Will the 5711 bubble ever burst?

[wisguy]

Years ago I passed on a 5711 blue at MSRP (yeah I know).

I've finally decided that I want it bad enough to pay the premium, flipping a couple of my pieces I can get one new for the equivalent of $46k (my cost), considering I'd make money my pieces.

$46k is crazy I know, but still below the current "market rate".

I know that by doing this I'm at risk of buying at the top and be left holding the bag if I ever want to flip it, somewhat unlikely but you never know.

Interested in your opinions, will the bubble burst and go back to MSRP or continue to grow?

[lapince]

It will either continue like this or maybe grow a little, I don't think one day people will not want it anymore and prices will fall, except maybe if a big economic crisis hits, then yes people able to buy will be much less than now, so that might play a lot, but not to make the used prices get down to msrp, will still be a certain premium.
Now would I pay 46k for it? No way, but I guess if you really love the watch and are ready to pay that price why not, but damn 46k, that is totally insane, had I not gotten my 2 Nautilus about 1,5 years ago at swiss retail I would clearly not be having one right now, never thought it would get so insane...

[RussW]

I think that for as long as there is a healthy market for luxury mechanical sports watches the 5711 will be fine. If and when the 5711 bubble bursts I think it will be due to a wider shift in the market. I’ll say “status quo” for now.

[karasus]

I did a similar move to get my 5712A, flipped a 5402 C series then added 10k cash. For me personally I wanted a 5712A that was a bit different and has collectible value.

It was a Geneva seal 5712A which only had 2 years of production (2006-2008) and also had a significant dial difference from the current 5712A: Single dot on power reserve and greenish dial color of the same tone as the 3700A.

If it is a Geneva Seal 5711 (2006-2008) then I would probably do it since those are quite rare, but that is a personal choice and preference for my collection. You should decide what works best for your collection and go from there.

[tng11]

Anecdotally it seems that prices for the 5711 and 5712 are coming down a bit from the peak. A few greys seem to have been sitting on these pieces for months even after some price reductions (e.g. back in April, 5712s would sell quickly at $54K+ and 5711s at $52K+, and we are respectively seeing examples at $52K and $47.5K sit for weeks/months.)

I think it makes sense, given that many people who would have been impatient enough to pay a premium would have already ponied up. Granted, prices are still higher than what we started 2018 with, but lower than the apex which seemed to be around April or May.

Interestingly enough, it seems that there has been a run on 5726 and 5990s with prices on those going up significantly this year. My intuition is the run will be short lived, as these pieces are in a higher price category, and are less difficult to obtain from ADs.

[tyler1980]

Originally Posted by RussW

I think that for as long as there is a healthy market for luxury mechanical sports watches the 5711 will be fine. If and when the 5711 bubble bursts I think it will be due to a wider shift in the market. I’ll say “status quo” for now.

i agree. If it gets bad for the 5711 its going to be worse for every watch below it, which is everything.

[SL BRABUS]

I say it will pull back a few K, not burst......

Even if the bubble burst, it will not be @ or under retail price....

That for sure......

[thomaspp]

of course it will come down.... for anyone buying any watch currently in production above list you have to assume it will come back down to list price IMHO - that has to be in your calculation is my thought

[beshannon]

Ever?

Well I do not know about that.

What I do know is that as long as the global economy continues to expand and money is easy, demand for luxury jewelry will outstrip supply.

[mafoofan]

Burst.

The Nautilus wasn't always this fashionable. 10-15 years ago, it was the ugly stepchild of the Patek line-up. Similar story with the Royal Oak.

Not saying it isn't a good/important design or watch--but the current frenzy is not historically typical.

[JorgeCCW]

I don't think it will burst, Burst denotes abruptly, and thats not gonna happen. I think is gonna slowly come down to a new equilibrium point. Now if that point is gonna be MSRP or not remains to be seen.

[tyler1980]

Originally Posted by mafoofan

Burst.

The Nautilus wasn't always this fashionable. 10-15 years ago, it was the ugly stepchild of the Patek line-up. Similar story with the Royal Oak.

Not saying it isn't a good/important design or watch--but the current frenzy is not historically typical.

taking those invidivual watches out of the equation and just looking at the general shift toward sports watches i dont think the past and them not being super popular is as relevant. Dress watches are way, way less popular now than then and society is moving more and more casual by the year. All of that is good for sports watches.

[gmstevenson]

I think the rising prices could lead to a resurgence in more complicated PM pieces as owners decide to trade towards higher end complications. As that happens, more inventory will become available on the grey market, which will have the effect of freezing and eventually lowering costs. While not a "burst" of the bubble, I don't think the market will sustain current "grey" prices long term.

[Calatrava r]

I believe PP is increasing allocations with the price increase. Dealers are now getting 2 or 3 per year as opposed to 1 every two to three years prior to the increase.

[GB-man]

I have no idea where the market is headed and if I did I could make a fortune.

More importantly what are you trading for the 5711?

[calatravato]

I would imagine that the market would be strongly correlated to the strength of the global economy/markets. It will be interesting to see what happens in the next few months, with the Shanghai Composite currently in bear market territory.

[RHIII]

As long as people are willing to pay premiums - nothing will change.

Will it eventually? Absolutely — it is unsustainable - analysis of any type of market shows that. A new ‘normal’ will eventually prevail. When will it change -who knows.


