discouraging – assessment.
Is a new acquisition window opening?
Therein lies the rub, to misquote Hamlet in Shakespeare. Scottsdale (and initial results from Paris Rétromobile sales in early February) suggests that car auction transactions have once again become a buyer’s market.
But this demands that those enthusiasts who believe they are re-invited into the market must remember Buying Rule Number One: Caveat Emptor. Latin for Buyer beware.
Short hand for Expect To Be Abused.
Buy only what you know.
If you don’t know it…well…be prepared to spend significantly more money after the purchase to get to know it, and to get it to where you thought it was when you spent so much to acquire it.
Randy Leffingwell
Editor, Road Scholars Magazine
randy@road-scholars.com