The classic bike price bubble

[Steph]

Looking through classic ads and getting info from sellers, there seem to be a pattern developing.

Either
1)the owner knows what he is talking about and was involved with the bike knowing it well.
Or
2)The person bought the classic  bike, then finds out it’s not really what he expected (possibly because it is not running right) and parks it. He then tries to sell it hoping to make a profit with some flaws still present but not disclosed.

A lot of # 2 out there, that classic bike bubble will burst for them.

[TOMB]

True that.
TOMB

[oldbike54]

 That market is cyclical , some years ago Money magazine advised to buy Triumph TT Specials as a wise investment . At the time a nice one was selling for about $12,000.00 . Guess what , that's about what they sell for now , some 20 years later .

 Dusty

[bigbikerrick]

Classic bike ownership isnt for everybody. I think you have to be a gearhead that loves to tinker to truly enjoy classic bikes, especially European bikes. I know alot of my friends that ride would be completely disgusted with some of the Guzzi quirks/ maintenance stuff, such as points. Setting points is actually fun, for me on my 73 eldo, and the old bike always runs better afterwards, and I enjoy the whole scenario . Most others want to just ride, and enjoy the old bike experience/look, but not tinker.
Hasnt it become "fashionable" in the past 5 years or so to ride an old bike, wear vintage clothes, etc.,  all the hipster stuff that is considered cool at the coffee shop ?
Maybe  some of these folks bought  a classic bike, for its driveway jewelry purpose, and now moved on to some  other  new"passion", and just lost interest....I dunno...
Rick.

[Devildog]

Some people, like me, don't fit those categories. I just like riding older bikes, and new bikes aren't that appealing. I can admire bikes like the new Thruxton, but wouldnt give up one of my current bikes. I am not a gear head, but I can keep up, even enjoy the basic maintenance. My son's V7 Classic isn't near as much fun to ride as my V65, which I've owned for about 6 years.

[nortryder]

I've made way more money investing in real estate than I ever did in motorcycles. And I've owned a lot of bikes. I've had some nice ones too. But I always bought them to ride. I never owned a Goldstar-in-a-crate. I'd rather have gold bullion-in-a-crate.

[Lannis]

It happens with different vehicles all the time.

Look at the E-type Jaguar.   In the mid 80's you could buy a nice one for $20,000.   Within two or three years, speculation had driven the prices up and up, until in the early 90s they were $120,000 or more.  THEN the bubble burst and the price dropped to half of that, and has been climbing slowly since ....

No matter what sort of "speculative investment" you're buying, better make sure it's solid and not a "Bubble".   Bubbles break.

Lannis

[Sheepdog]

Ever read about the "Tulip Mania" in 17th century Holland? In the end, many got so hungry they were eating those precious bulbs. If you're expecting to get rich with an old bike, you are likely to be disappointed. Vintage motorcycles are their own reward...

[Ncdan]

After last weeks stock market wild ride it seems like a good idea to put ones money in old motorcycles, cars, or maybe even mules :(

[blu guzz]

about 10 years ago, my best riding friend decided he wanted a vintage air head bmw.  we found perhaps the nicest 1982 on the planet and it was underpriced at the time.  but, knowing how anal retentive he is, i advised against him getting it.  well he got it.  tiny problems came up with it that many people would have ignored (never any running problems) such as a rear brake light that would blow every once in a while.  this was strictly a local ride bike, so instead of carrying a spare bulb in the bag, he let it drive him nuts.  bike sold after 6 months.  some people just cannot relax enough to enjoy an old bike (or a guzzi?).    to me, little issues that do not strand you are quirks, not deal breakers.  to my friend, he may still buy a used bike, but never more than a few years old.  we have all kinds in our motorcycle world and are the better off for it.

[giusto]

Looking through classic ads and getting info from sellers, there seem to be a pattern developing.

Either
1)the owner knows what he is talking about and was involved with the bike knowing it well.
Or
2)The person bought the classic  bike, then finds out it’s not really what he expected (possibly because it is not running right) and parks it. He then tries to sell it hoping to make a profit with some flaws still present but not disclosed.

A lot of # 2 out there, that classic bike bubble will burst for them.

Well put     

[Lannis]

After last weeks stock market wild ride it seems like a good idea to put ones money in old motorcycles, cars, or maybe even mules :(

or ... simply don't sell on the bottom.   Over the last 120 years, stocks have ALWAYS gained over the long run.   Panic-sellers will always get hurt, no matter what the investment ....

Lannis

[Darren Williams]

Classic bike ownership isnt for everybody. I think you have to be a gearhead that loves to tinker to truly enjoy classic bikes, especially European bikes. I know alot of my friends that ride would be completely disgusted with some of the Guzzi quirks/ maintenance stuff, such as points. Most others want to just ride, and enjoy the old bike experience/look, but not tinker.
Rick.

Then some, like myself, wants both.  A bike I can just ride anytime anywhere without much maintenance and to have older bikes and dirt bikes that you have to tinker with quite a bit. 

[LowRyter]

It happens with different vehicles all the time.

