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Bubble, Bubble…

A no issue 62-64 stop tail block neck was a $20,000 guitar not long ago. They surpassed $25,000 late last year and kept going. The best ones are surpassing $30K. This mint PAF 62 is priced at $35K (by me). It is the cleanest one I’ve ever had but I have to admit, the market is in the stratosphere.

In general, I don’t call out folks who price their guitars way out of what might be called a “reasonable” range. I’d be doing that day in and day out if I did. For as long as I’ve been a vintage dealer, there have been sellers who ask outrageous, off the wall prices for their guitars. And not just high end vintage guitars. I’ll concentrate on vintage ES guitars because that’s the market I know best. Bubbles are dangerous. They burst eventually and people who have bought during said bubble and the market itself are impacted. Prices go up as demand goes up and there is plenty of demand right now, so incremental increases make sense. The market steadily rose out of the ashes of 2008 and prices, while higher in early 2020, were still following that slow, steady path upward. Then the pandemic happened and folks started buying a lot more guitars. Why that occurred is open to interpretation (I’m not a psychologist). But I sell guitars and I sold a lot more in 2020 than I usually do. After some moderate but still reasonable price rise, the market went nuts.

I have to make a very important distinction here. Asking prices and selling prices are often very far apart. I know what I can get for any vintage 335/345/355 built between 1958 and 1965. Beyond that, I’ll defer to others. When I see a 1964 ES-335 (a very nice red one) listed by a reputable dealer for $47,500, it sets off some alarms. I sold perhaps a half dozen 64’s in the past 12 months. High price was $29,000 for a near mint red stop tail. I think the lack of inventory has kicked them up a bit from there. You have to think that if collector grade 1962-1964 block necks are approaching $30,000, then where does that put a clean 1959 ES-335? The 59 is the benchmark 335. As 59’s go, so goes the 335 market. Interestingly 59’s have been relatively flat for 6 or 7 years. The good ones sell in the low $40’s, the players in the mid to high 30’s and the mint or near mint ones might touch $45K. So, where are they now? Well, I can’t answer that because there aren’t any on the market. But if a block is pushing $30K (up around 25% from 2019), then a 59 dot neck should be over $50K and they probably would be if there were any out there to buy.

So, if we consider the current situation a bubble, what happens next? The bubble bursts. The problem is nobody can predict when. Not me. Not you. Here’s the scenario that seems more likely than most to me. The market is currently very thin. There aren’t a lot of good ES guitars out there for sale and those that are are priced (including the ones I have) are priced higher than they’ve been since the crash in ’08. Unfortunately, I’m paying record prices and that means you’ll have to pay them as well. I think that older long time collectors may see this as a selling opportunity and start putting guitars that have been out of circulation for years if not decades on the market-at record prices of course. I hear “my kids aren’t interested in old guitars” from collectors all the time. And also, the famous joke “My biggest fear is that after I die, my wife will sell my guitars for the price I told her I paid for them…” Do you wait for the market to calm down or do you anticipate higher prices? Do you “thin the herd” now or hold out? If the big collectors (who are not youngsters, in many cases) start selling their gems, the supply increases while the demand doesn’t. Prices drop back. No crash just a flattening out and perhaps a modest drop. But, again, when does this happen? I have no idea. I’ve been wrong plenty of times before, so take what I say with the knowledge that I am not an economist nor am I clairevoyant. Use your judgement. Do your homework. Buy what you love. That way, if you spend a little too much and the market drops, you’ll still have a guitar you want to keep.

Early ES-345’s have perhaps benefitted most from the most recent run up. Prices were running way behind same year 335’s for years and years. They still aren’t anywhere near catching the more desirable 335’s but they have tacked on a good 20% since the start of the pandemic. Early 59’s have reached $30K, if you can find one. 60 and 61’s are up over $20K and some sellers are pushing the asks up over $30K. Again, asking prices and selling prices can be very different.

4 Responses to “Bubble, Bubble…”

  1. RAB says:

    Charlie, good points as always especially “buy what you love”. The pain of the extra cash you may pay at the time will be far outweighed by the joy that fine guitar gives you over the years, or decades! And Classic Year ES models are still a relative good deal compared to original Sunburst Les Pauls and Custom colored Strats! Enjoy and play yer git-tars y’all! RAB

  2. Nelson Checkoway says:

    Charlie – very interesting indeed. Have you been able to ask your sellers, after you have closed a deal, why they decided to sell at this time? Not sure if that’s too awkward a question to ask, but the answers could be illuminating.

  3. Al Bettis says:

    Strats especially have gone up from 50-100%! I see you have a nice refin, all original otherwise, listed for what seems to be a fair ballpark in this inflated market, and I appreciate that. But even refins with only one out of three pickups original, often rewound or completely modern ‘replacements’’ or best case grey bottoms rather than black bottoms for pre 1965 are asking crazy prices. I mean I love grey bottom pickups but they are not period correct in a 1961 strat asking in the 20s or 30s. Strats in original player condition are listed in the 30s and 40s. Hope this bubble bursts before they cost more than most cars. It’s nuts. Maybe I’m just jealous because I sold my 64/66 strat for $2000 in 1993 which was a fair price at the time. I do have a nice player 345 that will now definitely stay in the family. Thanks for all your great posts and information and humor. It’s a breath of fresh air and great service to your fellow guitar geeks.

  4. RAB says:

    Nelson, I’ll weigh in if you don’t mind. Now in my late 60’s I increasingly get in the state of mind of “thinning the herd”, albeit my very small herd of guitars and amps! This especially pertains to instruments I don’t play very often. But then I’ll play said guitar or amp and it sounds so good I couldn’t bear cutting it loose. Or the instrument is so exceedingly rare (such as my ‘62 Epi Riviera; they only made 40 of them) that I’d stand little chance of finding another one. I don’t gig my ‘59 FR (First Rack) 345 much but it has the penultimate PAF sound (“Burst Killer!”) so it needs to be part of my tonal arsenal for recording sessions…in my case I can see selling off my stuff when I’m too arthritic to play guitar, hopefully got at least another 10 years left…RAB

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