15 May 2020
 5 minutes

Market Performance: Is now the time to buy or sell?

By Tom Mulraney
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Market Performance: Is now the time to buy or sell?

It’s early May 2020, and most people reading this are likely entering their second month of some form of lockdown as the world battles the COVID-19 pandemic. These are truly extraordinary times, and understandably, most of us are still unsure how to react. Slowly but surely, however, a new normal is taking over. We’re adjusting to our modified way of life and embracing the unexpected opportunities it offers. At the same time, it’s good to remind ourselves that some things remain largely unchanged and others that were initially affected have recovered much more quickly than anticipated. The secondary market for luxury watches is a prime example of this.

As many watch lovers adjust to their new realities and take stock of their lives and personal financial situations, it seems like two opposing but related questions are frequently coming up:

  1. Is now a good time to buy?
  2. And/or is now a bad time to sell?

Given the massive downturn in luxury spending due to a host of factors – closure of retail stores, market uncertainty, increasing unemployment, etc. – it seems reasonable to assume that the secondary market for luxury goods would likewise be impacted. To be fair, this is likely true for brick-and-mortar operators, although we don’t have sufficient data to draw any conclusions there. What we do have, however, is a huge amount of data on the performance of the online secondary watch market on Chrono24.

Development of the median sales price for watch models on Chrono24 (2019 – mid April 2020)
Development of the median sales price for watch models on Chrono24 (2019 – mid April 2020)

We’ll get to the details in a minute, but for those of you who are impatiently waiting to hear the answers to the two questions above, the key takeaway is this: The overall financial performance and availability of watches on Chrono24, when viewed over the last 12 months, remains stable. That’s not to say there hasn’t been any price variability – there has, in both directions, and we’ll be looking at some key models that have been affected shortly – but the median sales price over the last year or so has stayed more or less constant.

The market isn’t showing any signs of a correction yet and in fact, interest in buying watches – measured by the number of purchase requests – is now at an all-time high. Of course, it could be that we’re still too early in this process to see what the full economic impact will be. However, for now at least, it seems consumer confidence has not been impacted to the extent previously anticipated.

Number of requests on Chrono24 (2019 – mid April 2020)
Number of requests on Chrono24 (2019 – mid April 2020)

It’s a slightly different story when we dive into the finer details of specific watches. As you might expect, there has been some price correction activity on models that were experiencing rapid price increases pre-COVID-19. Likewise, perennial favorites – particularly Rolex models that are viewed as safe-haven investments – have seen a rise or stabilization in their value trajectories. Let’s take a closer look at some of the specific winners and losers.

The Steady Performers

Most watch enthusiasts probably won’t be surprised to learn which models are performing well during this period of uncertainty. In fact, you may already be on the hunt to add one or two of these watches to your own collection. Please note: In the interest of space, this is by no means an exhaustive list but rather a few key highlights to provide some indication of the type(s) of watches people are looking to buy.

          Rolex Datejust 1601 (increased)

          Rolex Submariner Date 16610 (stable/increasing)

          Omega Speedmaster Reduced 3510.50.00 (stable)

          Rolex Explorer II 16570 (stable)

          Rolex Air-King 5500 (increased)

All of the watches listed above are considered classics that will never go out of fashion or favor. None of them are likely to see astronomical, short-term growth in value, but they are steady performers that can easily be liquidated at a fair price should the need arise.

Example 1: Performance of the Rolex Datejust 1601
Example 1: Performance of the Rolex Datejust 1601
Example 2: Performance of the Omega Speedmaster Reduced
Example 2: Performance of the Omega Speedmaster Reduced

Watches Decreasing in Value

On the flip side, a number of popular models have recorded drops in value over the past month or two. Again, there are very few surprises on this list.

          Rolex GMT-Master II Lunette Noire

          Rolex Daytona 116500LN

          Rolex GMT-Master II Pepsi 126710BLRO

          Rolex GMT-Master II Batman 116710BLNR

          Patek Nautilus 5711/1A-010

          Omega Seamaster Diver 300M

It’s important to keep a few things in mind here. To start, many already thought that prices for some of these models (the Nautilus 5711 and Daytona 116500LN, in particular) were overinflated pre-crisis and that a correction was inevitable. Secondly, as you can see in the respective charts, it’s not like prices are in free fall. In most cases, the drop in value is moderate and could be attributed in some part to sellers wanting to turn stock over more quickly during these uncertain times. If and when prices will recover on these key models remains to be seen.

Example 3: Performance of the Daytona 116500LN
Example 3: Performance of the Daytona 116500LN
Example 4: Performance of the Patek Philippe Nautilus 5711
Example 4: Performance of the Patek Philippe Nautilus 5711

Market Supply

The last thing we will touch on is the supply of watches on the market, as it can have a direct impact on pricing, particularly during periods of increased demand. In general, the number of new listings on Chrono24 has been pretty stable in the first quarter of this year, though it is slightly down compared to the previous year. Likewise, the mix of dealer and private seller listings has not changed, though this is an evolving situation with very few constants. At this point in time, however, we are not seeing a clear trend toward more dealers using Chrono24 as a substitute for their brick-and-mortar stores, nor are we seeing more private sellers looking to upgrade or liquidate their watch collections. In other words, it is largely business as usual from the supply side, even with increased buyer demand.

How this all will look next week, next month, and next year remains to be seen. Based on the data we have available now, however, it appears the secondary watch market is weathering this storm surprisingly well.

Read more

The State of the Global Watch Industry: 5 Questions and Answers

Tracking the Performance of the Tudor Submariner Snowflake Ref. 7016/0

Audemars Piguet Royal Oak: If you like this watch, you might also like…


About the Author

Tom Mulraney

Growing up in Australia in the 1980s and 90s, there wasn’t much of a watch scene. There was only one authorized retailer of high-end watches in the city I lived in …

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