Another exciting mid-August week at Pebble Beach is behind us, and it seems the only way to describe it is “same old, same old.” The auction houses (RM/Sotheby’s, Gooding, and Bonhams) had a good week and some great cars changed hands. The overall dollar amount was down but a closer look provides a simple answer.
During this year’s car week, the quality of cars offered by the big three auction houses was up overall. Bonhams sold virtually every lot (101 of 115) offered and their quality definitely improved over their past offerings. RM/Sotheby’s had another great sale (82 of 100) with a good sell-through rate limited only by a handful of cars consigned by owners who would not budge on reserves. A couple one-off’s, it’s a toss up as to value. For the production cars with “one in every big auction,” the sellers needed to be more realistic and they should have sold their cars. Gooding also had a good sale (114 of 137) with Saturday being stronger than Sunday. Sunday night was a tough time slot; bidders were exhausted from an over-filled week and done-in after a long day at the Pebble Beach Concours or the Monterey races. Overall, about an 85% sell-through rate from these three houses was strong.
The other used farm-equipment style auctions with their carnival barkers had way too much “made for TV” drama, and you could not tell what was real or what was the house of mirrors. This way of auctioning off cars may have run its course, at least in this market in this venue. Mecum offered 693 cars and Russo and Steel added another 228 cars. They sold 427 of the combined total of 921 lots offered, giving the two operators roughly a 47% sell-through rate.
The overall dollar amount was down roughly $50,000,000 from last year. That figure inspired Bloomberg to write about a bubble. But luckily they are only looking in from afar and simply don’t know the facts. Here’s an easy fact to look up: RM/Sothebys is held at the Portola Hotel and Spa, and these facilities are under heavy remodeling construction. RM/Sotheby’s could not fit in the 150 cars that is their norm for this week and they had to cut that number by a third. Bam! There’s your missing $50,000,000!
The takeaway from August on the Monterey Peninsula was the same as it has been for the last couple years: great, documented cars bring great money and sell. Regular production cars with average miles in average condition will sell for an average price. RM/Sotheby’s, Gooding, and Bonhams offered their clients a good service and they delivered. Mecum and Russo & Steele collected entry fees, had some unrealistic reserves, and in the end they left more than half of their clients disappointed.
In the end, 50 fewer great cars at RM/Sotheby’s – combined with unrealistic expectations on used cars values – easily explains the drop in sales.