When do you think secondary market prices will bottom out?

[thatswhatshesaid]

Originally Posted by Mystro

No, Rolex as a brand has moved from that position in 2017. It was very apparent that Covid has given Rolex a free look to where they can go and they have capitalized on it moving upmarket. The fact Rolex is using "display only" models confirms they will never have semi full display cases again at their AD. Rolex of 10 years ago is gone regardless what the momentary economy is doing.

As a business owner of 23 years I have learned to never say never.

[Onequik135i]

Originally Posted by 1William

The market moves based on many factors. We also see seasonal pauses and surges but the large Trusted Sellers know this and are capitalized to such an extent that it is just the passing of time for them. Movement up or down in pre-owned prices at around 10% is just the fluctuation in the market. You can not get a hot watch from an AD even still unless you fall into the lucky/whale/significant spend or all of the above. Someone always posts a walk in where they were able to buy a SS Daytona/BLRO or other desirable watch. This is very much the exception and not the rule. As much as the naysayers want us to have a recession and everything collapse so they can buy a watch it is not going to happen. Economic numbers do not show that and we are heading into an election year in the U.S. and typically the government does everything in its power to have a good economy during this cycle. Let interest rate decline, the housing market will explode followed by the automobile industry and money will be flowing again. Then the price on theses watch will blow up again because there will be pent up demand, no more production and plenty of money. Just my thoughts.

I tend to agree with this /\/\/\

[Ceriano]

Originally Posted by 1William

The market moves based on many factors. We also see seasonal pauses and surges but the large Trusted Sellers know this and are capitalized to such an extent that it is just the passing of time for them. Movement up or down in pre-owned prices at around 10% is just the fluctuation in the market. You can not get a hot watch from an AD even still unless you fall into the lucky/whale/significant spend or all of the above. Someone always posts a walk in where they were able to buy a SS Daytona/BLRO or other desirable watch. This is very much the exception and not the rule. As much as the naysayers want us to have a recession and everything collapse so they can buy a watch it is not going to happen. Economic numbers do not show that and we are heading into an election year in the U.S. and typically the government does everything in its power to have a good economy during this cycle. Let interest rate decline, the housing market will explode followed by the automobile industry and money will be flowing again. Then the price on theses watch will blow up again because there will be pent up demand, no more production and plenty of money. Just my thoughts.

You miss one important factor and that’s sentiment. It was easy to justify buying watches when they were considered an investment. That’s no longer the case. While I do expect rate cuts, feds know better than that to cut too aggressively. Otherwise inflation will go right back up.

[padi56]

Originally Posted by Ceriano

Summer is usually the weakest month, do you think we finally see the bottom in the summer of 2024? What would take for the market to capitulate?

When Rolex watches stop being thought of as little more than £$€ objects and little more.

[JC316]

Drop, drop!

[Rolexatlast]

When they stop being fashionable - when the influencers get bored, and celebrities move on to something else.

I’m sure by 2030, people will be laughing about everyone wanting a Rolex in the early 2020s

[Dan Pierce]

A week from Thursday.
dP

[ikincooper]

Originally Posted by Dan Pierce

A week from Thursday.
dP

Not a week on Friday?

Haha


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[bonovox]

Originally Posted by Dan Pierce

A week from Thursday.
dP

[PhilAviate]

Most demand for Rolex of late was based on the premise that there would be more demand soon after and forever more. Many watches were sold purely for speculative reasons.
That is not the case now. Now the axe has fallen and has a long swing down.

Anyone who is thinking the very unique circumstances of the last 3 years are going to be the norm forever I believe are mistaken.

As for the economy being good. I'm not sure what planet you live on, but the USA is in terrible state. You owe $250k+ as a tax payer the second you are born.... China is facing deomgraphic collapse. Just because CNN or whever is saying it is great, it doesn't change the fact inflation is still out of control and cost of living for many is unmanageable.

[Krash]

Originally Posted by PhilAviate

As for the economy being good. I'm not sure what planet you live on, but the USA is in terrible state. You owe $250k+ as a tax payer the second you are born.... China is facing deomgraphic collapse. Just because CNN or whever is saying it is great, it doesn't change the fact inflation is still out of control and cost of living for many is unmanageable.

Exactly. The media says inflation is going down. But it’s not. The rate at which inflation is increasing is going down. There’s a big difference between the two. Plus, GDP numbers are artificially inflated due to those spending packages that most people don’t benefit from.


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[miama]

I think everything gonna go back to how it always was and below retail. SS gmts and SS daytonas and other stuff like tifany op etc will drop but still keep a premium. Yes, today there is a shortage of these watches because demand became crazy as they became investments but this is only the past few years. If Rolex keeps making over a million watches and increasing prices, I am convinced the demand won't be like this in 10 years. over 10 million new watches in the market assuming they don't double production and the demand stays the same that's ridiculous.

[Hollie_Rollie]

Originally Posted by miama

I think everything gonna go back to how it always was and below retail. SS gmts and SS daytonas and other stuff like tifany op etc will drop but still keep a premium. Yes, today there is a shortage of these watches because demand became crazy as they became investments but this is only the past few years. If Rolex keeps making over a million watches and increasing prices, I am convinced the demand won't be like this in 10 years. over 10 million new watches in the market assuming they don't double production and the demand stays the same that's ridiculous.

