April 29, 2007

Editors: Tom Watson    
Rick Landers    

April 29, 2007

The Vintage Guitar Market: A Chill in the Air?

by Dan Yablonka.

I went to the Dallas Guitar Show with long time friend and guitar historian's historian, Steve Soest, and really got a treat. There I was in a room full of all of the guitars that we think about, play, and moan about because we used to have one and sold it for $465 in 1977; a room full of the guys that have been in the business from its inception.

What I love about this business, or should I say way of life since the most of us suffer from GAS (guitar acquisition syndrome), is that when we all get in the same room, no one is there to cut the other guy’s throat. We work our butts off all year long and go to these shows where we definitely compete for the prizes available (buyers), whether they walk through the door or dealer-to-dealer scores, but, at the end of the day, we all pile into each other's hotel rooms or the most popular steak house by quality or tradition and swap stories, hugs, and beers. There are a lot of pals in those rooms despite human nature's ability to make us feel like competitors and we are very happy to see each other, yet by the end of the weekend we are so tired that we can't wait to go home. It's huge fun and it's huge work at the same time. It's a love hate thing. If you're married, you'll get my point.

Dan Yablonka

    In the last four or five years we have seen the prices of some iconic guitars quadruple in price. Between the early 2000s and now we have seen ‘50s Stratocasters go from $15,000 to $60,000 and higher, with some breaking the six figure mark. Bursts (‘58-‘60 Les Paul Standards) have, in many cases, come close to the half million dollar mark for a flamed monster with "all whites" (highly sought unbleached white coil/bobbin PAFs), and certainly a good original Burst with even a relatively plain top will bring a quarter of a million. Never in 30-plus years did we see such huge price leaps. After a while, it became obvious to me that we were bound for a cooling off period and, although some might disagree, we may now be seeing some price settling. In fact, I'm am not going to sugar coat it: I see more and more settling every day.


Picture (left) Dan Yablonka with vintage Gibsons

What four years ago was a 95% original collectible has now become a "player's piece" A ‘50s or even ‘70s Stratocaster, or Les Paul for that matter, becomes a player now if it's had a potentiometer or two changed or a refret. Even if you put the pots back in, if the solder joints are broken from virgin, although the guitar is put back to stock that will also affect the price by a good margin, and, even more disturbing, take it off of the "play list" for many buyers. It seems that dealers and their suppliers are being led by the public even when we know that the public’s reasoning is simply spawned by the lure of the almighty dollar coupled with a lack of knowledge and experience. Dealers don't want to get stuck with a guitar they can’t sell to their customers, which leads to the main point of what’s behind the cause and effect of what seems to be taking place in the marketplace.

The wealthy individuals who are buying the creme de la creme are driving the market despite the opinions of those with more knowledge, track record, and experience. I get more and more callers wanting to know if "this is a good investment" and less and less asking if this is a great guitar. This has had a widespread affect on the vintage guitar market, reaching areas of the market beyond the price of pristine pieces. For example, the disparaging price gap between a player's guitar and the collector's guitar is getting even larger. It used to be that you could take the price of a pre-CBS Stratocaster and divide it in half and you'd know what to pay for a refinished one with all original parts. Not so anymore. Though buyers have now paid as much as $100,000 for a clean ‘54 Strat, I don't know a single person that would consider spending $50,000 for a refin. That's fine, but what is a shame to me, reconnecting this to my earlier point that a couple of replaced potentiometers now make a guitar a player's piece, is that the mania for pristine condition of the new top dollar buyers is affecting the pricing of guitars and eras those buyers aren’t even interested in.

Add to this the possibility that some of the high-end buyers who came into the vintage guitar market primarily as investors as opposed to collectors may have started to realize that they are the end of the food chain and, though they may not have huge issues with money, don't want to be caught with a bad investment (who does) if the market softens. Put it all in a hat, mix it up, and try to see the eventual affect. It is my opinion, and I am not alone, that we will, and in some cases already are, see some of the icons that were $50,000 to $70,000 in the blue books, guides, and on websites start to sell for less. The Dallas Guitar Festival floor was filled with ‘50s Les Paul Goldtops and two-tone Strats that were recently $50,000 and $60,000 dollars available between the high 30s through high 40s that failed to sell.

In a way it makes me a little weary but on the other hand, truth be told, I'd so much rather pay less and sell to my customers for less again. When people saw guitars like a rosewood board ‘60s pre-CBS Strat go from 9 to 15 to $24K all in a year and a half, many who swore they'd never sell theirs decide to do just that and pay off that last leg of the mortgage. Now, the stores and dealers are "lousy" with ‘65 Strats. Last year, if you found one it was gone in a week. Now, they're back and available at just over 20k. It can be a drag for the buyer who just paid $24K, but it also means that some people might actually be able to take some time to put together a nest egg and buy one while the market catches its breath.

But, whether you’ve owned a great vintage guitar or collection for years or recently paid top dollar, take heart. A stall in the market won't mean a thing over 20 years, so, the bottom line is, happy hunting to all. In a sense, there’s good news all the way around. In the short term you may be able to do better buying, and over the long haul we're sitting on Americana at it's best. There will never be another 1959.

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