The State of the Secondary Watch Market: Trends, Challenges, and Opportunities

The secondary watch market has experienced a significant decline over the past few years, with resale prices dropping consistently since peaking in May 2022. According to a recent report by WatchCharts and Morgan Stanley, the market has seen 11 consecutive quarters of falling prices, with a 5.7% year-on-year drop in 2024. This downward trend is attributed to a flooded resale market, as investors who bought watches during the market’s peak are now rushing to cash out. Additionally, economic uncertainty and rising interest rates have dampened demand for luxury goods, creating a challenging environment for both buyers and sellers.

The Decline in Resale Prices: Causes and Implications

The primary cause of the decline in resale prices is the surge of inventory in the secondary market. As prices began to fall, investors who had purchased watches as assets during the market’s boom scrambled to sell, further flooding the market and driving prices down. This has created a widening gap between retail and secondary prices, making some brands’ new watches appear overpriced to consumers. The WatchCharts and Morgan Stanley report predicts that secondary prices will likely continue to fall in the foreseeable future, signaling a potential inflection point for the market.

The Big Three: Rolex, Patek Philippe, and Audemars Piguet

Despite the overall decline, certain brands continue to hold their value or even sell for well above retail price. Rolex, Patek Philippe, and Audemars Piguet, collectively known as the "Big Three," dominate the secondary market, accounting for approximately 64% of all transactions. As of January 2025, 56% of Rolex models, 63% of Audemars Piguet models, and 38% of Patek Philippe models were trading above their retail prices. This is largely due to these brands’ strategy of maintaining limited supply, which creates a disparity between demand and availability, driving up secondary market values.

The Most Sought-After Models: A Closer Look

Among the watches that consistently command high premiums, Rolex’s Daytona and GMT-Master II, as well as Patek Philippe’s Aquanaut collection, stand out as particularly desirable. These models are characterized by timeless design, brand heritage, and cultural appeal, making them highly sought after by collectors and enthusiasts. The Rolex Daytona, for instance, has become an icon in the world of watches, with its association with motorsports and a reputation for precision. Similarly, the Patek Philippe Aquanaut, with its sporty and minimalist aesthetic, has gained a strong following over the past three decades.

The Role of Social Media and Trends in Shaping Demand

In addition to the inherent qualities of the watches themselves, social media trends play a significant role in shaping demand. Models that gain traction online, often due to celebrity endorsements or viral content, can experience sudden spikes in value. Charles Tian, founder of WatchCharts, notes that such trends can "rocket" certain watches into high demand, creating opportunities for savvy investors. However, while this phenomenon can be lucrative, it also underscores the volatile nature of the market.

Advice for Buyers: Balancing Investment and Personal Satisfaction

While the potential for profit is tempting, experts caution against choosing a watch solely based on its resale value. Paul Altieri, founder of Bob’s Watches, advises buyers to prioritize their personal enjoyment of the timepiece. "Find something you are going to enjoy, not something that you think will go up in value," he suggests. Quality assets, including watches, tend to appreciate over time, but the journey of owning and wearing a watch is equally important. By focusing on timeless designs and trusted brands, buyers can make informed decisions that balance both investment potential and personal satisfaction.

In conclusion, while the secondary watch market faces challenges, there are still opportunities for investment and ownership. By understanding the trends, choosing the right models, and keeping a long-term perspective, collectors and enthusiasts can navigate this complex landscape with confidence.