Exactly. And the way 90% of owners maintain the pristine condition of their watches…you’ll have 10 million plus the already millions in circulation all looking new.

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[77T]

I’m not sure “bottom out” is ever a term for the secondary market.

Maybe “crossover” is better. That is, in terms of MSRP. Meaning the point where BNIB SS on secondary market is at or below MSRP.

I don’t see it as a time call as much as a conditional call - like a serious depression that kills excess demand completely.

I don’t see it happening in the next year.

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[BraveBold]

The problem with anyone calling for a sharp drop is that the market is dynamic.

Recession hits, demand is lower, inflation (already much more controlled) turns to deflation. Deflation plus interest rates at 5%+ in US means Fed can cut aggressively. Fed cutting buoys spirits, causes assets to rebound after a temp drop and all starts over.

Time and time again - so long as you aren’t panic selling at bottoms or FOMO buying at tops, these recession calls aren’t changing much absent a systemic shock (2009).

So, I see watches getting easier to get, the real grails still being elusive and at significant premiums. If prices drop faster it will be due to a sharper macro decline. By the time you have time to buy some watches at those lower prices the moves will already be in place to inflate prices back up again. So for those salivating on the sidelines, if this plays out, be quick…

Oh, and several trillion dollars are on the sidelines so don’t expect too big a bargain either ;-)

[4reRlxGuy]

Prices have taken a hit in the pre-owned mkt. I've purchased an AP diver for about 50% of its peak $ which is about 30% off retail, several vintage rolex(s) for around 40% off their highs, and 3 PM sports model below msrp.

[PhilAviate]

Originally Posted by BraveBold

The problem with anyone calling for a sharp drop is that the market is dynamic.

Recession hits, demand is lower, inflation (already much more controlled) turns to deflation. Deflation plus interest rates at 5%+ in US means Fed can cut aggressively. Fed cutting buoys spirits, causes assets to rebound after a temp drop and all starts over.

Time and time again - so long as you aren’t panic selling at bottoms or FOMO buying at tops, these recession calls aren’t changing much absent a systemic shock (2009).

So, I see watches getting easier to get, the real grails still being elusive and at significant premiums. If prices drop faster it will be due to a sharper macro decline. By the time you have time to buy some watches at those lower prices the moves will already be in place to inflate prices back up again. So for those salivating on the sidelines, if this plays out, be quick…

Oh, and several trillion dollars are on the sidelines so don’t expect too big a bargain either ;-)

Not really, Rolex were not like the last 3 years even in times of much better economy. We don't need total collapse to return to what it should be.

The last 3 years were a unique situation, and there is absolutely nothing to support that continuing; all trends show the bubble has firmly burst, now it's just a case of who blinks first.

Based on close to 100 years of the watch market it would be more normal for a return to 2015-19 type market, even if the economy is excellent, which it isn't.

A normal economy would suggest a return to normal. Normal is walk in for everything except a few particular models, discounts on many, and grey/used prices below msrp.

Rolex and watch sales of late were driven by demand of people wanting to buy them as they assumed even greater demand would follow. It no longer is.

The hype train has moved on.

I'd also bet that a solid 25-50% of all Rolex demand right now is people who are chasing them, simply because they are still seen as hard to get. But they are becomming more easily available by the day, so the FOMO people will lose all interest when they're actually available.

[BraveBold]

Originally Posted by PhilAviate

Not really, Rolex were not like the last 3 years even in times of much better economy. We don't need total collapse to return to what it should be.

The last 3 years were a unique situation, and there is absolutely nothing to support that continuing; all trends show the bubble has firmly burst, now it's just a case of who blinks first.

Based on close to 100 years of the watch market it would be more normal for a return to 2015-19 type market, even if the economy is excellent, which it isn't.

A normal economy would suggest a return to normal. Normal is walk in for everything except a few particular models, discounts on many, and grey/used prices below msrp.

Rolex and watch sales of late were driven by demand of people wanting to buy them as they assumed even greater demand would follow. It no longer is.

The hype train has moved on.

I'd also bet that a solid 25-50% of all Rolex demand right now is people who are chasing them, simply because they are still seen as hard to get. But they are becomming more easily available by the day, so the FOMO people will lose all interest when they're actually available.

Perhaps you didn’t read what I wrote and you’re responding to something else?

I said most watches will be easier to get but the highly demanded ones will remain at significant premiums.

This was the case in 2015-2019 too…

[321Forever]

Many of us can recall when you could go to a place like Singapore in the 1990s and find that every Hour Glass or Cortina store had a wide array of sport Rolex models, with the only exception being a Daytona. FOMO wasn’t a thing.

[EH92]

It will bottom when the SA of my regular AD stop messaging me offers of watches that I do not want... literally every week. Im done with modern rolex

[amh]

Originally Posted by EH92

It will bottom when the SA of my regular AD stop messaging me offers of watches that I do not want... literally every week. Im done with modern rolex

Ha, I'm seeing the same thing.

