The “Why?” Behind the Jump in Corvette Prices at
Auction
By Rick Tavel© January 16, 2014
 |
| One of the Corvette Models on Hagerty's Blue Chip Valuation Index (Photo: Barrett-Jackson) |
Traditionally Thursday at Barrett-Jackson’s eight day
collector car auction is a transitional day that bridges the gap between the
early “bargain days” where many entry level, “small cap” collector cars are
featured and the more expensive “blue chip” high dollar cars which cross the
block on Friday through Saturday. This
year has proved to be the strongest start to Barrett-Jackson’s auction
extravaganza where over 1300 cars will cross the block over the course of the
auction.
If the results of the first half of the event are any
indication, it appears that 2014 will continue the momentum of 2013 Corvette
collector sales. Through Thursday auction sales are up 8% over 2013 and attendance is up 30%. And leading the pack of
hot collectibles should continue to be number one and two condition C1, C2, and
early C3 Corvettes. Tracking just the Corvette sales so far indicate that all but a few entry level bargains have sold at or above the accepted Hagerty valuation guidance. Keep in mind that
during the last half of 2013 in addition to strong price jumps for excellent
condition first and second generation Corvettes, a new world’s record for a Corvette
at auction was set by a 1967 L88 Corvette selling at $3.2M, almost double the
December 2013 suggested valuation of a similar car. And even Condition 3 first, second and third
generation Corvettes are seeing double digit price jumps. Overall the Corvette showed some significant
price increases during 2013 and outpaced many other segments.
 |
| A 1965 Big Block Corvette Coupe |
If you are a buyer, you may be apprehensive about the strong Corvette
market since 2012. However, don’t expect the prices to fall in the short term
since there is some justification for these prices increases based on collector
car values over the past eight years. Simply
put in stock market terms, the market over the last year is simply going
through a “market correction”; an upward “market correction.” This is what I am referring to. Looking back at Corvette market values since
2006, the recommended authority on collector car values, the Hagerty® Value
Guide, shows a “good” to “concours”
condition first or second generation Corvette at the end of 2013 to be slightly
below the value of the same car eight years ago, in December of 2006. That’s right, in spite of the price jumps in
2013 the Corvette segment of the market is still not where it was in 2006,
while most of the “Blue Chip” market segment is well above 2006 prices. For example the Hagerty® Valuation Guide
shows a number 2 condition 1965
Chevrolet Corvette Coupe with a 327ci/300hp
4bbl L75 to be valued at $62K at the end of last year while in 2006 that same
car was valued at $66.8. This is also similar
to one of the Corvettes on Hagerty’s Blue Chip Index. It shows a concours condition 1967 Corvette
Convertible with a 427ci/435hp, 3 -2bbls valued at $277K in December of 2013
and the similar car valued $293K in December of 2006. While many segments of the collector car
market are currently at new highs, the Corvette market still has some room to
grow.
 |
| 1967 Corvette Convertible Similar to Hagerty's Blue Chip Example |
Most enthusiasts and collectors are aware that the collector car market overall was adversely impacted by the 2008 stock market collapse. And though most collector cars showed some decline the segment of the market most adversely affected was the “muscle car” and “hot rod” segments of the market. Though the Corvette is not technically classified in the “muscle” category it also was hit by the 2008 market decline, but unlike the muscle segment the Corvette had begun its decline since 2006 and by 2008 had already fallen almost 15% and then continued the fall until it bottomed in 2011. This trend is not the same for other “Blue Chip” European sports cars which have showed almost steady growth overall. By the end of 2013 most European Blue Chip sports car collectibles had appreciated well above their 2006 values. For example looking at a 1967 Porsche 911S in 2006 indicated a value of $39.8K and at the end of 2013 a value of $269K, over a 500% increase. Most other results do not show the extreme appreciation of the Porsche example, but unlike the Corvette most all European collector sports cars show 2013 prices above their 2006 value. Another example using a Jaguar XKE, 4.2L 6 cylinder Convertible with a 4235cc/265hp engine shows the 2013 value of a number 2 condition car to be $130K, almost 15% higher than its 2006 valuation.
 |
| Jaguar XKE, 4.2L 6 cylinder Convertible |
While the “muscle car” segment had a solid year in 2013, appreciating under 8%, overall this segment is still selling below the 2008 high values but ahead of the 2006 values. Unlike the “Muscle Car” index the Corvette’s peak was not 2008 but rather 2006 and with the very strong year in 2013 prices are just now approaching the 2006 high values. These jumps will only get the Corvette on a level playing field with other similar collectible cars.
Though it is too early to make an overall
projection, the first few days indicate that the strong prices realized for the
Corvettes sold so far have not only begun to reach the 2006 highs but in some
cases surpassed them. So if the current
trend continues, we should continue to see new highs in the Corvette market during
the first quarter and likely most of 2014.
So stop fretting and procrastinating; get out your checkbook now that
you understand the dynamics which have affected the Corvette market, there is
no better time to jump in. Based on the
enthusiasm of Corvette fanatics, coupled with the outstanding quality and
historic significance of the Corvettes being offered this week at
Barrett-Jackson® and next week at Mecum® in Kissimmee, we should be prepared to
see some new Corvette records set.
No comments:
Post a Comment
Please leave a comment