Total Collapse Of The Archtop Market (above $900 models)

[Archie]

Being a collector and dealer last year was a blast.

This year, with the collapse of the Euro against Sterling and the rise of the Dollar, the UK seems to be in a bad way. What used to be a good deal for Mainland Europeans, is now looking expensive because of Sterling and the Dollar is still too far apart, for Americans to find UK guitars cheap, which comparatively they are.

I see early 70's blonde Johnny Smiths going for £2250
Orignal Es-125 CC from the 30's in good condition not even getting a sniff @ £1,800
I go to auctions, where L5's are selling for £3,000 or less (yet a 80's AA sold for £4,000 totally bizarre)


I dont even consider myself a dealer anymore because I haven't really 'dealt'. Sold off my remaining stock (one more Archtop to go, the Guild X700 sold yesterday).

I know that the UK is in a particularly harsh place but I wonder if the US market is also contracting badly? Would love to hear from guys in Europe (mainland) and the US about their thoughts on the current market.

My opinion is that this is a financial problem and not that people are going off archtops but could it be a double whammy? Could archtops be in decline matched with an unsettled market?

Looking at this also presents opportunities, as a cash ready buyer with a reasonable fund, I'm in a prime position to snap up all these deals (providing the guitars a top notch) and usually I take advantage of down periods, however this time I'm not confident that there could be an Up for some time, which is making me hold off.

Is this the new standard for the next few years?

[goldenwave77]

Well....fine archtops are hardly a necessity. They're more like the ultimate discretionary purchase.

As such, when times are good, and people are flush, prices get bid way up...and when times are tough, they go the other way. As a non-income producing asset, their "value" is subject to a lot of fluctuation.

I have 2 rough and ready indicators for the general state of the economy: How long do I have to drive around to find a parking spot when I go out shopping? What is the general state of the guitar market?

I think the U.S. is most of the way through working off its last round of financial excess, so I think the U.S. market looks steady to upward trending for the next few years. (I wouldn't be a buyer, in other words. I buy for use, not to flip, and resell.)

The next great boom will be in biotech stocks as aging baby boomers make their last stab at eternal coolness, and youth. When that crashes and burns, then it will be time to be buying guitars.

[Archie]

Well....fine archtops are hardly a necessity. They're more like the ultimate discretionary purchase.

As such, when times are good, and people are flush, prices get bid way up...and when times are tough, they go the other way. As a non-income producing asset, their "value" is subject to a lot of fluctuation.

I have 2 rough and ready indicators for the general state of the economy: How long do I have to drive around to find a parking spot when I go out shopping? What is the general state of the guitar market?

I think the U.S. is most of the way through working off its last round of financial excess, so I think the U.S. market looks steady to upward trending for the next few years. (I wouldn't be a buyer, in other words. I buy for use, not to flip, and resell.)

The next great boom will be in biotech stocks as aging baby boomers make their last stab at eternal coolness, and youth. When that crashes and burns, then it will be time to be buying guitars.

I like your indicators. I had a long 5 hour chat with a member on Skype (from the US) and he said that he used the guitar market as a budgie in the coal mine, as I see you do. I too look at it to indicate the amount of happy cash floating about. Happy cash obviously being spending money.

In regards to the UK predicament its a contraction from not only all sides but from the centre too, its a bad mess and I dont KNOW of feel like I know when that will reverse. The UK economy is still on its knees and possibly heading for another crash in a couple of years.

Not like it used to be, buying just after Xmas etc, you know the periods when people have over spent or hoarding money which changed about 2 months later.

What makes it worse is that the market picked up over the last few years and has no gone dead again. THAT doesn't make as much a sense as it should (or I'm not able to read it). All economies are better off than in 2009, yet it seems people were happier to spend then, when they shouldn't have had any money or at least be concerned about the future economic outlook. Why is it in a rising economic situation from 2009 in 2015 are we crashing? (god I cant believe 2009 was 6 years ago).

I kind of have some of the answers but not enough of a picture to work out whats happing, even with mid range models. This is far more than just the vintage collectors market crashing, this seems to be on all levels except guitars under $1,000.

[Greentone]

I think there are three or four things going on, here. One is the bad European economy (largely due to the "austerity" movement--i.e., trimming debt at a time when the economy is sluggish. This is what US president Herbert Hoover and his Congress did in the late-20s. Almost _all_ economists have repudiated this policy...but it has no traction with politicians. A second phenomenon is the collapse of the Euro/Pound Sterling against the dollar. A third phenomenon is the dearth of young people coming along who are interested in learning to play music. A fourth is the movement into assisted living facilities of the Baby Boomers--the last real group to truly embrace the archtop guitar in any meaningful way.