[Cassian739]

You'll know secondary market prices have bottomed 3-6 months after they actually do - no one can pick a bottom. I think the "good old days" of Rolex availability will never return, but, I also don't think we'll return to the March 2022 crazy. Rolex will continue to shift to boutiques, more watches like the Le Mans will appear - PM, open case back, maybe some hand made watches to compete with Patek, etc. In reality, they can't sell +1M watches a year and abandon the SS and TT base models.

[Ceriano]

Originally Posted by Cassian739

You'll know secondary market prices have bottomed 3-6 months after they actually do - no one can pick a bottom. I think the "good old days" of Rolex availability will never return, but, I also don't think we'll return to the March 2022 crazy. Rolex will continue to shift to boutiques, more watches like the Le Mans will appear - PM, open case back, maybe some hand made watches to compete with Patek, etc. In reality, they can't sell +1M watches a year and abandon the SS and TT base models.

Highly doubt it. They have a hard time selling their PM models at msrp with the current production rate. Imagine they make +1M high end pieces, they’d be sitting on pile of inventory. Rolex is geared towards upper middle class. Very few can shell out $100k+ for a watch.

[355F1]

Originally Posted by Ceriano

Rolex is geared towards upper middle class. Very few can shell out $100k+ for a watch.

True. But even upper middle class is not enough to warrant dropping a hundred large on a watch.


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[Cassian739]

Originally Posted by Ceriano

Highly doubt it. They have a hard time selling their PM models at msrp with the current production rate. Imagine they make +1M high end pieces, they’d be sitting on pile of inventory. Rolex is geared towards upper middle class. Very few can shell out $100k+ for a watch.

I agree with you, which is why I said "they can't sell +1M watches a year and abandon the SS and TT base models." I could have worded it better. Basically, they will still need their SS and TT base models to drive volume and revenue, but, Rolex will try to keep the image of exclusivity with ~6 month waits or more for certain pieces (Sub, GMT, Skydweller, Daytona) - which I think is fine to protect the brand. However, I do see them continuing to move up market to try and compete with Patek through new complications, limited edition PM pieces sold in boutiques, maybe hand finished pieces, etc. Patek comfortably sells 60,000+ high-end watches a year, so Rolex can continue to move upmarket.

Who really knows, I could just as easily be wrong, but I'm bored on a Monday night so might as well pontificate about The Crown.

[Ceriano]

Originally Posted by Cassian739

I agree with you, which is why I said "they can't sell +1M watches a year and abandon the SS and TT base models." I could have worded it better. Basically, they will still need their SS and TT base models to drive volume and revenue, but, Rolex will try to keep the image of exclusivity with ~6 month waits or more for certain pieces (Sub, GMT, Skydweller, Daytona) - which I think is fine to protect the brand. However, I do see them continuing to move up market to try and compete with Patek through new complications, limited edition PM pieces sold in boutiques, maybe hand finished pieces, etc. Patek comfortably sells 60,000+ high-end watches a year, so Rolex can continue to move upmarket.

Who really knows, I could just as easily be wrong, but I'm bored on a Monday night so might as well pontificate about The Crown.

My bad I misread it! :) 100% agreed!

[colonelpurple]

Originally Posted by Ceriano

Highly doubt it. They have a hard time selling their PM models at msrp with the current production rate. Imagine they make +1M high end pieces, they’d be sitting on pile of inventory. Rolex is geared towards upper middle class. Very few can shell out $100k+ for a watch.

Rolex will keep demand > supply by either pushing up prices or restricting supply. It is a private company, they can do whatever they want.

They will also try to up the focus on bi-metal and precious metal, where there is far more margin.

I read an interview with the had of Patek. He said they didn't make money from selling SS models. They only keep a few around for fans, but otherwise everything is going to precious metal. Obviously they are tiny compared to Rolex, but the sentiment is the same. The main difference is that Rolex sells enough watches to keep a margin for SS, and also knowing they are buoyed by enthusiasts who mostly like SS watches.

[Ceriano]

Originally Posted by colonelpurple

Rolex will keep demand > supply by either pushing up prices or restricting supply. It is a private company, they can do whatever they want.

They will also try to up the focus on bi-metal and precious metal, where there is far more margin.

I read an interview with the had of Patek. He said they didn't make money from selling SS models. They only keep a few around for fans, but otherwise everything is going to precious metal. Obviously they are tiny compared to Rolex, but the sentiment is the same. The main difference is that Rolex sells enough watches to keep a margin for SS, and also knowing they are buoyed by enthusiasts who mostly like SS watches.

Watch the interview, don't listen!
I'm sure they make a pretty healthy margin on their $30K precious SS pieces too. They'll have to keep the supply tight so people spend money on their high margin PM pieces.

[APPRF]

https://www.youtube.com/watch?v=MELRidF0usQ

Agree with this guy. Still a long way down to go.

[gerry100]

What if everybody who wants a Rolex has one?

I came off the sidelines after about 40 years, low interest rates, FOMO etc. My opinion is that some of Rolex demand has been pulled forward due to external influences.

There are many, many people who could afford a Rolex ( or a collection) but who have zero interest and never will.