Fratello On Air: 2023 Is Here, And The Modern Rolex Secondary Market Is Falling Apart

April 2022 has come and gone...

January 03, 2023

comments 20

Happy New Year! Yes, 2023 is here, and we’re bringing you the latest episode of Fratello On Air! Balazs and Mike are ready for another rip-roaring year, and they start with a bang. The modern Rolex secondary market and the CPO program are back in focus.

We’re back — sort of. Balazs has returned to Germany from Hungary while Mike is still hanging out with the iguanas in sunny South Florida. They reminisce about the holidays and strike up some banter about other topics. The Rolex CPO program and the modern Rolex secondary market overall are the subjects of today’s episode. There are dreamers out there, folks, and they still believe we are in the salad days of April 2022.

Handgelenks Kontrolle

Before discussing the Rolex secondary market, we dip into the Handgelenks Kontrolle. This time, we talk about the watches that we wore most during the holidays and share what is currently occupying wrist space. For Balazs, his trip to Hungary had an ulterior motive: he picked up some new old watches! He’s sporting a Zenith from the ’50s with a black dial and an Excelsior Park EP4 caliber. The watch was likely made for the Yugoslavian Air Force, and we discuss how it compares to his Angelus 215. Mike is wearing his trusty Citizen Promaster BN0220 in the heat and taking it to the pool every day.

The modern Rolex secondary market

Here’s a bold take: the modern Rolex secondary market is falling apart, and the decline shows no sign of slowing. During the holiday, we’ve been cruising the internet, looking up prices for current models. It’s clear that the market peaked back in April 2022 and that the downward trend has been constant since then. However, we pick on the current GMT-Master II “Batman” and chuckle at a current ad on Bucherer’s website for a CPO model listed for CHF 21,000! This is all while similar models are available in droves for 25–30% less. Similarly, we note that tone-deaf dealers are still listing watches such as the 36mm Datejust for 60% over retail while similar pieces exist for 10–15% over list. We dig our heels in and declare that a newer Rolex will not hit our wrists at a premium. Finally, we profess our love for vintage (even 10-year-old) Rolex watches because finding a minty model is so much more challenging.

We hope you enjoy this episode, and we look forward to spending 2023 with you! Feel free to reach out if you’d like to suggest a future show topic.

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Fratello On Air: 2023 Is Here, And The Modern Rolex Secondary Market Is Falling Apart

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DG
GoldenYears says:

Jan 03, 2023 at 11:45

I purchased a handful of new Rolex watches at retail during the past five years. Bought them to keep and wear. In fact, I gave all but one of these watches to my wife. In that sense, a major correction won’t affect us. But more than a few overly eager investors/flippers/and owners may feel some pain. One of the benefits of being interested in watches for some decades is – that one is not easily swayed by fashion trends and other short-term hypes. Not all will agree, but I try to buy the classic, timeless, and iconic watches. That way my watches are usually always in style and easily sellable if I should need the cash.

Reply
1. Enuona says:
  
  Jan 03, 2023 at 12:06
  
  Happy new year Goldenyears,
  
  I completely agree with your approach. Classics are classics for a reason, and timeless will remain relevant whereas fashion for the most part will become unfashionably irrelevant with a few exceptions.
  
  Those who buy out of their affection for specific watches will keep theirs and remain entertained by the whole shebang.
  
  Reply
2. VM
  vmehra says:
  
  Jan 04, 2023 at 02:07
  
  You bought them at retail, yes you’ll be fine
  
  Reply
Enuona says:

Jan 03, 2023 at 11:49

As far as I’m aware here aren’t that many spectacularly rare Rolex references in their lineup. Most Rolexes are just like any other Rolex of a certain level, be it great or not. In my view (which is not new), Rolex own pricing is at the right level for their assumed technical level + quality, allowing for a fair premium for status.

Paying beyond what Rolex charge is paying for the hype created by those using Rolex as a commodity. Like wheat, iron and porkbelly. The commodity market now consist of A LOT of traders that first were trying to secure their profit. Now, the market consist of traders trying to avoid or probably minimise losses.

This coincide with a plummeting economy where large numbers of the middle class looses the surplus, the money available for extravaganza and stuff one do not really need. Some of those will have to put some of their watches up for sale too.

