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Is This The Beginning Of Buyer and Seller Expectations Converging?

Image Credit: RM Sotheby's
Image Credit: RM Sotheby's

It’s been a wild fortnight in the auction world.

From the RM Sotheby’s sale in New York setting a new record price for a Ferrari at auction to them hot footing it over to Las Vegas for one of the highest quality catalogues in recent memory to Iconic Auctioneers back at the NEC Classic Motor Show in the UK - there’s no shortage of things to talk about.

Enough has been written about the 330 LM / 250 GTO so I won’t add to the commentary, instead we’ll focus on the RM Las Vegas and Iconic NEC sales.

We’ll do RM first then Iconic.

RM Sotheby’s Las Vegas

Before we get into the numbers, the team at RM have to be commended on the show that was put on.

The catalogue itself was such a densely packed collection of top quality lots, I personally, am struggling to remember a recent auction that can top it.

The show around the auction is worthy of a write up in itself from James Corden kicking off proceedings, the visuals around how the lots were displaye, not to mention auctioneer Oliver Barker dropping from the sky in a gold box. Check it out if you haven’t seen it already.

So, what were the headlines from the Las Vegas sale?

32 vehicles were offered. 27 sold. 5 didn’t. Delivering a remarkable sell-through rate (STR) of 84%.

That’s one of the strongest STR we’ve seen all year from a major auction house.

However, of the 32 lots offered, 25 were offered at no reserve.

Of the 7 lots that were offered with a reserve, 2 sold.

Total sales value, as at the time of the data being collected, stood at $52,741,500.

That gives an average sales value across the 27 cars that sold of a jaw-dropping $1,953,389 - I said the auction quality was dense. There’s evidence if you were ever in doubt.

Can we draw any conclusions about the market?

There are some data points we can pull on.

Firstly, the STR above at 84% is remarkable although it’s highly flattered by the level of no reserve. So, let’s dig deeper.

Secondarily, let’s look at how the lots performed vs their estimate.

48% of lots that sold, when including premium, sold for below the low estimate.

44% of lots that sold, when including premium, sold within their estimate.

7% of lots that sold, you guessed it, when including premium, sold above their estimate.

Another way of looking at the data is that if you took the midpoint of the estimates across all 32 cars in the auction, you'd see the sales price inclusive of premium was 9% below the midpoint on average and 11% below in the median case.

Recently auctions have been performing about 5 percentage points worse than those figures on average so actually a respectable result.

For the data nerds, the prior stat includes vehicles that didn't sell. For each of these we've taken the high bid the car reached and added buyers premium on top to ensure consistency.

Thirdly, let’s look at how many record prices were achieved.

11 world record prices were set.

Unsurprisingly records were set by the following 4 cars given it was the first time one of them had sold at auction:

Records were also set by the following 7 cars, breaking through previous record prices for that model:

Note: RM offered both a CLK GTR Coupe and Roadster, the world record for a CLK GTR stodd at $4,515,000 when a coupe sold in 2018. The coupe RM offered didn’t sell but reached a high bid of $7,000,000 (that’s a world record price even without premium added in).

It was the first time a Roadster had sold publicly and it broke the record for all CLK GTRs when it sold for $10,235,000.

Some of you may have noticed the dominance of Mercedes in that world record list, they make up 5 of the 11.

To put some of the prices in perspective 41% of the lots that sold hit world record prices…

The EB110 Super Sport was a potential steal, it reached a high bid of $2,000,000. With premium added in, that's $2,205,000. That would’ve made it the cheapest EB110 to sell since 2016.

Right, let’s keep moving, onto Iconic.

Iconic NEC Classic Motor Show Sale

Iconic returned to the NEC alongside one of the biggest classic car shows in the country to sell 165 vehicles.

What were the headlines from the NEC sale?

103 of those vehicles found new homes. 62 didn’t. Coincidentally, the STR was 62% also.

Lower than RM but equally with a far lower level of no reserve cars being offered.

Total sales value, at the time of analysis, was £5,506,976, giving an average sale value of £53,466.

How did the lots perform against expectations?

As ever, the most effective way to assess this is comparing the sales price against what the estimates were.

Of the 103 cars that sold, 30% sold, inclusive of premium, below their lower estimate.

42% sold, inclusive of premium, within their estimate.

And 28% sold, inclusive of premium, beyond their top estimate.

When you compare that against other recent auctions it reflects a delta that is shrinking between buyers and sellers.

That is reinforced by the sales price of all the lots that went under the hammer being 10% below the midpoint of Iconic’s estimates in the median case and a highly accurate 5% below in the average case.

Any records?

Yes, 12 world records were set.

Without doubt the big hitter was the late Queen’s L322 Range Rover - selling for £132,750 - smashing the previous record for an L322 by over £70,000. Rather impressively, that makes it the 10th most expensive Range Rover to ever sell at public auction according to our records.

Another world record that the Iconic team will have been pleased with was the 1973 Jensen Interceptor III 'S' by Jensen Automotive International. This car was one of the first re-engineered Interceptors.

It went to auction with an estimate of £80,000 - £90,000. It sold, including premium for £135,000 - 50% above its top estimate and c. £40,000 above the previous record price for an Interceptor.

The Takeaway

There's a lot in here but if we had to nail it down to one takeaway it’s this:

Are we seeing the beginning of a convergence between buyer and seller expectations?

For the past few months we’ve seen the delta between estimate mid-point and sales price sitting in the 15% - 20% range in both the median and average cases.

In other words, sellers looking for far more than buyers are willing to spend.

Both RM and Iconic have delivered figures far better than what has been being seen recently - this could be the first sign in a long time that expectations on both sides of the table are beginning to align.

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