MEGA AUCTION REPORT: Volume Increases in 2019 Florida Auctions

Our Mega Auction Report is back and more robust than ever.

That’s right. We’ve got more insights than ever before from the record breaking 2019 Florida auctions.

What’s new:

  • YoY age comparisons for top subtypes vs. annual average for top subtypes
  • YoY price comparisons for top subtypes vs. annual average for top subtypes
  • Average percent change from estimated FLV for top equipment types
  • Average price per lot, by equipment category
  • Average price per model year with volume bar, for top subtypes
  • And more!

Key Takeaways:
In the 2019 Florida auctions, overall volume increased with newer machines being sold. Market share of the most popular equipment types showed a steady decline, indicating more diversity and volume was distributed better across different equipment types. This means the auction is becoming a more reliable source for buy and sell. It offers a wide range of price, age, usage, condition, and overall equipment types, giving both buyers and sellers more power. The annual Florida auction has grown in volume over years, making it the perfect place to build or dispose of elements of a fleet quickly.

 

The Analysis:
During February 2019, The EquipmentWatch analyst team tracked a total of $344,104,791 in sales, representing 10,821 sales transactions from 164 auction participants. This includes heavy construction equipment, lift and access equipment, agricultural equipment, and heavy commercial trucks. Compared to February of 2018, the total number of transactions increased by 25% and total sales increased by 12%. February 2019 brought us new equipment and more models, showing a consistent, strong trend in the auction market. Ritchie Brothers, the largest industrial auctioneer in the world, reported that the company hosted its largest auction ever in Florida, with the total proceeds up by 7% from last year’s previous record-setting auction.


Top 10 equipment types made up 32% of the total sales transactions, down 27% from last year and showing that there was a greater diversity of equipment types.


EquipmentWatch tracked the 10 heavy equipment types that were most commonly sold at auction during February 2019. The most popular equipment type was the crawler mounted hydraulic excavator, followed by 4-wd articulated wheel loaders and Lgp crawler dozers. Crawler mounted hydraulic excavators took the first place, marking the 4th time it was the most popular. 4-wd articulated wheel loaders took the second-place spot, followed by Lgp crawler dozers, which only ranked at ninth place last year. Overall, market share of the top 10 equipment types declined by 27% from 2018, presenting a growing volume of equipment types outside of the top 10 . This indicates increasing variety and options in the auction channel.


This graph shows the year over year volume comparison from February 2018 to February 2019 for the five most commonly sold construction and lift/access equipment types.


The total volume of auctioned assets in these five types increased by 26% from 2018 levels. Electric self-propelled scissor lifts had the highest increase of 52%, closely followed by Lgp crawler dozers with a jump of 49%. Telescoping boom rough terrain lift trucks had a 28% increase, and crawler mounted hydraulic excavators increased by 17%. This left 4-wd articulated wheel loaders with the lowest increase of 14%.

TThis graph shows the year over year average age comparison from February 2018 to February 2019 for the five most commonly sold construction and lift/access equipment types.


The average age of auctioned equipment declined by 0.6 years, showing a consistent decline for the third year in a row. This is a positive trend for the auction channel as it shows new equipment being brought to sell each year. Looking at the chart above, the equipment type with the highest decline in average age was the crawler mounted hydraulic excavators, dropping approximately 10%. All other equipment types showed a steady decline in average age except for telescoping boom rough terrain lift trucks; with a mere 1% increase from 2018 levels, these lift trucks were essentially unchanged from last year.

This graph shows the year over year average age comparison from all 2018 to February 2019 for the five most commonly sold construction and lift/access equipment types.


Readers familiar with auction channel activity on the construction channel know that the February mega-auctions exhibit different dynamics than the standard regional auctions which take place throughout the year. When EquipmentWatch compared the 2019 mega auction results to the results of all auctions across 2018, the trends were similar. Average age compared to all 2018 average prices also showed decreasing trends. Although the analysis showed the same downward trend, the decline was much steeper when compared against the entire year. Aggregate average age decreased by 1.7 years and all equipment types, other than electric self-propelled scissor lifts, declined by degrees ranging from 8% to 28%. In summary, the average age decline from all 2018 auction data indicated that the auction market improved in terms of equipment age, usage, condition and price. With new equipment entering the market, prices will rise due to lower utilization and better conditions.

