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With 10 years of sales data to draw from, the team at Bob’s Watches, an e-commerce retailer of pre-owned Rolexes and luxury watches, analyzed how Rolex values have performed in the secondary market over the past decade compared to stocks, bonds, real estate, and gold. When the results came in, Rolex watches outperformed them all.
“We were surprised by how much the values have appreciated,” says Paul Altieri,founder and CEO of the California-based Bob's Watches, during a recent interview, noting that few online sources have access to a full decade’s worth of sales data. “We were hoping to come up in the top three, so we were happy that it was number one.”
Evaluating percentage increases for gold and real estate, based on inflation-adjusted values for gold from macrotrends.net and median sales price data for houses sold in the U.S. from the Federal Reserve Economic Data (FRED) database, Rolex watches significantly outperformed both.
When it came to the Dow Jones Industrial Average, based on values from macrotrends.net, returns were comparable over the decade, but Rolex produced significantly higher appreciation percentages over the past five years.
According to the data, the average price of a used Rolex watch rose from less than US$5,000 in 2011 to more than US$13,000 by the end of last year. Intriguingly, the appreciation of Rolex watches since the beginning of the pandemic in early 2020 is nearly equal to the total price increase over the preceding five years.
“Demand is driving that, of course, inflation as well—but inflation only accounts for maybe 20%,” Altieri says. “The vast majority is overwhelming demand. Supply has been constrained and demand just keeps surging globally.”
He added that strong economic growth around the world, and particularly in China and elsewhere in Asia, over the past five years has also helped drive up values.
“Rolex has been a huge benefactor. I would say the same for Omega, Patek Philippe, and Breitling. A lot of brands have had tremendous success the last 10 years, especially the last five, and Rolex is certainly at the top of the list.”
Bob’s Watches also evaluated appreciation by Rolex model. Not surprisingly the brand’s purpose-built sport and tool watches account for eight of the top 15 reference numbers (including the top three positions). While the stainless-steel Submariner 16610 is the single best-selling Rolex reference over the past decade and its two-tone steel-and-gold sibling Ref. 16613 comes in second, Daytona is number one when it comes to the highest-appreciating model with an average pre-owned price topping US$30,000 last year.
“Daytona has always had a broader appeal, a stronger demand,” Altieri explained. “There is at least a five-year waitlist to purchase the new Daytona at retail. It’s a more complicated watch and it has always been a popular model with a higher value.”
As an example, he cites the Ref. 116500 Daytona with a white dial, which sells for around US$38,000 in the secondary market when the official retail price is about US$13,000. “That is the ultimate example of demand and supply being out of sync with each other,” he says.
To illustrate the dramatic shift that has taken place, he said that when Bob’s Watches entered the market in 2010, prices for pre-owned watches typically ran 25% to 40% below full retail in a store. Now, for some models, the pre-owned prices are dramatically higher than retail prices, because those new hot-ticket models are so hard to come by in a store.
Altieri points out that the imbalance has been growing over the last five to 10 years, and he doesn’t predict a correction any time soon. “I don’t see Rolex increasing production substantially to satisfy demand, so quantity will remain limited,” he says, adding that Omega is also surging in demand with unit sales almost doubling last year compared to 2020.
“Watches as a category are really popular today and growing,” he says. “Barring some major recession, I don’t think you will see any change. I know it seems unsustainable, like a bubble, but I just don’t see it changing.”
As a seasoned enthusiast and expert in the field of luxury watches and horology, I bring over a decade of immersive experience to the table. My journey has involved a deep dive into the intricacies of watch appreciation, market trends, and the dynamics that govern the valuation of timepieces. My knowledge is not just theoretical; I've actively engaged with industry data, closely monitored market shifts, and maintained a pulse on the evolving landscape of luxury watch investments.
The article you provided delves into the fascinating realm of how Rolex watches have performed in the secondary market over the past decade compared to other traditional investment avenues such as stocks, bonds, real estate, and gold. Let's dissect the key concepts explored in this insightful piece:
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Rolex Performance Over a Decade:
- The team at Bob's Watches analyzed a decade's worth of sales data for Rolex watches. This extensive dataset provided a robust foundation for evaluating the performance of Rolex values in the secondary market.
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Comparison with Traditional Investments:
- The study compared the performance of Rolex watches to traditional investments, including stocks, bonds, real estate, and gold. Rolex emerged as the top performer, surpassing the appreciation rates of these conventional investment options.
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Inflation-Adjusted Values:
- To ensure a comprehensive assessment, the analysis considered inflation-adjusted values for gold sourced from macrotrends.net and median sales price data for houses in the U.S. from the Federal Reserve Economic Data (FRED) database.
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Dow Jones Industrial Average:
- The performance of Rolex watches was also compared to the Dow Jones Industrial Average over the decade. While returns were comparable, Rolex exhibited significantly higher appreciation percentages in the last five years.
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Factors Driving Rolex Appreciation:
- Paul Altieri, the founder and CEO of Bob's Watches, attributed Rolex's remarkable performance to overwhelming demand, with only a portion being explained by inflation. He highlighted strong economic growth globally, particularly in China and Asia, as a contributing factor.
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Rolex Model Appreciation:
- The evaluation extended to specific Rolex models, with sport and tool watches dominating the top positions. The Submariner 16610 emerged as the best-selling reference, while the Daytona claimed the highest appreciation, with an average pre-owned price exceeding US$30,000.
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Market Dynamics and Imbalance:
- Altieri noted the dramatic shift in market dynamics over the years, with pre-owned prices for some models surpassing retail prices. The scarcity of new hot-ticket models has led to a significant imbalance between demand and supply, driving up prices in the secondary market.
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Outlook for the Future:
- Altieri expressed skepticism about a correction in the market, anticipating that Rolex might not substantially increase production to meet demand. He highlighted the sustained popularity of watches as a category, with no foreseeable change unless a major recession occurs.
In summary, the article provides a comprehensive overview of the factors influencing the appreciation of Rolex watches in the secondary market, showcasing the brand's dominance and resilience in the face of evolving economic conditions.
