Archive for June, 2023

Price v. Value

Friday, June 30th, 2023

What’s the ever popular red stop tail ES-335 worth these days? Less than most sellers are asking or so it seems because a lot of them are sitting unsold after months including one of mine.

Every few years, the market gets ahead of itself and folks start asking prices that seem way too high. It usually happens after a sustained run up in prices that has reached its peak. The market for vintage guitars went a little nuts during the pandemic. The breathtaking rise in prices mirrored, in many ways, the guitar market in 2006-2007. It also mimicked the stock market during the internet bubble in the late 90’s. Everybody was happy that they had made lots of money on their portfolios and kept buying hoping the market would continue to rise. And it did. Until it didn’t. The differences between stocks and vintage guitars are huge but the difference that makes all the difference is the size of the market. When folks start selling their stocks, there is nothing an individual can do about it. The market is too big for that to happen. When vintage guitar owners see their “portfolios” rise by double digits in a year, a couple of things happen. One of those things is they think about selling. They assume the market will continue its rise and put their guitar on Reverb or esewhere for an unprecedented price. And folks will pay it. Until they don’t.

That where we are right now. The big rise that occurred from 2019 until 2021 looks to be over for now. Your guitars are worth more than ever but the market isn’t rising. The good news is that is isn’t dropping either. Higher interest rates have cooled the housing market. The stock market is a little wobbly with all the talk of recession. But the guitar market doesn’t seem to respond to interest rates and it seems somewhat immune to the current economic woes. In fact, fear of a recession has been feeding this guitar market. The question comes up in serious conversations about this economy. Where do you put your money? Not cash-inflation makes that kind of dumb. Not real estate with interest rates as high as they are. T-Bills? Well, at 5%, it’s not a bad idea if you’re happy making 5% on your capital. Guitars ran up more than 10% a year for almost three years. That’s a great rate of return but I think it’s over.

When I talk to players and collectors about the current market, they all complain about the high prices unless they are selling. Then they talk about how this guitar sold for this and that guitar is listed at that. New inventory is down but old inventory is sitting unsold because the asking prices simply aren’t realistic. You want examples? I listed a very clean red stop tail 64 ES-335 at a price that reflects the average asking price for a 64-$30,000. That’s nearly 30% higher than it would have been in 2019. It hasn’t sold after 4 months. I listed a rather beat up 58 ES-355 with some issues a few days ago for $29,900. It sold in a half hour with two backup buyers. I’m supposed to be the expert but buyers were writing to me telling me it was massively underpriced. It wasn’t. It was priced right. I’ll explain.

In a busy market, a properly priced guitar should sell quickly. Especially a guitar that is a popular model. There are few guitars more popular than a red 64 ES-335 but that one is sitting. There are few guitars more desirable than a 59 blonde ES-335 but the one I have has been on the market for a year. But that makes some sense because that’s a tiny market-most folks don’t want to spend $100K+ for a guitar. So, how do I explain a 58 mono 355 selling in a half hour? The market for that guitar is pretty small too. Simple, it was well priced. I try to price my guitars sensibly and I’m never in a big hurry to sell so I will let a guitar sit on the market for a long time if the market for it is a small one. But a red 64 335 that hasn’t sold in four months must be overpriced. And I guess it is.

Everybody says the value of any guitar is what someone will pay for it. I agree with that assessment. So, if your guitar is sitting on the market for months (and it isn’t an unpopular model or a model with a tiny market), then it’s likely overpriced. I know this because my guitars are mostly still selling well. I guess $30K for a 64 with some minor issues is too much (and I just lowered it). I could have let it sit and hope the market rises some more or wait for someone who has to have one right away but that’s a fool’s errand. That guy is out there but that segment of the market (guitar buyers with more money than they know what to do with) is even smaller.

I’d rather be a smart buyer than a smart seller. If you buy smart, you will be able to sell smart. If you don’t buy smart, it will be harder to sell smart.

This rare 58 ES-355 (also with some issues) sold recently for under $30K. What happens when a smart buyer meets a smart seller? A sale, that’s what happens.

Act Two

Thursday, June 15th, 2023

It certainly makes sense to write about the Gibson made semi hollows like the Sheraton and Riviera but also the solid body Epi/Gibsons like the Crestwood, Wilshire and Coronet. Not only because I really like them but they are great, under appreciated guitars as well.

First, I’m moved by the comments from all of you. It’s very gratifying to know that you aren’t just reading my posts but you’re also paying attention. The premise of the last post was to get an idea of what you think might make sense for me to write about now that I seem to have exhausted most of the topics related to 58 to 64 ES guitars. There were a number of folks who thought I should cover Strats and Telecasters. Others thought Les Pauls should be next. Still others like the idea of SG’s. Amps got a few nods as well. The obvious follow up is, of course, later ES guitars. Each “act two” has its merits but I think I need to narrow down the choices.

The reason I know so much about ES guitars is because that’s what I sell. Therefore that’s what I see. I don’t sell that many Strats and Teles and I don’t consider myself an expert. I also don’t play Strats and Teles very often so my opinions about tone might be a little skewed. So, I think we’ll eliminate writing about Fenders and besides, there are plenty of folks writing about them already. Newer ES guitars make a lot of sense but that topic has its problems too. Certainly 65-68’s are worth writing about but Norlins? I’d have a lot of bad things to say and where’s the joy in that? We could skip the 70’s and jump to the early 80’s ES guitars. I’ve written a fair amount about 81 to 85-the last gasp of a dying Norlin that turned out some really good guitars but I don’t think I’ll get anywhere near the thirteen years I got out of 1958 through 1964. The Henry Juskiewicz era at Gibson (1986-2018) is interesting but for me to write about them, I have to have them in hand and I can’t see starting to sell 90’s and later Gibsons just so I can write intelligently about them.

That leaves me some really good options though. I will continue to write about 58 to 64 ES guitars especially when an unusual one turns up. I think posts about Gibson era Epiphones are definitely worth doing. These guitars are vastly underrated, undervalued and underappreciated. They deserve some attention so, I’ll do some posts about them. I also think that writing about vintage Les Pauls-especially as they relate to 3×5’s makes some sense. For example, I might buy a 59 burst and write about how it’s authenticated and how provenance is such a big part of that market. I can certainly make comparisons between the Les Pauls I get and certain ES guitars (is a first rack 345 really a “burst killer”?). I’ve been doing a fair amount of business in 57-60 Les Pauls lately and I’m getting comfortable with the idea of writing about them but probably not Jr’s and Special’s-at least not yet.

Finally, I had a suggestion about writing about the best amps to use with ES guitars. Great idea but I’d have to try out an awful lot of amps to come up with a credible opinion about it. I do think I have the knowledge and experience to write about Fender tweed amps. I buy and sell plenty of them. I play them every day and I am nearly as passionate about them as I am about ES guitars. The problem is that so much of amp knowledge is technical and I barely know a resistor from a transistor from a big sister. I can address tone but I can’t tell you why it’s buzzing or “motorboating” whatever that is.

So, expect posts about 335’s to continue when I have something to write about. There will be posts about Les Pauls if I get an interesting one. I’ll discuss Sheratons, Rivieras, Casinos, Crestwoods, Wilshires and Coronets built from 59 until 68. If I get an interesting SG, I’ll write about that and a series on narrow panel Fender tweeds will be fun to write. That ought to keep me busy for at least a year at two to three posts a month.

Everybody seems to write about Les Pauls but I think that you might get a different perspective from me. I am buying and selling bursts but most of the transactions are private and you never get to see them. I let you in on some of the interesting inside stuff that you don’t generally read about. This 58 sold recently and was owned by a few rock stars.