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[AK797]

I think we've crossed the Rubicon on this one ever coming back to retail, unless systemic changes in watch market occurs, hard for me to say this as just recently we had a price cut and they were buyable for discounts, but we are in a new world truly now and it's getting freakier all the time, not more normal. Slow fade seems most likely for this and all hyped watches as greys fight hard against a losing battle to keep their huge margins.

[OH2004]

I can't see it coming back to the retail level unless Patek decides to produce and distribute more of them. At some point will come back down to 20% premium

[RussW]

Originally Posted by Calatrava r

I believe PP is increasing allocations with the price increase. Dealers are now getting 2 or 3 per year as opposed to 1 every two to three years prior to the increase.

So that would be between a 4 and 9 fold increase in production. Would be very interesting if true, but I’m sceptical production has increased that much. Possibly a very short term increase?

[Vivalas]

Unlikely it will ever come back to retail, however I think the preowned prices will correct themselves. If the economy does well they will stay high, if it recedes so will prices.

[kneedeep]

I think the more likely scenario is grey market prices will slowly fall as demand gets filled by them and/or PP and MSRP will also rise toward some MSRP to Grey convergence in price. Not fast, but over a few years, so no burst.

[gmstevenson]

Originally Posted by RussW

So that would be between a 4 and 9 fold increase in production. Would be very interesting if true, but I’m sceptical production has increased that much. Possibly a very short term increase?

I spoke to the watch buyer at a large AD a couple weeks ago. He told me that he is receiving four of the blue dial 5711s this year and that he receives them at the same time.

[RussW]

Originally Posted by gmstevenson

I spoke to the watch buyer at a large AD a couple weeks ago. He told me that he is receiving four of the blue dial 5711s this year and that he receives them at the same time.

Is this different to what he previously got?

[gmstevenson]

Originally Posted by RussW

Is this different to what he previously got?

Not sure. I was just offering it as a data point for how many he was getting this year.

[Ichiran]

Long-term wise, it will increase multiple times. I'm using 3700 as the reference here. It retails for $3,100 in 1976 and in the recent May 2018 Phillips auction, a Gubelin example with the cork box sold for CHF 101,250. Another example went for CHF 75,000 in the same auction without the cork box and Gubelin stamp. A complete example with the original cork box should be somewhere in between. That said, it's still a lot of gain even if we factor in inflation to the original price.

https://www.phillips.com/detail/PATE...0&searchPage=1

In the short-term, nobody knows what will happen to the price of the 5711. I do not think the Sterns will increase production of this model any time soon, and there is a chance that this 5000 series may be replaced by another new model. Demand is a factor of economy, job market and marketing. To be fair, Patek has not advertised the 5711 for the longest time, and yet, interest in it never seems to subside in any ways. This is quite an amazing phenomenon in itself.

[Busyboy]

To my relatively naive eye, the pieces on WF that were recently being snapped up, are now hanging around a bit

[mfer]

I too passed on a 5711 2 years ago. The price is rediculous to me for a current production watch that isn’t limited. When I say burst, it’ll go back down to closer to retail.

[thomaspp]

Originally Posted by Ichiran

Long-term wise, it will increase multiple times. I'm using 3700 as the reference here. It retails for $3,100 in 1976 and in the recent May 2018 Phillips auction, a Gubelin example with the cork box sold for CHF 101,250. Another example went for CHF 75,000 in the same auction without the cork box and Gubelin stamp. A complete example with the original cork box should be somewhere in between. That said, it's still a lot of gain even if we factor in inflation to the original price.



https://www.phillips.com/detail/PATE...0&searchPage=1



In the short-term, nobody knows what will happen to the price of the 5711. I do not think the Sterns will increase production of this model any time soon, and there is a chance that this 5000 series may be replaced by another new model. Demand is a factor of economy, job market and marketing. To be fair, Patek has not advertised the 5711 for the longest time, and yet, interest in it never seems to subside in any ways. This is quite an amazing phenomenon in itself.

Interesting comment and I agree the power of the simple time only nautilus is amazing. Now there I no way you can compare 3700 to 5711 in my view! Production numbers alone are wildly different. 3700 1/a they made about 3500 of which only a percent of them are in collectible condition (say 1200-1800 collectible condition 3700 1/a?).

5711 1/a has been running since 2008. I have no idea how many 5711 have been made but let’s take a conservative view of 3 5711 1/a delivered to each AD per year, 434 ADs worldwide.... so that’s 3 x 434 = 1302, 1302 x 10 = 13,020.... so there could be already 13,000 5711 1/a and production continues! My guess and happy to hear other views. Be well!


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[thomaspp]

Originally Posted by karasus

I did a similar move to get my 5712A, flipped a 5402 C series then added 10k cash. For me personally I wanted a 5712A that was a bit different and has collectible value.

It was a Geneva seal 5712A which only had 2 years of production (2006-2008) and also had a significant dial difference from the current 5712A: Single dot on power reserve and greenish dial color of the same tone as the 3700A.

If it is a Geneva Seal 5711 (2006-2008) then I would probably do it since those are quite rare, but that is a personal choice and preference for my collection. You should decide what works best for your collection and go from there.

Very interesting! I have wondered for a long time if collectors would in fact seek out Geneva seal pateks and in fact mark a separating point for what some people want to collect.


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