Look at the E-type Jaguar.   In the mid 80's you could buy a nice one for $20,000.   Within two or three years, speculation had driven the prices up and up, until in the early 90s they were $120,000 or more.  THEN the bubble burst and the price dropped to half of that, and has been climbing slowly since ....

No matter what sort of "speculative investment" you're buying, better make sure it's solid and not a "Bubble".   Bubbles break.

Lannis

I've always felt that you can make money on tangibles when you buy it at a bargain,

not for trying to sell at a premium. 

[rocker59]

After last weeks stock market wild ride it seems like a good idea to put ones money in old motorcycles, cars, or maybe even mules :(

Not really.  There was some volatility last week, but the market has almost tripled since its low a decade ago.  Up ten fold in the past thirty years.

If you're in stocks long-term, they're a good investment.  If you're "day trading" or otherwise short-term, it's easy to get bitten.  But that can be true of any investment if you "have to" sell during a dip in the market.

[huub]

people have been talking about the classic bike price bubble for as long as i have been involved in classic bikes ( 45 years. i'm that old))
but i cant remember any price drops in these years. just a pretty steady increase in prices.
so if you think we are seeing a price bubble right now, wait another 5 years , and it will be even worse.....

personally i would love a serious price drop, i've got a few bikes on the bucket list i really cant afford now,
but i dont think it is going to happen.

[Smithy]

people have been talking about the classic bike price bubble for as long as i have been involved in classic bikes ( 45 years. i'm that old))
but i cant remember any price drops in these years. just a pretty steady increase in prices.
so if you think we are seeing a price bubble right now, wait another 5 years , and it will be even worse.....

personally i would love a serious price drop, i've got a few bikes on the bucket list i really cant afford now,
but i dont think it is going to happen.

Agree..lots of people trust what they know. We were discussing this at work today among bike and car enthusiasts and we agreed that the classic market will be strong for a few more decades.

[MarkPell]

But, don't you think as some of us *ahem* "long in the tooth" potential buyers fade into the sunset and are no longer buying, the market will have to come down?
I can't see the next generations having as much interest in these type of machines as we did growing up lusting after them (but couldn't afford).

[Phang]

I am relatively young in this forum, born in the 70s.

I like classic motorcycle, will admire all of them. If I have to part with my money to own an old motorcycle, there is a very clear cut line at 1970. I have very little interest in owning one of those that older than 1970.

[dxhall]

That's generally what has happened.  The buyers driving the collector car/bike market have historically been persons who wanted to buy those cars or bikes when they were new, but couldn't afford them.  When those persons age out of the collectors' market, there are few people left who have any interest in the old stuff. Why would a millennial want a '67 Shelby?  There are new Mustangs on showroom floors now with twice the horsepower, and vastly better handling. 

It's the history of the old stuff that makes it desirable, not intrinsic merit of some kind.  People who didn't live that history, or care nothing about it, have no interest in old vehicles.

[Lannis]

But, don't you think as some of us *ahem* "long in the tooth" potential buyers fade into the sunset and are no longer buying, the market will have to come down?
I can't see the next generations having as much interest in these type of machines as we did growing up lusting after them (but couldn't afford).

Hasn't happened yet, though.

Generational die-off is not a 25-year "step" function - it's a smoothly continuous thing.

The men who bought new Harley "Silent Gray Fellows" and Henderson Fours (our grandfathers) are all gone now.   The guys who bought Knuckleheads when they were new are mostly gone now, or in their 90s and out of the game.   The guys who bought the last Indian Chiefs new are mostly gone too.  The guys who bought the first Triumph Bonnevilles, the last Vincents, the Rocket Gold Stars, and the first /2 BMWs are in their 70s and many of THEM are cashing out of the game (present company excluded of course).

But every single one of these bikes has been rising in price, ever since they quit being "old used bikes" 20 years after they were sold and became "classic" or "vintage" or "pioneer" bikes.   

And I don't think that any of us ever expects the prices to come down, outside of some world economic disaster unrelated to bikes, which would affect everything anyway.

Me, I'm leaving behind at least one of my progeny that will be more interested in my old bikes that I am ... !  And there are many many more ...

Lannis

[Lannis]

When those persons age out of the collectors' market, there are few people left who have any interest in the old stuff. Why would a millennial want a '67 Shelby?  There are new Mustangs on showroom floors now with twice the horsepower, and vastly better handling. 

I believe that if you look into the possibility of buying an old Shelby Mustang, or a Cobra, or a Hemi Cuda, you will come to a different conclusion.

If no one wants them, why do they cost half a million dollars 50 years down the road?   Do you honestly think that in 20 years, when ALL the people who owned them new are dead, the price of even a garden-variety 289 Shelby Cobra, or a '68 GT500 Mustang, will drop down near the price of a new one?

Even the "bubble-priced" XKE Jags, which are vastly inferior in performance vs. any new high-bucks sports car, are still priced beyond the ability of most people to buy them.

Lannis

[Toecutter]

I can only speak from the Classic Honda end of things... as that's "my thing".

CB750s... so many "it was running when I parked it", or "it just needs the carbs cleaned", bikes out there... and everyone wants $2500 for them, no matter the condition. My rule for buying an old bike... if I can't start it, it's a parts bike.

