Most people I know of who buy luxury watches or handbags say they’re a good store of value and can fetch a high resale price in the future. If the market mostly consists of people who buy them for the sole purpose of reselling, wouldn’t that make it a purely speculatively priced item, akin to crypto? How has the luxury market not collapsed?
In: Economics
I assure you they wouldn’t hold their value if we had some sort of major financial calamity, because the recent value has relied on an increase in the number of people being able to purchase them.
Watches, for example, have “held their value” because (a) there has been an explosion of interest in mechanical watches in the last decade or so, (b) certain watchmakers limit their supply as a marketing effort, and (c) we’re at the tail end of literally the longest economic expansion in the history of the United States. But there’s no particular intrinsic value holding their prices up the way there might be for a commodity or a piece of real estate or whatever. They’re luxury items, and we’re living in luxurious times.
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