Archtop dealers _could_ (not necessarily, but could) be in for a negative trend that lasts years.

Thus, sellers become buyers...or, at least, holders.

[Archie]

I think there are three or four things going on, here. One is the bad European economy (largely due to the "austerity" movement--i.e., trimming debt at a time when the economy is sluggish. This is what US president Herbert Hoover and his Congress did in the late-20s. Almost _all_ economists have repudiated this policy...but it has no traction with politicians. A second phenomenon is the collapse of the Euro/Pound Sterling against the dollar. A third phenomenon is the dearth of young people coming along who are interested in learning to play music. A fourth is the movement into assisted living facilities of the Baby Boomers--the last real group to truly embrace the archtop guitar in any meaningful way.

Archtop dealers _could_ (not necessarily, but could) be in for a negative trend that lasts years.

Thus, sellers become buyers...or, at least, holders.

Everything you said makes sense and matches up. I agree with your last line completely.

[nopedals]

I just looked at completed auctions for ES-175s (ones with actual bids). Did not take the time to read descriptions. Garden variety 80s-90s ones are going for 2000-2500; that does not suggest a collapse in prices to me.

[Dutchbopper]

The market for high end archtops is completely stagnant over here. I see the same guitars for sale for many months. Some over a year. And it's not only the archtops. I tried to sell my old Strat and have had no luck yet. My guess is that anything over 1 k is hard to sell. Anything over 2-3k next to impossible.

Just saw an ad for a normally priced Gibson Tal Farlow that was posted over a year ago.

DB

[jorgemg1984]

I think there are three or four things going on, here. One is the bad European economy (largely due to the "austerity" movement--i.e., trimming debt at a time when the economy is sluggish. This is what US president Herbert Hoover and his Congress did in the late-20s. Almost _all_ economists have repudiated this policy...but it has no traction with politicians. A second phenomenon is the collapse of the Euro/Pound Sterling against the dollar. A third phenomenon is the dearth of young people coming along who are interested in learning to play music. A fourth is the movement into assisted living facilities of the Baby Boomers--the last real group to truly embrace the archtop guitar in any meaningful way.

Archtop dealers _could_ (not necessarily, but could) be in for a negative trend that lasts years.

Thus, sellers become buyers...or, at least, holders.

Eurostat - Tables, Graphs and Maps Interface (TGM) table

No one is trimming debt, public debt is (still) growing on Europe. although much slowly than before. Even among countries under intervention only Ireland will lower it's debt this year (and this year only). Europe's economy was already sluggish before austerity (and it will remain to be if nothing changes). A lot of economists (back then and now) do not repudiate such policies.

Here in Portugal the gear market has a strong correlation with the economy. It's one of the first places people cut - for most is a hobby and most pros have too much gear so they can cut shopping. Archtops are very hard to move... not only jazz players are a minority but also a lot of the new jazz players use teles and 335s which has a very strong impact on that market.

Traffic here is also a good indicator of the economy's state.

[oldane]

I have 2 rough and ready indicators for the general state of the economy: How long do I have to drive around to find a parking spot when I go out shopping? What is the general state of the guitar market.

The market state is reflected in many ways. My wife and I like to go to Andalucia once a year, rent a car and drive around for a week or so, staying at Parador hotels around in the region. For many years one had to book many months in advance to get a room at the Parador in Malaga or in Granada. Not so in the last couple of years.

[campusfive]

I can't speak to Europe, but the dealer who sold me my '37 ES-150 told me that he had sold more vintage archtops in the last year or two than he could remember. Point of fact, when he got in yet another ES-150, a '39, I arranged for a friend in DC to buy it from him.

We have a place here in Los Angeles, Imperial Vintage Guitars, which tends to price stuff reasonably and will list stuff on ebay besides having it for sale in the shop. A lot of times stuff sells before I can find the time to make the drive over. But of course, the dealer asking for $16.5k on that '32 L-5 - we'll that's been there for quite a while.

[Klatu]

trimming debt at a time when the economy is sluggish. This is what US president Herbert Hoover and his Congress did in the late-20s. Almost _all_ economists have repudiated this policy...but it has no traction with politicians.

