The prices of Rolex and Patek Philippe watches slid to new two-year lows in October as demand in the secondary market declined. The Bloomberg Subdial Index, which looks at the pricing for the 50 most traded watches by value, fell 1.8% last month—to its lowest since 2021. In the last 24 months, the prices have dropped about 18%, according to the index.

“We are seeing growing downward pressure in the market, which could lead to a further downward drift in prices as dealers cut valuations to chase sales,” said Christy Davis, the co-founder of London-based Subdial, a watch trading platform that tracks their prices, according to Bloomberg. As a result, the average number of days to sell pre-owned watches has shot up by 8% since August, the watch group said.

The luxury lull

This follows as some of the world’s largest luxury conglomerates have also noted a correction in demand compared to the COVID-19-fueled boost in consumer spending. LVMH, which owns brands like Louis Vuitton and Christian Dior, saw its sales grow at a softer pace of 9% in the third quarter compared to the previous quarter—at 17%.

As a bellwether of the luxury industry, LVMH’s lackluster earnings set the tone for some of its competitors, including Gucci owner Kering. That company’s chief, François-Henri Pinault, said macroeconomic volatility and slower demand were among the factors impacting the company’s 9% drop in third-quarter revenues.

The extent of the slowdown was further amplified as sales of Richemont, the owner of luxury jewelry and watch brand Cartier, missed analyst expectations.

“The period under review started strongly, beyond our expectations. However, growth eased in the second quarter as inflationary pressure, slowing economic growth and geopolitical tensions began to affect customer sentiment,” Richemont’s chairman Johann Rupert said in a statement last week.

From boom to bust of the secondary watch market

The plunging price tags in secondhand luxury watches marks a sharp reversal of the pandemic heyday, when the likes of Rolex and Audemars Piguet saw demand outstripping supply. Appetite for the pre-owned versions of the watches sent their prices soaring through early 2022, led by sales to millennials and Gen-Z customers who were comfortable buying pre-owned items online.

At the time, people confined to their homes and flush with savings turned to luxury spending, helping high-end watch, bag and apparel-makers in the process. Platforms like Subdial, Chrono24 and Watchfinder made access to the watch market easier, while the hype around pre-owned watches helped prop up demand—sometimes even more than their firsthand counterparts. In a Deloitte report from October 2022, the consulting firm forecasted that the pre-owned luxury watch segment would soar 75% by 2030.

But a downturn in the stock markets and cryptocurrencies, coupled with economic pressures such as high interest rates, began to hurt the watch market a year ago. Since a high in the secondary watch market last April, prices have dipped by a whopping 42%, Bloomberg reported. During the same period, Rolex and Patek prices have fallen 27% and 47%, respectively.

Despite the trend in pricing over the last year, luxury watches have proven to be a time-tested store of value. Second-hand watches were “in demand as alternate investments,” a Boston Consulting Group report in March noted, and part of the reason for that it because their value is generally expected to rise over time.

“Although prices declined during 2022, echoing declining stock market and cryptocurrency exchanges, watches have performed well relative to stocks,” the report said. “Luxury watch prices also outperformed the S&P during the 2007–2009 recession and took less than two years to recover from the 2008 market crash, while many traditional financial categories and consumer products categories took longer.”

So, while it may be looking like a slump for now in the world of pre-owned watches, it could only be a matter of time before things look up again.