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Pebble Beach 2019 Auction Preview

 

CBA Previews Pebble Beach 2019 Auctions

More Realistic Auction Estimates?

 

We have been critical over the past 18 months or so that auction price estimates have been too high. That auction houses, competing to get the best cars, had been pitching sellers on unrealistic estimate ranges combined with high reserves that protected sellers from the houses not realizing their expectations. This strategy however is not sustainable for auction house profits and the market data proves that out as in fact a large percentage of the highest value and most profitable cars were no sales over this time period. Auction houses were left looking like they had lost their juice and the rationale for their payday.

The response from auction houses was then to demand no reserve on all but the best cars whereby they could be agnostic as to unrealistic estimate ranges as the cars would sell. Auction houses could be made to look like they were delivering on the promise of achieving liquidity at artificially high prices. The predictable result though was disinterest from prospective private sellers who withheld, holding out to sell on reserve only and therefrom an overall reduction in car quality and rarity being offered. Those that rolled the dice under these conditions were often left disappointed in the result or didn’t care. Auction houses back filled their catalogues with more cars from dealers who simply want to move the cars (a little known fact is that ~40% of cars at the auctions we cover are actually dealer owned)!

Of course the balance point where sellers and auction houses need to be is where reserve prices plus commission align with the real world. This allows for achievable results based upon realistic estimate ranges. Auction houses can profit and sellers can leave satisfied. Finding this point can be tricky particularly given that high auction house commission rates alone skew behavior. We are not there yet, as auction house competitive forces are still in play and buyer and seller market price expectations are still quite different. But it does appear with Pebble Beach 2019 things are moving toward a more sustainable equilibrium. We will know more when the hammer falls … or doesn’t.

 

RM Sotheby’s

Lot 234 – 1996 993 GT2 Strassenversion – 10,404 KM – Speed Yellow/Black – estimate $1.25m to $1.4m – Reserve.

There are a few 993 GT2’s that can be bought out there but not many and owners want all the money. The last similar kilometer example we saw at auction (also in Speed Yellow at Amelia Island 2018) performed below expectations. We wrote then, ‘An iconic car for sure … but not at what seller’s think they are worth. This result will probably dry up the supply for a while as owners hold out for a better future.’ And so here we go … a new test of the strength of buyer interest.

This example is not exactly a lightweight with AC and electric windows, which some however may prefer. It is a complete German delivery car with reasonable kilometers, a special interior – and it’s here without conversion.

A $1.3m hammer is not out of the question.

 

Lot 247 – 2005 Carrera GT – 265 M – PTS Arancio Borealis/Dark Grey – estimate $1.2m to $1.5m – No Reserve.

We know this car quite well having represented it for sale in the past. The last long term owner had it on the market for quite a while for as low as $1.4m asking and eventually sold it for something less. The next owner flipped it almost immediately to its current owner CNC Motors who put it on the market for $1.6m. Laughable given that it sat for a very long time unsold asking $1.4m until they got it. Obviously there were no takers at CNC’s price and so now it’s here a few months later without reserve.

This is a very nice, serviced and unique Lamborghini colored car – that is truly spectacular in person … but no PTS Carrera GT has sold for more than this one recently did and that was for less than the low estimate here all-in.

A $1.1m bid would get the new owner all-in around the recent threshold.

View this car’s build spec here.

 

Lot 325 – 2011 997 GT3 RS 4.0 – 5,118 M – Black/Black – estimate $500k to $600k – Reserve.

Seems like a common auction theme is that cars that go to auction return to auction and this is one of those. This specific car proved at RM’s 2018 Porsche 70th Anniversary Auction that there is no longer a Seinfeld premium. It disappointed there with a $510k high bid on an optimistic $800k low estimate – not sure how much better it will do here. This example has a unique carbon body parts build and the claim to the highest North American RS 4.0 MSRP.

Maybe Seinfeld’s prior ownership can get this to a $525k hammer despite it having higher mileage than is desirable for a true collectible.

View this car’s build spec here.

 

Lot 336 – 1991 C4 Leichtbau – 4,500 KM – Black/Black – estimate $450k to $550k – Reserve.

We really like this car for its interesting engineering as documented on our C4 Leichtbau website. But no matter how much we like it these don’t seem to ever sell for what we think they should. It is rare, it is truly unique … and it is totally underappreciated. We saw this car on display at Rennsport V when it was owned by Kerry Morse and it was pretty rough. Then it was taken in and dressed up by Canepa who have had it on offer. In a world which appreciates form (engineering) over function (it is not a great car to drive) this example should hammer at high estimate … but unfortunately that is optimistic.

No hammer unless reserve it lifted.

 

Lot 339 – 2005 Carrera GT – 5,031 M – GT Silver Metallic/Ascot – estimate $625k to $725k – No Reserve.

Another example of a car rotating through auction houses this one was offered at Barrett Jackson Scottsdale 2019 where it failed to hammer with a $650k high bid. It is fully serviced which is good but it is the least desirable color combination (GT Silver is by far the most common color Carrera GT). Miles are just average. Does have its’ full luggage set.

There are plenty of Carrera GT’s on the market in GT Silver so this time a $650k hammer should be welcomed.

View this car’s build spec here.

 

Lot 369 – 2016 911 R – 353 M – White/Black GT Silver Stitching – estimate $325k to $375k – No Reserve.