Where can I go to read more about this. I'm an avid student of history and am quite interested in the collapse of the market in 1929 but haven't read much on Hoover's debt reduction.

When I think of this period, I think of the Smoot Hawley Tariff, the increase in corporate taxes, the consolidation of Progressive Era bureaucratic reforms, and the 2 cent bank check tax.

[Franz 1997]

I just looked at completed auctions for ES-175s (ones with actual bids). Did not take the time to read descriptions. Garden variety 80s-90s ones are going for 2000-2500; that does not suggest a collapse in prices to me.

I'd say the same here in the UK. Standard 80s-90s 175s are selling quickly at around £2k. The same models, from the 60s and 70s and marketed as vintage items in the £3-£4K bracket stick around a lot longer.

I think it's important, when you're looking at guitar 'indicators', to distinguish between Johnny Smiths, 125 CCs and maybe even L5s, on the one hand, and standard 'working guitars' like 175s and 335s. The former are pretty specialised items; it's difficult to gig with a Gibson JS because of feedback, which will have an impact on its general marketability.

I'd prefer a 175 as an indicator, with both collector and working player appeal.

All that said, some interesting observations above. As a broad generalisation, the apparent lack of demand from younger consumers will be a big dynamic in changing this particular market everywhere. I've been doing a little buying and selling of arch tops over the last 2 decades, for my own use, and I'd say things in the UK peaked at least 10 years ago, perhaps longer.

[Bebop Tom]

If sellers would price vintage archtops based on current market demand vs what they used to sell for, I for one would be a buyer.

[vinlander]

...
Just saw an ad for a normally priced Gibson Tal Farlow that was posted over a year ago.

DB

IMHO Tals are almost in a market of their own, being CS the RI are under valued for the most part compared to an ES 175 for instance. Like for the Heritage headstock, the scroll and pickguard seem a deal breaker for many people; it could explain why it might stall on the market despite their fewer numbers and their closet queen state.
However the last 2 ones advertised here on JG lasted hardly a week...

[Bluedawg]

There may be a smaller number of younger players coming into the guitar market pipeline ..... that could be an increasing issue in the used guitar market


If the statistics being bandied about in the press are anywhere near accurate the younger generation, both in North America and in Europe, has been hit particularly hard by the recent economic problems ...

The stats on the numbers of under 30 people moving back in with their parents is staggering

Many of those young ones who would be active in the guitar market if the had the cash are having trouble making enough to pay rent

[rpguitar]

...the apparent lack of demand from younger consumers will be a big dynamic in changing this particular market everywhere.

This is my exact concern. I constantly wonder when I should divest of my "extraneous" fancy archtops. I like keeping them as long as I can afford to, with the promise of eventually recouping decent money for them (if not equal to my exact investment). In fact I continually think of Top 5 and Top 10 lists of the guitars I feel are my lifetime keepers. That is, assuming I have finalized the candidates by now. Which I'm never entirely sure of...

I think the pedigreed vintage guitars of some rarity will never lose value in the long term. But the in-between ones, the 70s, 80s, even 60s to some degree, and eventually - with time - the 90s; those are most susceptible to value loss. If you buy those now, make sure you're paying a fair price.

[jasaco]

I had a long 5 hour chat with a member on Skype

Man, I don't even know enough words for a 5 hour conversation. You must've had to use some words more than once, right?

[jzucker]

It's not just archtops. Guitars in general. Just go over to thegearpage.net and read some of the grumblings over there. In general, Millennials don't care about vacuum tubes, vintage tones and expensive vintage guitars. There's just not much frame of reference and for that matter, guitar in today's music. Until the next SRV comes along and makes guitar relevant in pop music again, i'm afraid the entire guitar market will continue to unwind...

[travisty]

If I put my fund manager/strategist hat on, I would say a couple of things...

ATH, you are in the wrong currency bucket right now (USD and GBP near 10yr highs, euro near 10yr lows) with the wrong marginal wealth dynamics (EMEA+UK real estate prices aren't falling in the mid-market but volumes are).

Longer-term, global over-capacity in any number of areas creates significant problems. The single best thing which could happen to the world right now (and over the next 20-40yrs) is that Japanese, Europeans, and Chinese couples gradually start making more babies.

[jasaco]

Oh, great. So I moved from one arcane instrument (pedal steel) to another (archtop jazz guitar). What's wrong with me? I should have gotten out years ago, and now it's too late...