I don't pay market value on someone else's "project", UNLESS I know the person and know what kind of shadetree mechanic they are. Some old bikes are in fantastic condition, but it's pretty easy to tell which ones, just by talking to the owner. If they know their shit, it's apparent.

My "daily rider" SOHC CB750 looks like a rat, as I haven't put any real work into the appearance of it, but it's got completely new electrical front to back, a brand new electronic ignition system. New suspension front and rear. All bearings replaced. Barnett Clutch, new cables, gauges, controls and switches. New master cylinder and rebuilt calipers. Etc. But it looks like shit. I probably wouldn't get $1500 for it, unless the purchaser knew their stuff. But I see bikes that look like someone started to build a "cafe racer", that won't start, are basket cases, or have been hacked up beyond recovery, going for twice that. It's entirely dependent on the buyer. I watched my buddy's ex "customize" her CB750... I wouldn't ride it if you paid me, but she got constant offers for it. I don't get it.

And don't get me started on internal changes. How the hell would I ever convince anyone that my '74 has a Yoshimura 812 kit in it?

I love my Guzzi V7 Special. Fantastic bike, but it just doesn't have the charm and smiles per mile of my '72. Maybe I'd feel different if I got my hands on a classic 70s Guzzi someday. There's just something about a classic that can't be matched by modern gadgetry.

[dxhall]

Actually, I do.  Shelbys may not be a good example because there weren't that many of them, and their relative rarity may sustain their value.  But there are lots of not-so-rare muscle cars which I suspect are dropping in value as the demand for them dwindles.  Market value is the price a willing buyer will pay a willing seller in an arm's length transaction.  If the number of willing buyers drops, prices will drop.   

It's common to see people claiming "My '67 [fill in blank] is worth [fill in huge sum]."  But if no one is paying [huge sum] for it, is that really its value?  I think not.

[Toecutter]

Further... the interest in Classics is only spiking. There's a reason the Bonnie, the V7/V9, etc are coming back. The new generation has more interest in the small-bore classics than they do in a lot of new offerings on tap. Instagram and social media are FILLED with pics of people proudly displaying their new (and newly customized) CB400, or early 80s Nighthawks. The Classic Bonnies, the Nortons, The Ironheads... these are the bikes people are aspiring to own, but they're getting there through the UJMs. I don't know that the bubble is going to burst, I think it's just expanding to include previously "undesirable" bikes, beyond the standard "must haves".

Hell, I'd love to get my mitts on a CT90, or a nice Supercub, if I could find one.

[oldbike54]

 A bit of research indicates those million dollar Mopars are now worth considerably less . We went to the large Mid-America classic motorcycle auction in Plano TX for several years in a row starting in 1990 , trust me , there was a spike in the supposed value of nice Brit bikes that crashed in about 1995 , nice professionally restored Triumphs and BSA's were not even approaching restoration costs.
Investors artificially inflate the market , which deflates as they lose interest .

 Dusty

 

[Lannis]

Hell, I'd love to get my mitts on a CT90, or a nice Supercub, if I could find one.

Good luck with that!   Bring a couple thousand with you ....

On the cars, does no one see the irony in saying that "the value is falling" of a car that sold for $5000 in 1970 and could be bought for $8000 in 1980 "dropping in value" from $300,000 to $200,000 today ... ?

Lannis

[LowRyter]

I have a buddy that is very much into the MoPar hobby.  He pretty well blames Barrett Jackson for ruining it for the average guy and turning it into a rich man's game. 

I doubt that 50 years from now when the Boomers are dead that a '69 Super Bee 6 Pack will maintain value like abstract impressionist art.  The millennials have little interest in cars and bikes.  You might look at the "classic cars," a Pebble Beach Dussie still has value among a handful of rich guy collectors but try to give away a restored Model A.  How many folks collect Conestoga wagons now (BOOMMER....)?

[twowings]

Not everything needs to be about money...my Norge will never be worth anything to anyone but me but I just don't care...I love it like a family member...

[oldbike54]

Not everything needs to be about money...my Norge will never be worth anything to anyone but me but I just don't care...I love it like a family member...

 Yep .

 My comments were based on the idea that cars and motorbikes make good investments .

 

I have a buddy that is very much into the MoPar hobby.  He pretty well blames Barrett Jackson for ruining it for the average guy and turning it into a rich man's game. 

I doubt that 50 years from now when the Boomers are dead that a '69 Super Bee 6 Pack will maintain value like abstract impressionist art.  The millennials have little interest in cars and bikes.  You might look at the "classic cars," a Pebble Beach Dussie still has value among a handful of rich guy collectors but try to give away a restored Model A.  How many folks collect Conestoga wagons now (BOOMMER....)?

 We had a guy just West of here who was buying Model A's as investments . He lost his ass .There will likely be a few very rare vehicles with documented history of having been raced or owned by someone extremely famous that will hold their value , but work-a-day stuff peaks and then declines in value . Despite the crazy prices a couple of very rare Vinnies have sold for recently , an English friend reassures me that a decent running Rapide can still be had for about $35K in England .

 Dusty