What's going on in the collector watch world?

If you’re one of the many enthusiasts drearily watching the prices of collector cars turn atomic, know you aren’t the only would-be collector pushed out by a befuddlingly flush bidder’s section. Find solace—or misery—in the fact that nearly every sector of the hobbyist collector multiverse holds a ticket on this runaway money bus; from art, to real estate, to guitars, to rare books—cool stuff’s just flat-out expensive.

Watches are no different. The collector market for the car’s wearable, windable, micro-mechanical spiritual sibling sits impaled upon the same value spike, propelled by many of the same factors that turned your leaky ‘n creaky Jeep Grand Wagoneer into a rolling block of wood-sided auction gold.

Speaking of gold, December saw Sotheby’s complete a landmark sale of a pink gold Patek Philippe perpetual calendar chronograph for an eye-watering $9.57 million, including fees against a low-estimate of $1.2 million, making it the fifth most expensive watch sold at public auction. Just prior to the sale, the storied auction house had 25 registered phone bidders from around the world, each vetted in their capacity for heavy six- and seven-figure bids.

By the time the bidding leaderboard rolled over $5 million, there were still ten bidders waving swollen checkbooks and crypto wallets at Sothebys. Seven bidders stuck around just past the $6 million mark.

“Usually, these extraordinary results emerge from a battle between two determined bidders,” said Jonathon Burford, VP and watch specialist at Sotheby’s. “By the time it reached $7.25 million, multiple people were still bidding on this watch.”

If the idea of dropping just shy of eight figures on some old watch has you completely perplexed, you now know what it feels like when your non-enthusiast friends read the headlines from Arizona auction week. But, if you readily grasp the motivations behind RM Sotheby’s $6.8M sale of that alloy-bodied 1955 Mercedes-Benz 300SL, empathizing with big-money watch collectors is a piece of imported, impeccably presented diamond-laced cake.

We need to first start with understanding the role of cultural semiotics associated with historically significant watch brands, both defunct and extant. In a ranking of the most vaunted manufacture d’horlogerie from history, it’s a battle for second place; Patek is the undisputed crown jewel of the watch collecting pantheon. The reverence for vintage Pateks amongst the cognoscenti approaches that of mid-century Ferraris and big Duesenbergs, combined. Not every major car collector wants a Duesey in the garage, but the pull of a vintage Patek is nigh universal to a serious watch enthusiast.

Collectors value significant Pateks for their brilliance in design, engineering, innovation, complexity, rarity, and role in horological history. That’s only the brand-wide boilerplate stuff; many significant Pateks carry the weight of celebrity and cult-of-personality provenance. Hey, wait a sec—doesn’t this all sound a bit familiar?

The $10 million Patek in question is an excellent capsule-case. This is one of just 281 ref. 1518s to leave the Genevese workshop between 1941 and 1954, an ultra-desirable reference that holds the incredible distinction as the brand’s first serially-produced perpetual calendar chronograph.  Out of the few 1518s that were made, this is one of only 14 cut into the “pink-on-pink” configuration—or a salmon dial against a pink-gold case. An Egyptian prince purchased the piece new in 1951 and stuck it in a safety deposit box shortly thereafter, where it remained for much of his life. At the time of the sale, this horological holy grail presented itself in highly original, museum-quality condition.

See? We car folk aren’t so far removed from the equally anorak and minutiae-obsessed ultra-nerds who fill seats at major watch auctions—at both ends of the financial spectrum. As Sotheby’s landmark 1518 suggests, there’s thousands of watches changing wrists and billions of bucks changing hands as a result. When broken down, it appears we’re waving at each other from runaway trains speeding on parallel tracks.

“The collector watch space going into 2022 is a perfect confluence of wealth, disposable income, and the desire for a non-digital collectible asset, something tangible that carries a history,” explained Burford. “People are looking for something that has character, has a personality – as watches do – and something that you can trade from your bedroom or your desk.”

The lazy—but partially correct—assumption is the current swell in the collector watch market simply follows in step with the surge of wealth and liquidity created in the past two years. More people have more money, so things cost more.

