Are the “Rich” Selling Their Luxury Gear (and Tanking the Markets)?
In 2022, the Rolex resale market peaked at an average price of over $60,000 as more people were getting more money and wanted something to show for it. These days, prices in the secondhand market are at a two-year low. Insiders are calling the price drop a “happy, healthy correction” following a rapid and unsustainable price escalation.
Read: The Rolex Index Is Still Falling: Economic Uncertainties Impact Demand
But X user Jason G. points out something a little less happy: the “wanna-be-rich,” or those who were earning high incomes in 2022, are going broke and dumping their assets, many for less than what they paid for in this inflationary environment.
In other words, the meme stock era of luxury gear has come to a screeching halt, and there’s no bottom yet in sight.
Jason G. also pulls up charts on luxury cars showing the same trends in the resale and leasing markets — with a Mercedez-Benz G63 listing for as much as over $86,000 less than the original price. Auto loan delinquency numbers support this insight, as current figures are about to hit 2008 recession levels.
A recent study from the New York Federal Reserve Bank found that many of those struggling to make their car payments are young adults, with nearly 4.6% of under 30 auto loan borrowers in “serious delinquency” — which means they’ve missed at least 90 days or three months of payments.
Read: Americans Can’t Afford Their Cars Anymore
Jason G. talks about people in commission-based businesses like realtors, lawyers, and mortgage officers, but could some of these under-30s also be the kids who made big bucks trading crypto and NFTs, only to watch the landscape (and all their money) fall into the void with the likes of Do Kwon Do and Sam Bankman-Fried?
What does this market correction mean for the broader markets especially as there seems so be no end yet on the horizon?
Information for this story was found via Bloomberg, X, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
