As we head into Arizona Auction Week, the Hagerty Market Rating reports a marketplace that is down for the second consecutive and for the seventh time in the past eight months. The January rating is 70.63, down from 71.00 in December.
- The biggest drop in auction activity with the fewest number of cars sold in the past 20 months;
- A decrease in private sales for the fourth month in a row;
- An average private sales price that was the lowest Hagerty has recorded in the past year;
- Activity also decreased, and has done so for the fourth straight month. The average private sales price is the lowest it’s been in the past year.
On the other hand, Hagerty noted that expert sentiment was up slightly, and in particular those who follow the hobby most closely noted optimism for the lower and middle portions of the marketplace, and that the Hagerty Price Guide portion of the market rating experienced a small increase that slightly outpaced previous projections.
So what does this mean as the 2016 classic car auction year begins?
“Twenty-fifteen proved to be a strong market, but signs of deceleration emerged throughout the year,” McKeel Hagerty, chief executive of the family-owned classic car insurance and valuation company, said in a news release.
“Dealers reported longer hold times for traditional collector vehicles, average sale prices in the private market declined slightly after several years of aggressive increases, and value increases among Hagerty’s insured clients slowed,” he explained.
“Also,” he added, “as a result of several years of record sales, cars in near-perfect condition became harder to find.”
However, Hagerty continued, “There are still many bright spots which included significant activity for Datsun 240Zs, Porsche 911 Turbo’s (specifically models from 1975-1977 and 1986-1989), and Series I and II Jaguar E-Types.
“We are most excited about the market starting to warm up to newer collector vehicles that are attracting younger buyers. As we reported in December, the five top value increases were all models with generations that extended into the 1980s.
“We are looking forward to the collector car auctions in Arizona and Mecum’s Kissimmee sale, which are viewed together as a bellwether of the overall market. Recent market factors such as low oil prices and rising interest rates coupled with fewer high-dollar cars offered in the upcoming auctions are creating a wait-and-see approach for many people.”
The Hagerty Market Rating is based on a weighted algorithm that considers 15 proprietary data points in eight categories, including public auction and private sales, values of insured cars, price-guide values, Hagerty’s own index system and input from industry experts.
The rating, reported at the middle of each month, is based on a 100-point scale and is presented in the form of a tachometer-style gauge, complete with a “superheated” red zone, a sort of warning that we’re approaching a possible burst of the bubble. Ideally, the market cruises along comfortably in the 60- to 80-point “expanding” zone.
Although first released in January 2015, Hagerty applied its formulas to the classic car marketplace dating back to January 2007. The rating then was in the low 60s. During the economic recession, it slumped to the high 40s and has been on an upward trend since late 2010.
The monthly rating was at an all-time high of 72.04 in May 2015.