As with cars, there’s pandemic-related nuance that factors into the bonanza. Sudden quarantine and work-from-home restrictions lined the pockets of those who usually fed a leisure vacation and recreation fund, and collectors sought an outlet. “Instead of spending $10,000 on a trip around the world, they would add a piece to their collection,” said Buford. “They’d have the collection in front of them, and think—maybe I’ll sell this, maybe I’ll buy that. People are using Sotheby’s, but they are also using Instagram, forums, and just FedExing them across the world. It’s quite a liquid market.” 

It’s also as simple as more time spent with and around their collection. In the same way you might not want to drive your split-window fuelie to the office, you’re probably not going to wear that half-million-dollar piece to the boardroom, either. But, when working from home, you can take the Corvette to a local lunch, and you can wear your NOS vintage Rolex as you Zoom on the balcony.

Demographics are also shifting. Long the hobby of the middle-aged-and-older professionals—think lawyers, doctors, and executives—Burford notes the influx of a younger, hipper collector that brings in money and interest that previously didn’t exist. “Something like 40 percent of new entrants to the market are under 40,” he recalls. “We’re seeing tech entrepreneurs in board shorts and flip-flops wearing Paul Newman Daytonas and 30-year-old investment bankers with [Patek Philippe] Nautiluses.”

Until roughly a decade ago, high-value watch collecting cast its focus primarily on highly complicated vintage watches with austere, upright designs and precious metal cases. Now, some of the most sought-after collector watches—both new and vintage—fall into the category of sports watches, divers, and chronographs. Most wear steel cases and feature robust construction, with buyers often paying a premium for a steel sports watch over the same watch hewn from gold. Seriously—it’s easier to get a new gold Rolex than it is to get one in only steel.

“The driver of a lot of these new prices are the 30-, 35-, 40-year-old buyer with disposable income who want something cool from a historic brand with some established history,” Burford says. “They’re buying steel sports watches because they can wear it to the golf course, they can wear it to the club, they can wear it to the boat, and wear it to the office. It’s one watch that’s appropriate for everything.”

It goes deeper than outright utility. Not unlike those who spend big for air-cooled Porsches and old Land Rovers, purchasing certain watches is also buying a small ticket into a certain lifestyle. The Porsche crest carries generational weight and projects specific signifiers to those who are similarly in-the-know, in the same way that wearing a vintage Rolex Explorer or early Omega Speedmaster is entirely cultural cosplay. Your specific Moonwatch didn’t actually land on the moon, your 1016 Explorer didn’t actually crest Mt. Everest, and your hot-rod long-hood 911 didn’t actually race at Sebring in 1968, but this is what it felt like, right? Kinda?

All this to say there’s an eerie amount of overlap between those who like their machines loud, large, and fast, and those who like theirs quiet, tiny, and accurate. Still, there’s bound to be divergence between these sibling hobbies, and the biggest comes down to condition, preservation, and logistics.

In the watch world, “restored” is about the most toxic word you could affix to a vintage watch. Originality is absolutely key to the point where a good condition watch with OEM service parts—i.e. officially swapped movement parts in the name of maintenance—are sold at a considerable discount over something with everything intact.

It doesn’t take much to utterly tank the value of a vintage watch when originality is in question. “Anything that is both absolute originality – case, dial, movement, the whole thing—will achieve exceptional results,” Burford explains. “Anything with service parts, or has had parts swapped out, or anything questionable about the watch overall, it will sell at a significant discount. When I mean significant discount, I mean certain collectors simply won’t purchase the watch no matter how much you discount the price. It effectively becomes unsellable.” Explain that to the Gullwing owner with fresh paint and a replacement gearbox.

Irrational? Sure, but rationality was never part of the equation to begin with. No million-dollar car will serve the purpose of pure transportation better than a new Toyota Camry, and no $10 million perpetual calendar Patek will tell time more accurately and reliably than a $40 Casio G-Shock—or your phone. It’s what we want to inspire within ourselves that makes these silly, stupid mechanical totems worth our time. Burford put it best; “Collectors want to believe, in all areas of collecting, that something has a soul; they fall in love with these things, and they’re inanimate objects. If we can project characteristics, character, and soul into these things, it gives reason to what we do, which is essentially quite irrational. It’s us – it’s the community, the auction houses, the enthusiasts – we all feed into this mystique of these ‘things.’”

Happy collecting.