Offering this example at no reserve makes sense and will probably allow for the best result. This car’s lack of single mass flywheel puts it at a big disadvantage in the market. It is the most common color for the 911R, White, and only has a standard interior. And, as our most recent [Porsche market report for July] shows, while there aren’t too many 911R’s on the market they are almost all White and low mileage.

Estimate range is far too high for a car that should hammer at $265k.

View this car’s build spec here.

 

Gooding and Company

Lot 028 – 1989 959 Sport – 4,955 M – Guards Red/Grey – estimate $2.0m to $2.4m – Reserve.

The 959 Sport is certainly the top of the 1980’s production Porsche food chain and they are less and less frequently coming to market. This particular example has been closely guarded and represents 1 of the 18 (of 29 total built) in Guards Red. It claims to be the last built (#30) but these were not completed in calendar sequence so that claim is off, but also largely immaterial . Mileage is good for these but not super low.

As we reported from Paris in 2017, when the market was still hot, a more interesting White example with ~11,500 miles sold for €1.96m (~$2.35m at that time) all-in, a high point for this model. The only downside of the one is the EPA conversion and a recent engine rebuild which makes one wonder.

Hard to find another one … a hammer at $2.1m makes sense if there is a collector who must fill this slot in their garage.

 

Lot 036 – 1992 964 RS – 5,661 KM – PTS Saturn Yellow/Black – estimate $500k to $600k – Reserve.

We first saw this car back in the summer of 2015 when it was being offered by Thomas Schmitz in Germany. It truly is an exceptional example of a 964 3.6 RS in what is a really great color. The issue here is that the market has not in the recent past awarded this model anywhere near the valuations of 2015. And even though it is low kilometers, we saw the museum quality 96 KM Guards Red example fail to crack a $530k bid.

Someone will certainly love this color but unless the reserved is dropped it seems like this one will be a no hammer.

 

Lot 046 – 1993 964 RS 3.8 – 4,253 KM – Guards Red/Black – estimate $1.6m to $2.0m – Reserve.

For many years it seemed that there were never any 964 3.8 RS to be bought – even during some of the hottest market years. At Amelia Island 2018 a Speed Yellow ~6.8k KM example hammered for $1.5m. In our recap of the Amelia Island 2018 auction we stated, ‘Will be interesting to see if this pricing brings more of these out of hiding.’ And it seems more have leaked out to seek new owners at a higher prices.

This one took a circuitous route from original delivery in Germany, to Japan and now it is here with that interesting back story. A very complete example – this one will be hard to top any time soon.

While the high estimate is most likely not in the cards, a $1.625m hammer is conceivable.

 

Lot 061 – 2011 997 GT2 RS – 752 M – Black/Black Red – estimate $400k to $500k – Reserve.

We often lament about how underappreciated this model is and the advent of the 991 GT2 RS did not give it a boost as some had anticipated. Recent offerings have fallen flat and our latest Porsche Market Report for July 2019 shows little movement on examples albeit with somewhat higher miles but asking considerably under this low estimate. It seems 997 GT2 RS pricing is destined to slowly drift lower.

This particular example is a repeat auction car. It was reported by us as ‘sold’ at Amelia Island 2018 for $490k at the hammer. Now it’s here at a considerable discount to that. Its’ Experian Autocheck report shows 5 owners, but there have been several dealers in between – not a great story for a low mileage car. Claims to be highly optioned but not really, a below average MSRP and no carbon fiber fenders.

A hammer at $385k is about right for this low mileage example if reserve is abandoned.

View this car’s build spec here.

 

Bonhams

Lot 136 – 2015 918 Spyder Weissach – 980 M – Sapphire Blue Metallic/Black Silver Alcantara – estimate $1.6m to $1.9m – Reserve.

CXX options cover off the Salzburg package in Grey scale (normally Red scale) on this 1 of 4 Weissachs for North America in Sapphire Blue. Otherwise not a remarkable build that resulted in a slightly lower than average MSRP. This car could be bought in May 2019 at St. Louis Motorcars for ~$1.7m which is not the market these days.

Low estimate is too high for a car that already couldn’t sell for that number all-in … so unless the reserve is dropped this is a no sale.

View this car’s build spec here.

 

 

Lot 137 – 2008 997 GT2 – 4,976 M – Basalt Black/Black – estimate $175k to $225k – Reserve.

Most people don’t realize that around 30%-40% of the high value cars offered at a given auction are actually being sold by dealers. This car is another offering by St. Louis Motorcars … most recently unsold asking $210k. Our most recent Porsche Market Report for July 2019 shows more 997 GT2’s on offer now than there has been for some time. Most are priced not to sell. Basalt Black is an advantage color wise and the build sheet of this one places it in the top ten percent for number of options.

If the car had recently not sold at a higher price (it couldn’t) we would say differently – but only low estimate is attainable here – $175k hammer.

View this car’s build spec here.

 

Lot 70 – 2019 991 GT3 RS – 350 M – GT Silver Metallic/Black – estimate $225k to $275k – Reserve.

While production of the 991.2 GT3 RS ended several months ago the final production tally is not yet in – but we are looking at around 1,750 units for North America, more than the 991.1 GT3 RS model which now saturates the market with unsold cars. A quick look at Porsche franchise dealer inventory alone shows 50+ units on offer – new and used – most overpriced and sitting. By fall dealers will not want to hold these over the winter and settle for the MSRP that a new example is actually worth – used will go for something less. This example is unremarkable with a $203k MSRP and the few miles one might expect on a new car obviously purchased for resale.

No sale unless reserve is dropped for a $180k hammer.

 



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