Jerry Heasley
May 1, 2010

Has the recession affected Mustang prices? Are they down? Or, like gold, have Mustangs-at least selected classics-gone up in value?

Craig Jackson, chairman and CEO of the Barrett-Jackson Collector Car Auction, said, "I don't think regular Mustangs-the high-production number cars-have taken much of a hit. They didn't take a big run up and they didn't take a big run down." On the upper end, he hasn't seen "huge escalations" in prices either. Instead, there's been a "leveling off and thinning out."

Barrett-Jackson President Steve Davis compared cars like the '65 Mustang convertibles to "blue chips that haven't been affected by a wild swing one way or the other." By blue chip, Davis didn't mean stocks. As 401k holders know all too well, stocks have taken huge hits since the recession began in late 2007 and early 2008. Davis said buyers are looking for a Mustang as both an investment and a driving enjoyment that is not subject to "someone sneezing on Wall Street and having half your investment evaporate."

Historically speaking, jitters on Wall Street push investors into other "hard assets," including collector cars. Certain classic cars are commodities. Davis alluded to "Wall Street types" who now much more readily recognize collector cars through the market place created by nationally televised auctions like Barrett-Jackson.

George Waydo, owner of K.A.R. in Columbus, Ohio, retails '65-'73 Mustangs on an almost daily basis. More than a salesman, George is an astute purveyor of the Mustang market. He speaks more like a college professor than a vendor. The soft-spoken Ohioan restricted his initial market analysis to the "plain Mustangs," referring to the '65-'70 fastbacks, convertibles, and hardtops that "most hobbyists own if they don't have the money to buy a Shelby or a Boss." He continued, "Our experience is the basic cars, like GT and non-GT fastbacks, coupes, and convertibles. They haven't seen any drop off in value versus a couple years ago."

Waydo was talking about'65-'68s in stock condition. He has noted a discrimination in quality, saying, "The really nice cars have had no drop off. If anything, they command a slight premium." For a Mustang to command a premium in the worst recession since the Great Depression of 1929 has to be very heartening for owners and enthusiasts. Their cars are drivable investments.

Appearing to be on the same page with Jackson and Davis, Waydo backs up his statements with specific examples. "We sold a primo '68 390 fastback and it brought the same kind of money, high 30s, that it brought a year or two ago. And we've sold some '65-'66 non-GT convertibles in the $32,000-$34,500 range, the same kind of money they brought a couple years ago."

Bob Perkins, expert on all things Boss Mustang and a master of concours Mustang restorations, added, "A lot of average cars dropped in price," he said in reference to average Bosses and other more expensive Mustangs, such as Cobra Jets and Shelbys.

There is little doubt that the high-dollar cars have dropped in value. Waydo did not mince words: "The Boss, Shelby, and Cobra Jet Mustangs have dropped dramatically. Based on what we've seen, the high-end market has taken the biggest hit."

Waydo gave an example of a '69 Shelby convertible he sold for $175,000 in September 2008. "That same Shelby today would be hard pressed to bring $100,000. That's how much that market has dropped. And the Bosses that were bringing $80,000-$90,000 are having a real hard time bringing $50,000 today."

Perkins echoed the same sentiment with the upper end classics when he said, "Everything is a little softer. But the economy has hurt the average cars more than the really good stuff." He was talking about average Boss 302s, cars that were perhaps painted 10 years ago and have had nothing done to them since. These cars-with "pretty nice workmanship"-sold a few years back for $100,000-$110,000; they are now down to around $80,000. And the Bosses that used to bring $80,000-$85,000 are now selling for $50,000. Perkins claims these average Boss Mustangs were overpriced in the boom times because they got "dragged up with the good stuff."

Perkins believes that, with the economy down, average cars don't sell as well as the top cars. His reasoning is simple. People with disposable income buy the best Mustangs.

As an example, Bob mentioned the black '69 Mach 1 Cobra Jet that sold at last January's Barrett-Jackson for $128,000. While other Mach 1s with the 428 Cobra Jet brought half that value, this black Mach 1 set what might be a world's record.

Bob knows the car well. He said, "That was Ralph Papa's old car. Drew Alcazar restored it first. We upgraded it for Dick Bridges to Thoroughbred standards and did some detailing on it." Perkins has a reputation as a Thoroughbred Mustang restorer. There's no question his workmanship increased the value of this stunning Mach 1. Meanwhile, other 428 CJ Mach 1s brought $50,000-$80,000.

