I won’t say back to earth, but watching this week’s HDH auction, it seems like prices have at a minimum plateaued and may even be on the slight downslope. OTOH the lack of a “headline” collection may have simply just created less buzz for this particular auction … or I’m just acclimated to the “new normal” and these prices just don’t surprise me now.
No. People are bidding in the “new” range of crazy prices, that’s all.
To me the observed scenario for a lot of wine. One lot of x wine. Auction house sets estimate. Someone bids just above the estimate (which actually includes buyer’s premium when your bid does not) because they “really” want it and don’t think they are much above the estimate. Wins lots and BP is added. Now a new price for wine. All retailers across the universe change prices to reflect new price.
Same wine comes up in next auction. Estimate from auction house informed by new prices. Much higher estimate (which includes buyer’s premium when your bid does not). Repeat. Then we end up normalizing crazy auction prices that are not a true market. Just two people who happen to want that one item on that one day. I’m sure some economist will tell me that this is wrong. But one person could move the entire market this way. I think that Koch did this in the 90s.
But when I see people bidding well over the retail price of something (that is available at retail), it seems to me that people are getting irrationally swept up in things.
I think a big part of this HDH auction is the lack of big names. A lot of mixed lots, which tend not to attract higher bids. Prices have been higher than I’ve been willing to spend (no wins so far), but rarely outrageous, other than the lot of six recent Prum spatlese bottles which went for over $1,000. I saw nothing special about the designations of the wines, and simply couldn’t figure out the bidding war.
Perfect example are the Mugneret Gilbourg NSG wines in the current HDH auction. They are going for over $300 with the buyers premium when there are sources selling them for $225.00. And these are not case quantity, I could understand that…
Activity and numbers have softened noticeably, but not substantially, in the past 3 weeks of online auctions.
Some of that is over fears about another COVID shutdown and general consumer spending. Some I think is also due to few in-demand wines- which is not uncommon towards the end of summer when you just have online auctions going and few willing to pay the cost of direct cold chain transport when consignments cannot be shipped.
The real test will come with the first major live auctions in September. I am anticipating a significant number of investors and investor-collectors will be selling a lot of blue chip wines, but that prices are going to be slightly down from the peaks of late spring. Time will tell, but while I do not foresee a crash, I do think prices will soften slightly for heavily traded blue chips.
Very good wines that people actually like to drink and can afford to drink will, I think, continue to be harder to come by and hold their current pricing levels or perhaps go up a bit.
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I understand the auction prices because of higher inflation. What I don’t understand is are people actually drinking the wine, or trying to flip them?
Sometimes it’s a combination of both. I don’t purchase wine or spirits with the intention of selling it but sometimes if things appreciate enough, I may be more interested trading or selling them. For example I’ve bought a ton of bourbon the last years that has appreciated 200-500%; not so sure I’d want to crack bottles at the current valuation. To a certain degree it’s a way to diversify from stocks, crypto and real estate.
Went through some lots from Hart Davis Hart and all seemed to be at the max or over.
From my look at this massive auction there seemed to be plenty going well below max and below retail. Some good values to be had – 2014 Lynch Bages at $85/bottle, 2017 Tertre Roteboeuf at $100/bottle, lots of solid older Bordeaux and Burgundy at reasonable prices, e.g. 2000 Grand Mayne in OWC at $55/bottle, 1999 Grand Puy Lacoste at $55/bottle, mixed lot of 2005 Gouges Vaucrains and 2006 Jadot Clos St. Jacques at about $100/bottle.
2009 Calon segur was around $100/btl too.
Not sure, I’ve gotten smoked at HDH and WineBid this week. Researched and went above previous market for domestic bottles. Easier to go Wizers or Herb Farm at these prices and be assured of provenance.
Someone made the perfect Yogi Berra paraphrase in one of the other threads – Nobody buys wine at auction anymore, the prices are getting bid up way too high.