There’s a natural resistance to loose money on purchases seen as investments, and this resistance has prevented the prices collapsing entirely. When that resistance breaks, the likelyhood of mainstream Rolexes plummeting well below Rolex own pricing is very realistic.

I belive the market is fast approaching the level where balance is achieved and that those who still can afford and prioritise it, will get their new Rolex directly from their AD.

The question is whether they will by a new, or buy a 2nd hand cheaper. There’s plenty of those for sale, and a good many are mint, directly from the drawers of the commodity traders.

Sit tight, what’s reasonable pricing today will appear very expensive tomorrow. Hodinkee’s USD 15,200 for the Polar Explorer II ref 226570 is already way beyond jokes.

Reply
Warky says:

Jan 03, 2023 at 12:35

If you want to know the “real” current price for a watch, just look on Loupethis.

You will see Rolex still selling at auction for above “list” if it’s a current model and still for the rarer pieces at decent premiums. Vintage doesn’t seem to be hugely affected.

Patek still strong as well.

Most other things……not so much. Some stuff from other brands going for incredibly low numbers 🤷‍♂️

Reply
1. brooklyn_boy says:
  
  Jan 03, 2023 at 13:59
  
  Neo-vintage is coming down too. A watch I’ve always admired, the original 16610 Anniversary “Kermit” is now selling for 15k in mint condition, when it used to be 20k before the crash. A mint 16710 can now be found for 11-12k instead of 15k.
  
  All in all, just great news for buyers!
  
  Reply
  1. Maxime S says:
    
    Jan 03, 2023 at 14:12
    
    are you talking dollars or euros? Can you point me in the direction of a “mint 16710 at 11-12k”? I don’t see them.
    
    Reply
    1. brooklyn_boy says:
      
      Jan 03, 2023 at 14:16
      
      USD.
      Rolex is almost always cheaper in the US than Europe because there’s more supply. I don’t want to name and promote any dealers on here, but look at the well known names and you’ll find them popping up.
      
      Reply
    2. DG
      GoldenYears says:
      
      Jan 03, 2023 at 16:28
      
      I found some 16710’s for around $12,000 on C24 but they are nowhere near “mint” condition. Even the “Very Good” condition 16710’s at $12,000 and above look quite beat-up. I guess you get what you pay for. The black bezel 16710’s are holding their own against their bi-colour bezel cousins.
      
      Reply
2. Mike Stockton says:
  
  Jan 03, 2023 at 17:05
  
  For sure, things are still above retail, but I’ll be very interested to see how things look in several months. I’m not an economist, so I’m not in the game of predicting the economy, but I do think people will think a lot more before simply buying. This behavior alone is already in stark contrast to those who would take anything when the call came (I actually know a few of those folks and they weren’t flippers). Let’s see what happens!
  
  Reply
  1. DG
    GoldenYears says:
    
    Jan 05, 2023 at 22:40
    
    In the past – if one takes a long-term look at Rolex prices/inventory, one will see that there are a good number of years where retail Rolex watches were plentiful, widely available, and even selling at a discount. During those times, the secondary market for pre-owned watches was much lower priced than a new, comparable reference at retail. Sometimes patience wins.
    
    Reply
EB
EDDI2142 says:

Jan 03, 2023 at 12:55

Happy New Year to the both of you.
Interesting topic. I agree that in the case of Bucherer and Rolex CPO, the buyers probably won’t care too much about the price. They probably don’t do much research either.
I recently saw a Bucherer CPO ad for an Omega and the labeling of the ad didn’t fit the pictures (and even the description of the watch was off/ didn’t match the pictures). So I believe that for Bucherer there is no necessity to be 100% accurate, since people buy the product anyways. Concerning the margins of Bucherer, someone I know recently sold a Rolex to Bucherer and they paid about 30% less than what they sell the watch for (with less popular brands the discount is even higher).
I agree with you and the other commenters that the secondary market will become reasonable again in 2023 and that buying “normal” watch for speculative reasons will become unprofitable/unpopular.
I will stick to special watches that I like, ones that I can keep and wear =)

Reply
brooklyn_boy says:

Jan 03, 2023 at 13:45

Prices haven’t gone down enough if you ask me. Hopefully the trend continues and we’ll get back to pre-2017 levels.
The CPO prices are not set it in stone. They will come down if the demand isn’t there. But pre-owned prices at ADs, whether CPO or not, will always be higher than prices offered by online dealers.

