Studying the secondary market tells you everything you need to know about both current and future demand for any watch produced in reasonable quantities.
It will not take you long browsing and cross-referencing authorized dealers, global marketplaces like Chrono24 and eBay, and in-country specialists such as European Watch Company Luxury Bazaar or SwissWatchExpo, to see that watchmakers are storing up significant problems for themselves with references that were trading for over retail due to shortages two years’ ago turning into widely available and heavily discounted pieces today.
Online trackers from the likes of Subdial and Watchcharts show that the average price of the most-traded luxury watches is continuing to fall, which is hardly encouraging customers to start spending today since prices could be even lower in a week’s time.
However, the time for sitting on the side lines waiting for prices to fall even further may be coming to an end if people act rationally and buy what they love.
Take the Vacheron Constantin steel-on-steel Overseas automatic.
According to Watchcharts, the price of the three-hander has dropped by 7% in the past year and can now be bought, unworn, for around $20,000 on the secondary market, a little more for the blue-dial.
Since the recommended retail price has risen to $25,000, a watch that was so hot Vacheron Constantin hoarded it for its own boutiques during the boom, is now trading below retail and back on sale with authorized dealers.
Will it fall further? Maybe. But Watchcharts notes that the reference has risen in price by 5.4% in the past month.
The spread — potential profit — on a relatively common watch like the steel Overseas, is not particularly attractive to trade buyers, so an uptick in prices is likely to have come from genuine customers believing the time and price is right to buy.
The Overseas Chronograph in steel looks even better value. Despite being discontinued, you can pick one up in mint condition for under $15,000.
These watches were lifted up by a rising tide of demand for elegant sports watches with historic stories and great brand recognition.
Demand for Overseas increased the most when waiting lists were longest and prices highest for the most desirable alternatives: Patek Philippe’s Nautilus and Aquanaut, and Audemars Piguet’s Royal Oak.
Really, it should be judged purely on its own merits as a watch of exceptional balance and beauty.
Zenith Chronomaster Sport
The same market forces have cut prices down to size for Zenith’s Chronomaster Sport, a watch that screamed to be bought by somebody sick of prices and waiting lists for Rolex Daytonas.
The more realistic your prospects for scoring a Daytona, the less likely it is that you will opt for its close cousin (they have a shared history through the El Primero chronograph movement).
A watch that was once being flipped for over retail is now widely available on the grey market for $7,000, that’s almost 40% off its $11,300 sticker.
Girard-Perregaux Laureato
Girard-Perregaux’s steel-on-steel Laureato, another absolute beauty, is a steal today at around $9,000 for the most popular piece in blue, and under $7,000 for other dial colors.
That’s a $14,300 watch at retail and a fantastic alternative to an Audemars Piguet Royal Oak 16202ST, which will still set you back over $70,000 today in mint condition.
I cite these examples because, when the market was red hot, they were being sold at above-retail prices and are massively discounted because supply has been maintained or grown while demand has slumped.
Even deeper discounts are available for watches that never traded over retail like almost the entire Omega, Cartier, Breitling or TAG Heuer catalogues.
I am merely an armchair economist, but even I can see that inflation has been tamed, interest rates are coming down, wages are rising and stock markets are at all-time highs.
Ordinarily, these conditions would trigger an upturn in demand, and that is what I expect to see in the fourth quarter of this year.
As confidence returns to the overall primary and secondary market, prices for second hand or grey market watches will stabilise and might even start to tick up.
That is not to say people should be piling back into watches because there are easy profits to be made. Far from it. But we are most certainly in a buyers’ market today where genuine watch lovers have power in their hands.
All I would urge is that they do not forget to use that power to acquire watches that we could only dream of buying a few years’ ago.