Is a watch price crash coming?
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A correction, not necessarily a full on crash, is bound to happen.
The first thing that will happen is many of the private label based micros will disappear. Most of these are pseudo headgefund bros taking advantage of a hot space and they‘ll quickly move on. Many brands folks love here will be gone.
The dirt bag grey dealers will close up shop to find their next scam/real job. Joma, Watchmaxx, others will be fine, I’m talking about the dirt bag lifestyle YouTube types. We all win on that.
Second, some of the other brands will survive by scaling back lines/ product offerings. We may see further consolidation, less movement Variety.
The big players will be fine. People will always want Rolex, but the secondary won’t be as hot, which is fine.
The booming brands were all luxury products. They became investment items for the Bitcoin and tech stock crowd, and also benefited from the stimulus checks and low interest rates of the last couple years.
As bought/owned by middle and upper class people, I expect values to follow a real estate downturn pattern. This often involves stagnation and slow inching down, but not a rapid or extreme crash. The well-to-do own them and aren't under pressure to sell, so they'll sit on them and lose their investment value through inflation. The sticker prices could stagnate for 10 or 20 years, and some brands may go down and never come back.
All fashion items go in cycles and become faddish from time to time. First popular, then unpopular, then popular, etc.
EDIT: Track the price trends here
https://beta.subdial.co/market
I think certain brands that have become so overpriced and unavailable from ADs are going to experience a return to reality. I welcome this, even if I’m not interested in the specific watches or brands. A lot of money got sloshed into the watch market with the idea that watches are ‘investments’. With very rare exceptions, watches are not long term investments. The numbers just aren’t there to invest in watches as one might invest in classic financial investments (stocks, bonds, real estate, etc). The only thing that made watches a profitable possibility in the last couple of years is the watch speculation market, which requires other speculators to function. It is a classic bubble, just like all others, and mimicking the ever instructive tulip bubble.
Getting past the speculation bubble will benefit watch collecting by people that want the watches for more than flipping, and I am looking forward to the market correction.
Only for hype brands and hype watches. There is the type of watch buyer that who buys a watch for the sole purpose of impressing those around him. I will refer to this type of buyer as the douche bag. The douche bag buys Richard Mille not because of the superior strength and construction of the watch but so his friends know that he has over $1 million dollars on his wrist. Other hype watches for douche bags are Hublots, Royal Oak Offshores, Daytonas especially blinged out with diamonds, Nautilus Tiffany blue in particular and anything over 48 mm. The douche bags will be selling these at a fraction of the cost in order to get into the next hype item. I don't foresee much price changing on high quality watches from high horology brands.
The watches that were booming in 2ndry market were watches that are out of the price range of most collectors I know even if you bought these at the AD, and these are not watches that you could walk into an AD and get right away anyways unless you have built that reputation. I think that trend started well before watches blew up on social media. You have those "collectors" who made money on stocks and crypto that paid 5x so that they get their instagram flex, and then there are some that thought that watches were an "investment" (Kevin O'Leary, Producer Michael etc) . I never bought a watch with an eye on the 2ndry market, also there are hardly any dress watches that are booming on the 2ndry market, but are mostly steel sports watches, and that too handful of brands. I can safely say for you and me a 2ndry market correction or crash is not going to make any difference.