Arizona forecast: Will the effects of a cooling market be felt in sunny Scottsdale?

The January auctions, given their timing at the beginning of the year and the sheer volume of cars crossing the block, provide a yearly refresh on our view of the market. That said, they don’t happen in a vacuum. From the Hagerty Market Rating, we’ve seen successive months of near-record but slightly lower ratings, which indicates a cooling market. How do we expect that to impact the January auctions?

Let’s start by acknowledging that the January auctions are well underway. Although “January” has historically meant “Scottsdale” for the classic car world, Mecum’s Kissimmee auction, which started last week and will continue through this weekend, has ascended to become the biggest single sale of the month. With an expected 4,000 vehicles consigned to the event this year, it has a good chance of exceeding its 2022 total of $200 million, which was from 3,400 consigned vehicles. Through the first six days of the 2023 auction, the sell-through rate is below prior years at 74 percent, but the average price and total sales are up, suggesting enthusiasts are buying vehicles they want rather than merely what’s available.

In Arizona, some of the segments we will be watching are cars like the 1970–1971 Chevrolet Chevelle SS, Shelby GT500, and Datsun Z cars. These three are examples of cars that posted big gains in the past couple of years but have recently given back some of that appreciation, as observed in the January 2023 Hagerty Price Guide. We’ll also watch analog supercars such as the Porsche Carrera GT, Bugatti EB110, and Ferrari F40. The auctions in Arizona have at least one example of each, three in the case of the Carrera GT.

Barrett-Jackson also provides us an opportunity to check in on the market for modified vehicles. Nearly 800, or about 40 percent, of the vehicles at their auction this year have been customized. Previously, customized vehicles sold for less than the best examples of the same vehicles that were restored to factory specs. However, as tastes have changed and the customization and modification industry has matured, restomods have started to sell for more.

Overall, there are fewer auctions this year, as companies like Gooding & Company, Worldwide, and Russo and Steele have not made the trip to Arizona. Barrett-Jackson remains the anchor, and they’re joined by RM Sotheby’s, Bonhams, and MAG (Motorsport Auction Group).

There will also be fewer vehicles, with an expected 2,400 vehicles consigned. For those four auction companies, that is an increase from prior years but is well below the nearly 3,900 vehicles offered by all auction companies in 2020.

Based on the number of consignments, we expect total sales in Arizona to fall between $235M and $267M, with the top of that spread attainable if the average price remains comparable to last year. That range is in line with the total sales for 2017-2020 and 2022 but below the $307M record of 2016.