Rolex watch prices fell in May after a year of wild growth
- An index that tracks Rolex watch prices fell 5% in May after a booming year of increases.
- Watch sellers were asking for overly “optimistic” prices in February, said WatchCharts founder Charles Tian.
- Even with the decline, luxury watches still performed better than stocks or crypto in 2022.
The luxury wristwatch resale market was on fire earlier this year, but it seems to have had a dose of cold water in recent months.
A price index that tracks 30 models with high trading activity fell 9.3% in May, after peaking in April. Even the Rolex brand tracking index, which tends to have very high value retention, fell 5% in May.
“In January and February of this year, even as prices continued to rise, we saw a reduced amount of [sales] volume,” WatchCharts founder Charles Tian told Insider.
“It definitely created this false perception that the market was higher than it actually is,” he added.
Compared to other asset classes, Rolexes have seen quite a competitive run in the year to March 2022, with some models like the coveted Daytona outperforming the S&P 500.
Rolex produces around 800,000 new watches a year – nowhere near enough to meet current demand – which has led to a robust secondary market. Then the pandemic sparked a frenzy for second-hand luxury watches that McKinsey estimates will reach $29 billion by 2025.
“There were definitely people who were listing prices very optimistically and continuously increasing prices week after week trying to instill confidence in the market,” Tian said.
The plunge in the value of watches over the past month follows a brutal season for just about every type of asset, with the S&P 500 losing about 20% of its value and bitcoin shrinking by more than a third.
Like many other assets, Tian said, the used watch market has seen a mix of new people interested in collecting, investors looking for alternative asset classes and good dose of speculation driving up prices.
“I think that rapid short-term increase that we saw from late last year to April of this year was just unsustainable, and I think it just needed to come back down to earth a bit,” Tian said.
Long term, Tian says he expects Rolex and other high-end brands like Audemars Piguet and Patek Philippe to resume their decades-long trend of appreciating, albeit at a slower pace than over the past two years.
“What we’ve seen over the past two months just brings it down to earth a bit,” Tian said.