19 August 2013

The Classic Car World as we know it

Changing Values and Changing Venues Within the Collector Car World

 

Henry David Thoreau said, “Things do not change; we change,” and although it’s a relative certainty that Thoreau wasn’t talking about the classic car world, he might as well have been. In our world, the “things” that don’t change are old cars, but tastes and the market’s perceptions most certainly do change. And while the changes were subtle, if you look closely, the classic car world appeared a fair bit different in 2012.

In 2012, we saw the continuation of trends that have been building over the last several years — the sweet spot of collecting moved further away from the 1950s as the early Boomers, for whom Tri-Five Chevys and early T-Birds were the aspirational cars, age and leave the scene. Prices remained relatively flat for these iconic cars as supply and demand seemed to be in balance.

In 2012, the market got even healthier from top to bottom. Recall that the first signs of recovery in the market happened in 2010. When it became apparent that the economy wasn’t going to head for another depression that required serious liquidity to ride out, the top of the market became extremely active as high-net-worth individuals made a move to tangibles. By 2011, the prosperity in the collector car market spread to the vast middle of the market (those cars in the $100,000 to $750,000 price range).

Finally, in 2012, it was clear that the entry level was back with a vengeance, thanks to the traditional hands-on car guy — the longtime backbone of the hobby — who has firmly returned to the market. That entry level also included far more pickup trucks than in previous years. The one caveat here is that high-end or low-end, the best examples of both restored and unrestored cars showed the greatest strength in the market.

Originality was even more prized as the post-war preservation class became more ingrained and popular at Pebble Beach, and once again, there were high-profile sales of unrestored cars that eclipsed prices realized by restored examples of the same car. Big news came from Philadelphia in October 2012, where Bonhams held the first dedicated sale for unrestored cars, at the Simeone Foundation Museum. For the first time, there was also talk of the inevitability of an unrestored car eventually winning Best of Show at Pebble Beach.

Amid the auction frenzy for unrestored cars, in a few cases, badly deteriorated original cars or older restorations have sold for top market value. This has also been accompanied by a movement of people skilled at reintroducing patina to cars or portions of cars that have been recently restored. At the same time, barn finds are more popular than ever and, increasingly, they are left untouched — dust, cobwebs and all.

In an era of easy money, building contractors and tradesmen spent freely during the peak of the muscle car market in 2007, at a time when there was also home equity money available to a surprisingly large number of people. In 2012, new money began to appear in the collector car market for the first time since the collapse of the housing boom. Previously, if one industry dominated as a source of the capital that flowed into the collector car market, it was real estate. As the housing market stabilizes, some of that money is coming back, but more importantly new oil and gas money from places like North Dakota and Alberta is beginning to flow into the collector car market. The effects of this infusion of fresh money into the hobby should continue through 2013.

OUT IN THE FIELD
Based on the attention collector car auctions attract, it’s easy to think that every enthusiast spends hundreds of hours watching the action as cars cross the block. The truth is, most of the goings on in the collector car world take place in residential garages and on show fields. Again, the high-end events seem to draw the most press, so it’s a big deal when an established concours like Fairfield County has to suspend operations and the much-loved Glenmoor Gathering vanishes altogether. Fortunately, for every action there is an equal and opposite reaction, which came in the form of the newly announced Pinehurst Concours set to debut in North Carolina on July 11, 2013. Meanwhile in 2012, some young concours, including Barrington in Illinois, Boca Raton in Florida and Greystone in California, built on their strengths and prepared for future growth.

At the grassroots level, Carlisle Events has expanded from 11 to 17 shows in two years, including assuming responsibility for the Bloomsburg Nationals, the Fall and Winter Zephyrhills meets, and Allentown Auto Mania. While its only truly new event is the Sports and Outdoors Show, Carlisle’s Mike Garland explained that attendance is constant for most of the shows, while it has grown for the Carlisle Performance and Style Show as well as for the Import and Kit Car Nationals. Carlisle has also committed to adding “early bird days” at the Ford, Chrysler and Corvette Nationals to give diehards an extra chance to snag swap meet deals.

The year also saw a continuing emphasis on youth initiatives. Carlisle Events introduced several programs, including the “Young Guns,” which allows young car owners to compete against each other at select events. This augmented the continued efforts of the Collectors Foundation to support education within the hobby and Hagerty-backed Operation Ignite’s focus on engaging young enthusiasts by expanding youth judging at shows throughout the country.

With growth at all segments of the market, healthy attendance at swap meets and shows, and a concerted effort to cultivate the next generation of collectors and enthusiasts, 2012 ended on a high note. Only time will tell if sales, show attendance and youth initiatives continue to be strong in 2013, but based on recent trends, you can count on it.

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