What must come up, must also come down. We all know this. We all know that this watch market has to soften at some point, right? Let’s take a minute and review where the market is and where it might go soon.
For starters, Rolex Authorized Dealers (AD) still don’t have much, if anything. The demand for Rolex (and Tudor and Patek) is still at an all time high. I keep in contact with about a dozen managers that work for either a Rolex AD and/or a Patek AD. What they said to me, is that it is still difficult to get pieces. The demand far outpaces the supply. However, the managers I am close to informed me that the requests for specific watches and people coming to pick up their watch when contacted is slowing a lot. For example, a man waits 12 months for his Datejust 41, the dealer calls him and decides now to turn it down. However, that same dealer calls 1-3 other clients and it is sold that day. For the last twelve months, that would have never happened. That watch would have been taken on the first call no matter what the situation was. The major change is the second hand market is a bit different these days.
image from rolex.com press room images
I also talk consistently to many gray market dealers and keep a keen eye on Chrono24/WatchRecon. Things are shifting. Let’s break this market into two sections. First, precious metal/high complications. Second, there is a long wait list for steel models. As you can see from Chrono24’s web tracking of a Rolex GMT Master II BLNR (image below), this watch is now moving down in price. The chart shows that the watch really hasn't seen a drop in years, but things are happening.
The precious metal watches are not getting much love. I recently spoke with a long-term friend and gray dealer about these models. He stated, “no one seems to be buying, but I am getting a lot of calls to purchase these types of pieces from collectors. I can’t move my really expensive stuff - so I am not taking on more.” This is just one person’s opinion but from my experience these types of watches require someone with a lot of money, and when the stock market moves down…these people tend to get real tight, real fast. This was always going to happen. Just think about the fact that the full gold Rolex Submariner used to sell on the second hand market for 15-25% off retail. These watches have always been known to be the slower movers due to their high cost. Now, let’s move onto the steel sports watches.
image from monochrome-watches.com
The full steel Submariner, GMT Master, the Sea-Dweller. These types of watches are tough to get at AD’s that’s for sure, but the second hand market definitely does have a lot of them. As stated from the dealers I talk to, these are coming down in price by anywhere from 10-20% from their peak prices. One dealer I was speaking with recently complained to me that he has lost most, if not all of his margin on his recent purchases. He now will only be buying these watches at just above retail to retail price. When looking on WatchRecon, it appears that individuals are moving their watches, but at a marginal amount above what they paid. I feel this may be good for all of us. These models should be right around MSRP, due to the fact they are most likely the watches that are the most common. However, one area that did not shock me but may to you is that a Patek dealer I know closed the list all together on all steel models. Simply put, that particular dealer had way too much demand to even add another person to the list!
With these watches coming into realistic pricing, they will help us all begin to enjoy watch wearing again. Many of us are starting to fear wearing something that costs 50K on our wrist, especially if one minor hairline scratch could reduce its value by 30% or more. This madness has affected all of us, including this writer. Watches are meant to be enjoyed - not closed off or kept in safety deposit boxes. I see Bitcoin and the stock market making huge moves down, this correction as they say, was coming. I feel that the watch market is ready for a correction too and the buyers/sellers are showing that with their pocket books.
Header image from rolex.com press room images
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