This graph shows the year over year average price comparison from February 2018 to February 2019 for the five most commonly sold construction and lift/access equipment types.


Average hammer prices across the board decreased by 8% compared to February 2018. The majority of equipment types demonstrated a steady trend of overall decline, with the exception of crawler mounted hydraulic excavators, which increased approximately 14%. The most noticeable change was observed on the electric self-propelled scissor lifts with a 47% decline. This is a significant fluctuation compared to the other equipment types, where declines were contained in a small range from 3% to 7%.

This graph shows the year over year average price comparison from all 2018 to February 2019 for the five most commonly sold construction and lift/access equipment types.


Looking at the above chart, average hammer price comparisons between all auctions held in 2018 against February 2019 shows different trend from the like-time February 2018 to February 2019 comparison. All equipment types experienced a price increase, with the most noticeable change on crawler mounted hydraulic excavators (36% increase). This likely has to do with newer age equipment entering the market with lower utilization and components in better condition. This comparison is an interesting example of the limitations of classical supply and demand in the auction channel. An increase in volume of equipment brought to auction does not always indicate lower prices, due to the unique dynamics of auction markets. In February 2019, the mega auctions demonstrated the opposite. All in all, this is another positive sign that the auction channel is getting healthier year over year.

This graph shows the percentage difference between estimated FLV and average price in February 2019 for the five most commonly sold construction and lift/access equipment types.


Analysis of auction results should always compare final hammer prices to estimated FLV (Forced Liquidation Value) as a way of understanding the unique elements of an auction sale experience. Negative differences indicate that final prices were lower than expected FLV would have predicted, while positive percentages indicate that final prices were higher than FLV estimates predicted. Looking at the above chart, the average difference between estimated FLV and average final price did not exceed -14%. For electric self-propelled scissor lifts, we saw only a 0.4% difference in values, which was right on point. This analysis takes into consideration and holds constant all the factors that could significantly impact price such as make, model, year, condition, usage, and options; therefore, it is only giving readers an idea of how EquipmentWatch’s estimated FLV compares to actual average price in auction market.

This graph shows the average price per lot for the five most commonly sold construction and lift/access equipment categories.

Taking a step back from in-depth value analysis, the above chart shows more of the “30,000 foot view” of average prices by illustrating the average price for the five most commonly sold equipment categories. This average was calculated by dividing the total sum of prices per category by the number of lots containing that equipment category. The average excavator lot sold for just over $77,000, while the average Wheel Loader lot sold for $57,000. Useful as a very light benchmark, this analysis does not account for different factors that could affect prices, such as make, model, year, utilization, condition, or others.

This graph shows the average price per model year with volume bar for the five most commonly sold construction and lift/access equipment types.


The above graph shows the average price on the left side of the vertical axis and volume on the right side by model year for February 2019 auction data. As you can see, average prices moved in tandem with the model year, showing newer equipment sold for higher prices. This is generally normal, as age and usage are the top factors in valuing equipment. However, volume does not show the same trend as the average price. A basic linear trendline would appear similar to the pricing trend, but we observed significant volume spikes in 2006 and 2013 as well as a dip in 2009 model year assets, demonstrating a similar bimodal distribution to the trends observed year-round and on the resale channel. Peaks in the volume distribution tend to reflect economic life-cycling. Our research has previously shown that assets within the first peak (0-7 years old) are typically at the end of a lease plan or a long stint in a rental fleet. Assets within the second peak (7 – 14 years old) are typically at the end of their second economic life after stints with heavy civil projects. Although it varies by equipment type, the overall aggregate trends held true in the February 2019 mega auctions.

Schedule a demo today to learn more about our values and market data.