[Archie]

I just looked at completed auctions for ES-175s (ones with actual bids). Did not take the time to read descriptions. Garden variety 80s-90s ones are going for 2000-2500; that does not suggest a collapse in prices to me.

Actually the average price is about £1500 for Es-175's in the UK and has been for about the last 2 years. I have seen one or two sell for £2000 in the last couple years. There is one right now for £1999 that I nearly bought for £1300. Probably will end up doing just that. More like £1400

If you bought an ES-175 on ebay UK for £2000 you were pretty desperate ;-) (obviously not you personally)

[Archie]

If I put my fund manager/strategist hat on, I would say a couple of things...

ATH, you are in the wrong currency bucket right now (USD and GBP near 10yr highs, euro near 10yr lows) with the wrong marginal wealth dynamics (EMEA+UK real estate prices aren't falling in the mid-market but volumes are).

Longer-term, global over-capacity in any number of areas creates significant problems. The single best thing which could happen to the world right now (and over the next 20-40yrs) is that Japanese, Europeans, and Chinese couples gradually start making more babies.

Glad you commented T, obviously knowing your background I thought you could put this in more analytical speech.

Not sure I understood the first bit. The Euro is at an all time low against sterling, hence why the Mainland market has packed up since the first quarter. The dollar is high against the £ but not enough to make any significant savings for them. Hence why I said the UK seems to be in a special situation.
You could of course argue that it allows UK buyers to effectively empty the mainland market but the mainland has always been unrealistically high compared to UK prices anyway, so even with the fall in the Euro, their guitars still aren't worth importing for the most part.

I mean come on, I bought an L5 for £3000. A few years ago literally that would have been £4,500 all day. I bought byrldand for £2,700 that literally a few years ago would have sold for £3500 to £4000. Ok I am special at finding good prices but even it out and its still a massive sustaining drop.

In the end, my question is, is this the new correction? Are the glory days behind us for a long time in the Uk?

[bmw2002]

Oh, great. So I moved from one arcane instrument (pedal steel) to another (archtop jazz guitar). What's wrong with me? I should have gotten out years ago, and now it's too late...

Same here. Went through a whole bunch of pedal steels beginning with a Carter Starter through the Emmons p/p phase, etc., ending up with a Zumsteel. Loved every minute of the experience, but decided to come back to my first love, jazz guitar. Also much easier on the back (although not the wallet.)


FWIW, there are almost always a number of nice jazz guitars for sale on the Steel Guitar Forum for reasonable prices, including vintage Gibsons, etc.

[John A.]

It's not just archtops. Guitars in general. Just go over to thegearpage.net and read some of the grumblings over there. In general, Millennials don't care about vacuum tubes, vintage tones and expensive vintage guitars. There's just not much frame of reference and for that matter, guitar in today's music. Until the next SRV comes along and makes guitar relevant in pop music again, i'm afraid the entire guitar market will continue to unwind...

The next SRV came and went several times recently (KWS, Johnny Lang, John Mayer, Joe Bonamassa) to little effect on the trend away from guitars in pop. Probably, the only hope for guitar is it becoming more popular in Sweden (Karl Martin Sandberg, Mikkel Eriksen, Tor Hermansen and Other Songwriters Behind the Hits of Katy Perry and Taylor Swift - The Atlantic). FWIW, Dr. Luke is a monster player (or at least used to be; probably doesn't touch the guitar anymore).

I have solved all of my worries and anxieties over losing invested wealth by having none to begin with. Viva <$1000 guitars!

John

[Archie]

It's not just archtops. Guitars in general. Just go over to thegearpage.net and read some of the grumblings over there. In general, Millennials don't care about vacuum tubes, vintage tones and expensive vintage guitars. There's just not much frame of reference and for that matter, guitar in today's music. Until the next SRV comes along and makes guitar relevant in pop music again, i'm afraid the entire guitar market will continue to unwind...

Its funny though because look at the top 10 or the biggest selling artists currently. Taylor Swift, normally seen strumming a guitar, or the Ginger haired kid (English) he plays an acoustic.

I run free guitar lessons at my local supermarket. My class is growing phenomenally, currently I have 15 students. 75% of them are women and the other 25% are older people taking up a late life hobby.

I think maybe standard stuff like strats and acoustics will do ok because of the big artists association for young peoepl right now, however archtops and tube amps, no way.

I imagine tube amps will be almost obsolete in 20 years, although there will be a strong collectors market, although small and for a very small number of amps.