Another upper end classic bringing near world record money at Barrett-Jackson was a red '66 GT350. I stood a few feet away from the auction block and watched this car sell for $195,000. The buyer also has to pay a 10 percent commission, increasing the total to $214,500. Waydo said, "Barrett-Jackson is not the real world."

He may be right, but the money is real. The bidders create their own market. The TV audience is national. I have been attending this auction for over 25 years. I always meet newcomers to the hobby. These people are fascinated with the cars most of us have loved for decades.

The red '66 Shelby was stunning. With a roomful of bidders loaded with money, apparently the pricing got competitive. Somebody paid "too much." Funny thing is, Jackson remembers, "Not very long ago, $200,000 was 427 Cobra money." A 427 Cobra today is worth close to a million dollars.

About 30 minutes after the '66 GT350 sold, I watched a '68 GT500KR convertible sell for $142,000 plus commissions. A big-block KR convertible sold for less than a '66 GT350? How can this be?

Perkins pointed out that a '68 GT350 convertible, a Lime Green small-block, sold for $135,000 at Barrett-Jackson. The price almost matched the big-block KR because of the quality difference. Bob said, "That shows that cars with exceptional workmanship, quality, and the right stuff still bring good money."

Big prices on great cars during the recession are still not the norm. Perkins mentioned owners with "top end cars" who were into the stock market and real estate and lost their shirts. They were forced to sell some of their cars. These sales freed up some of the high-end Mustangs that probably would never have seen a for-sale sign. "They aren't cheap, but at least they've become available," Bob said.

One of those rarities that Perkins had the pleasure to purchase was Ohio George Montgomery's Mr. Gasket twin turbocharged Boss 429 AA/GS drag car. Perkins said, "I could never have bought that car if the owner hadn't gotten into financial trouble. He paid Montgomery a million and a quarter for the car and I bought it for a fraction of that price."

The owner of a '67 GT500 recently told me he wanted to sell. He had over $50,000 in his restoration, but he would wait for the market to rebound because he didn't have to sell. He didn't need the money. Many owners of higher-priced Mustangs have told me the same thing. The ones who don't have to sell are holding. The ones who have to sell have to take less.

While the classics in stock condition held their value or even escalated, most restomods did not fare nearly so well. Waydo cites a '65 fastback built by K.A.R. "It was on the cover of the December 2006 Mustang Monthly. That car sold quickly for the asking price of $79,500 a couple years ago. Today, that car would be in my showroom with no takers."

Of course, in stock condition a fastback of this same model year would sell for quite a bit less than $79,500. Apparently, in this economic climate, buyers do not feel comfortable paying a big premium for a restomod. They would rather buy a stock car for less money. George believes when the market comes back, so will restomod prices.

Meanwhile, back at Barrett-Jackson, the Ring Brothers' wild "Reactor" '67 fastback sold for $235,000 plus 10 percent commission. Apparently, there are restomods and then there are restomods of an extreme build and a healthy dose of fame to push the envelope to world record prices at the world's greatest collector car auction.

Another part of the Mustang market picture is sales to foreign markets. Waydo said, "In the last year, no less than half the cars we've sold have gone overseas."

For example, in 2009, K.A.R. sold a small-block, non-GT Mustang fastback for $34,500, which is on the high side in the U.S. It sold within 30 days to a buyer in New Zealand. Waydo had six back-up buyers in Australia for this same '68 before the deal was done.

Another example is a '66 Emberglo A-code fastback that needed a total restoration. The Mustang was rust-free, but had weak paint, tired interior, and dirty engine compartment. It sold within two weeks to an Australian for $22,500. Apparently, the Aussies and New Zealanders favor either number-one quality cars or rust-free project Mustangs. George said, "They'll buy one or the other, but nothing in-between."

The economic downturn lowered the number of domestic buyers who will pay the price for such classics. At the same time, foreign buyers appear anxious to pay the price. One Australian buyer told George they felt an urgency to buy now, during the downturn, to get a good deal.

Fox-body Mustangs entered the hobby as appreciating collector cars sometime in the early 2000s. The '87-'93 models were hot three to four years ago. Prices have really cut back. However, this drop in values and demand happened prior to the recession. The recession didn't help Fox-body values, but the real reason for the sudden retreat of prices and interest points directly to the arrival of the '05 Mustang and the availability of aftermarket performance parts. The retro-styled '05-'10 Mustang has apparently swayed many Fox-body people.

