It’s hard to pinpoint the exact moment when any market becomes a bubble, but for pre-owned watches, it’s safe to say that it was around the time fractional Patek Philippe Nautilus ownership became a thing and an NFT of the white-hot watch was minted.
Sickening stuff, really, but in good news for those who want to wear the watches they own — rather than use them as a vehicle to diversify an alternative asset portfolio — the watch market continues to cool as pre-owned Rolex and Patek Philippe prices take a fall.
According to new research from Morgan Stanley and WatchCharts, the global inventory of pre-owned watches remains relatively illiquid, with prices falling as a result. The market peaked in March 2022 and prices dipped 26% by end-of-year, with a further 8% fall experienced from the start of this year till now.
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The bullish hype cycle was great for the auction houses and dealers (with records being set here, here, and here), as well as watchmakers themselves — many of whom posted their best-ever year as they joined in on the pre-owned lunacy. But just as a rising tide lifts all boats, the outrageous demand for luxury watches made it challenging for collectors and enthusiasts to buy at reasonable prices, a trend that has continued to slow into 2023.
For those worried the value of their collection will continue to plummet, don’t fret just yet; as there are still a robust number of timepieces from the “Big Three” watchmakers — Rolex, Patek Philippe and Audemars Piguet — that continue to trade pre-owned above their retail price.
For Rolex, 79% of its most popular models are selling over RRP (89 references, down from 112 in July), Patek Philippe has 49% of its tracked models selling above retail (43 models, down from 47 in July), and AP still has 71% in the black (34 references, down from 36 in July).
Are we at the bottom yet? This new report certainly doesn’t seem to believe so:
“Total supply on the second-hand market started to decline, though the overall inventory level remained elevated, and so does the number of median days watches stay on the market before being sold. Given the stock level, it is likely that secondary watch prices will continue to fall in 3Q23”
So if you’ve been patiently waiting to buy a special watch until the prices return to “normal,” it might be worth waiting a little while longer.
