Are Rolex Prices About To Bottom?

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by Tyler Durden
Friday, Sep 09, 2022 - 10:40 PM

Since the secondhand luxury watch market peaked in April, we pointed out the slump in prices this summer via two notes titled Investors' Clock Out' Of Rolex Bull Market As Demand Cools and "Boom Time Over": Rolex Prices Crash In China

After a turbulent spring and summer, there's emerging evidence of a "bottoming out of prices in the world's most popular luxury watch references," according to to watch tracking website Sundial. 

This week the Subdial50 Index, which tracks references for watches such as the Rolex Submariner, Daytona, and Datejust, as well as Patek Philippe Nautilus and an Audemars Piguet Royal Oak, increased 1.2% over the last 30 days. The index is still up 21% over the 12 months but down 22% in the previous six: a wild rollercoaster ride for passionate watch enthusiasts and/or those trying to flip timepieces. 

"The first quarter of 2022 saw preowned luxury watch prices boom, bringing with it scores of new buyers that were introduced to the market for the first time. Many of these left as quickly as they entered: flippers and day traders who'd been told you couldn't lose money in watches came with little underlying passion and found themselves burnt when prices began to fall," Subdial wrote in a market update post this week. 

For the secondhand Rolex market specifically, WatchCharts' index of 30 popular models with high trade activity also shows the pandemic boom and peak euphoria in April -- only to give way to a tumultuous summer -- comes at a time when stocks, cryptos, and bonds have had a rough year. 

WatchCharts Rolex index dropped 5.9% in June, followed by a 3.5% fall in July and -5.1% in August. 

A bottom in the secondhand luxury watch market could come when financial conditions ease for real. The latest round of hawkish comments from Federal Reserve members (voting/non-voting) and especially after Chair Powell's Jackson Hole speech, has ignited a hawkish shift that suggests tightening financial conditions isn't over.