Those who bought current production watches grey will hopefully learn a lesson and avoid doing the same in the future.

But I’m much more interested in the primary market and not the secondary. I hope Fratello will shed some light on how ADs have once again started offering large discounts on non-Rolex products. Just like they used to a few years ago lol.

Reply
1. MartinM says:
  
  Jan 03, 2023 at 16:44
  
  True. Discounts are flung around now.
  
  But let’s see what happens to prices before getting hopes too high. Recent flux can (mostly?) relate to drain on other markets, inflation etc. during the last nine months. This will not continue. What happens when it turnes again?
  
  Reply
  1. Mike Stockton says:
    
    Jan 03, 2023 at 17:07
    
    True – it will turn again where natural demand rises. What I wonder is whether the speculators (a lot of folks who had zero interest in watches before the last several years) will stay away next time if they truly get burned this time around.
    
    Reply
    1. Enuona says:
      
      Jan 03, 2023 at 17:23
      
      Not convinced they will see the prices rise with the speed that makes it real business next time around. I at least, consider it probable that the enthusiast market could be somewhat saturated by the surplus from the flippers. I do believe that surplus is not insignificant…
      
      Reply
Maxime S says:

Jan 03, 2023 at 14:09

Nice episode of the podcast. Sounds like a nice discussion between experienced and logic watch collectors. Sadly the watchworld doesn’t have many of them. Rolex is well priced at retail and is stupidly priced on the grey market. But I don’t see the prices coming down any time soon. The watch enthusiast group of people is only growing and supply is still very low. The economic uncertainty of the last few months (which probably caused the watch market crash) is turning into a mild recession during 2023. So still any enthusiast with some cash to spare is going to want to buy a Rolex.

Reply
KANON MINASE says:

Jan 04, 2023 at 12:15

Rolex’ second hand certification keeps their bubble from bursting, however oneday Rolex hunger marketing strategy will get its retribution, this is called Karma or regurgitation.
AD resell their new arrivals to second level dealer ASAP, and second level maeketing keeps higher rediculous price….a vicious circle, and tell buyer ‘Insufficient capacity’, yeah, always same reason but everybody know AD is telling lie 🙁
Rolex fools everyone who want to own rolex, keep do this, someday Rolex will get its Karma

Reply
DA
DJ_Ambrose says:

Jan 06, 2023 at 09:51

I religiously follow with watches the same advice an old mentor taught me regarding real estate: “buy when everyone else is selling, sell when everyone else is buying” On that note: between late March and June of last year I sold an Exp, Exp II, AK, and an older OP and did very well. During the past 2 1/2 days I picked up a 16013 DJ with Oyster bracelet for 2.9k, and a 116523 Daytona with slate grey dial for 15.9k. Both were in excellent condition, and the Daytona came with boxes/booklets and tags.

I do have an advantage however because I’m retired and all things watches is my favorite hobby. All told I easily spent twenty hours over the past 2 1/2 days just shopping for watches. I picked up the DJ less than ten hours after it was listed on a forum, and the Daytona I bought was originally listed for 22k in June, and after four price drops it was at 17k. I offered 15.5k, and we settled at 15.9k. I guess what I’m saying is, with a little common sense, and self restraint it’s not difficult to do decent in any market. I subscribe to WatchCharts, and while some guys read the sports section first thing in the morning, I spend probably the same amount of time on WC checking all the watches listed during the previous 24 hours on all the different forums.

Watch collecting is probably the greatest hobby in the world, and I’ve always made buying decisions solely based on how much I like a particular watch, not how much other people tell me what I should buy. The fact that I really like the slate grey dial Daytona, and it being at the bottom of the Daytona totem price pole was just an added bonus for me.

Reply
George Plungis says:

Jan 11, 2023 at 16:02

Like your info on Rolex prices, I bought one of those infamous Winner of Dayton 24 Hr Race Daytona watches for $20 at a yard sale & it looks great even under a loop, has beautiful Roman numerals that I love. The crown would not turn the hands so I bought the tool to remove the case back & fixed problem with a bit of Loc Tite. Had the chance to look inside at the non Rolex movement. What is surprising is how accurate the watch is! The pushers don’t work like they ought to but I don’t care.

Reply

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