Only time will tell, but if past history is any indication, the Fox-body Mustangs will come back in value for reasons we don't know yet. Likewise, the rest of the market will also return. In that return, we always see realignment. Although the rise in Mustang prices is sometimes bumpy, over the long trip, the road has always been to the upside.

Vintage Mustang Sale Prices at 2010 Barrett-Jackson, Scottsdale, AZ*

275,000 '70 Boss 429 Restored, Grabber Green
253,000 '67 Fastback Ring Brothers' Reactor
247,500 '66 Shelby GT350 First '66 GT350, restored
214,500 '66 Shelby GT350 Red, SAAC concours gold
214,500 '70 Boss 429 Restored, Grabber Orange
176,000 '70 Boss 429 Restored, Grabber Blue
165,000 '68 Shelby GT500KR Convertible, restored
161,700 '68 Shelby GT500 Convertible, 7,500-mile survivor
159,500 '67 Fastback Ring Brothers' Copperback
159,500 '67 Shelby GT500 Mostly original
156,200 '68 Shelby GT500KR Convertible, red, restored
143,000 '68 Shelby GT350 Fastback, Lime Gold restored
128,700 '69 Mach 1 Black, R-code, restored
110,000 '68 Shelby GT500 Convertible
110,000 '67 Shelby GT500E Unique Performance "Eleanor"
106,700 '67 Shelby GT500 66,000 miles, Lime Gold
104,500 '65 Fastback Restomod
100,100 '69 Mach 1 R-code 428 Super Cobra Jet
100,100 '70 Boss 302 Concours
100,100 '68 Shelby GT500 Convertible, restored, automatic
97,900 '70 Fastback 428 Cobra Jet
95,700 '68 Shelby GT350 Fastback, Hertz rental car
95,700 '68 Shelby GT500 Restored, 88,000 miles
92,400 '68 Shelby GT350 Fastback, Hertz rental car
90,200 '66 Fastback GT350SR

90,200 '70 Boss 302 28,500 miles
85,800 '70 Mach 1 R-code 428 Super Cobra Jet
83,600 '70 Boss 302 W-code axle, red
82,500 '69 Boss 302 Restored
81,400 '69 Mach 1 428 Cobra Jet, restored
80,300 '69 Mach 1 R-code 428 Cobra Jet, restored
79,200 '70 Boss 302 Survivor
79,200 '69 Mach 1 R-code 428 Cobra Jet, restored
78,100 '69 Shelby GT350 42,900 miles
75,900 '68 Fastback Eleanor-like restomod
75,350 '66 Convertibles (2) George Barris Sonny & Cher customs
74,800 '70 Boss 302 Restored
71,500 '70 Boss 302 35,000 miles, survivor
69,300 '69 Mach 1 R-code 428 Cobra Jet
67,100 '69 Mach 1 428 Cobra Jet, 67,000 miles
67,100 '69 Mach 1 Q-code 428 Cobra Jet, restored
66,000 '66 Convertible K-code 289 High-Performance
66,000 '70 Boss 302 51,000 miles, restored
61,600 '67 Fastback GT350 recreation

60,500 '70 Mach 1 R-code 428 Cobra Jet
60,500 '71 Boss 351 11,300 miles, survivor
56,100 '70 Mach 1 R-code 428 Cobra Jet
55,000 '67 GT Fastback Mild restomod
55,000 '69 Mach 1 390, four-speed
55,000 '69 Fastback Drag car
48,400 '641/2 Convertible Restored, red
47,300 '68 Fastback Modified
46,200 '69 Fastback Boss 429 recreation
44,000 '70 Mach 1 351C, restored
44,000 '65 Fastback Mild restomod
42,000 '66 Convertible Pay It Forward, proceeds to charity
39,600 '65 Fastback Restored, black
39,600 '65 Fastback Mild restomod
38,500 '67 Fastback Mild restomod
38,500 '641/2 Convertible Restored
37,400 '65 GT Hardtop 6,200 miles, restored
31,900 '67 GT Hardtop 390, four-speed
29,700 '65 Convertible Restored
26,400 '641/2 Hardtop Indy Pace Car
23,650 '66 Convertible Restored
19,800 '68 Hardtop Mild restomod
17,600 '66 Hardtop Mild restomod
17,050 '66 Hardtop 51,000 miles
16,500 '66 Hardtop Bench seat
9,350 '92 GT Convertible
6,325 '86 SVO 67,000 miles
5,500 '92 5.0 Convertible 97,000 miles
*Prices include 10 percent commission