Price v. Value

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.

2 Responses to “Price v. Value”

  1. Collin says:

    For perpetuity, it must be mentioned that the ’64 335 referenced in this article has holes in the tail from a trapeze tailpiece, which is how it left the factory (though, of course it has the stoptail studs too).

    It’s simply not a direct comparison to true stoptail 335s. The holes are a very minor issue for most people, but they exist and that’s why it’s not selling for $30K.

    The market for a factory stoptail ’64 ES-335 TDC in truly mint condition is well over $30K (I know this from firsthand recent experience). The problem is that not many examples exist like this, and many dealers are shooting for the highest tier of pricing without factoring condition.

  2. Estelon says:

    Holes in the back-plane…so would any 50s-early 60s 3XX with a Bigsby. Everyone wants a 1958 Gibson something, whether an LP, a Byrdland an ES-5…whatever.

    As for “issues” all Gibsons have issues ! They were and remain mass-produced guitars !

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