Do you think that the current economic indicators will affect the price of mandolins? All things being equal, it is looking as though current market conditions are going to affect the amount of disposable income that we all have available. Is the mandolin a luxury item and are we going to see a fluxuation in the asking prices in the classifieds?
-jonathan
And now for today's weather....sunny, with a chance of legs
"Give me six hours to chop down a tree and I will spend the first four sharpening the axe." - Abraham Lincoln
not sure why they wouldn't be related - but i think there are several other factors that will contribute to price fluxuation, especially in the small builder market. i know i spend more money on mandolins when i have that money to spend...
at the same time - my friend rob put it well the other day when i asked him his budget for a fiddle - he said something to the effect of - well i don't really have a budget but i'll make it happen even if i have to rob a bank if it's a good fiddle.
If I was looking for an economic model I don't think I'd liken investment grade mandolins to the housing market, I'd liken it to gold or other antiquities. That doesn't mean you won't see some nice mandolins hitting the classifieds cheap in the near future. That will probably be tied to the mortgage crunch as much as anything else IMHO. We haven't even seen the tip of the iceberg yet.
"It's comparable to playing a cheese slicer."
--M. Stillion
"Bargain instruments are no bargains if you can't play them"
--J. Garber
History does not seem to indicate mandolins will follow the housing trend. At least the better ones. Needless to say, economy model mandolins may fluctuate more than the upper end instruments. Of course, it is anyone's guess but I think our acoustic instruments will continue to sustain a favorable value even in tough times...if they are good instruments.
Have a Great Day!
Joe Vest
Well using the basic assumption that a mandolin is worth what someone is willing to pay for it....
if there are less people willing to pay top dollar for a mandolin due to economic uncertainty, and more motivated sellers reducing their asking price...
....does the percieved value of the mandolin also become less vauable.
OTOH - I think builders with long waiting lists wont be affected until they get to the end of their lists...that is assuming that everyone who got onto a waiting list and paid a deposit has all of the money available when the mandolin is completed and can complete the transaction.
"Of course, it is anyone's guess but I think our acoustic instruments will continue to sustain a favorable value even in tough times...if they are good instruments."
I happen to agree with this statement from Big Joe. A good instrument will always hold it's value.
-jonathan
And now for today's weather....sunny, with a chance of legs
"Give me six hours to chop down a tree and I will spend the first four sharpening the axe." - Abraham Lincoln
Interesting question.
My guess is Big Joe is right. We are already a miniscule demographic, so I can't imagine too much market shrinkage. ... Unless we're all using home equity to purchase high end mandolins.
Daniel
One more point to think about.
I've heard people say countless times that they wish they had bought brand 'x' or brand 'y' back in the 70's or 80's. To my knowledge, the good instruments, have all increased in value exponentially since then. What I am a little fuzzy on is whether or not makers kept pace with production of good instruments of if the demand for more economically priced instruments was greater during these lean years.
And now for today's weather....sunny, with a chance of legs
"Give me six hours to chop down a tree and I will spend the first four sharpening the axe." - Abraham Lincoln
They definately went up with the housing market. If they follow that trend, who knows. An nice F-4 used to be in $3,000's at beginning of 2000 and F-2 in $2000s. Still very reasonable. Now a nice F-4 is at least $6000.
I'm not going to worry about it as I plan to hang on to my Summit and my son is probably looking forward to inheriting it someday down the road.
Dave
I think if things get depressed from a slow market mandolins in general will decrease in value. There will be plently of exceptions (vintage and the very best builders, like Joe was saying) but if people indeed have less descretionary income to spend on luxury items you'll see prices go down. There will always be folks needing to sell off instruments to get money for various reasons. If there's fewer people with money to spend on these things the people needing money more than the instrument will need to lower their price until it sells. Of course I've seen (in realestate) lately where the prices are being held but nobody's buying so it's a weird market. I sure hope the market doesn't get too goofy with this mortgage stuff as I make my living by selling luxury items.
PJ
Stanley V5
During the great depression instrument sales continued to grow. Many of the manufacturers were looking for ways to build lesser expensive instruments, but sales continued to grow. Many of the coolest guitars were built during that time. Things like the L5, Advanced Jumbo, Martin Herringbone D28, etc, etc. Both ends of the market will grow. The mid range may get a bit bumpy, but those that purchase on the low end will still purchase. Especially when other liesure time activities become more scarce. You can always get together with a group of neighbors, get your instruments out and entertain the folks and pick your blues away. You may not be able to get gas for the Bass boat, but you can always pick a happy tune. Historically this has kept the instrument builders who were able to adjust to the times afloat during times that sent others packing.
Have a Great Day!
Joe Vest
let me begin by saying...BIG JOE YOU ARE THE MAN...i look forward to meeting you @ I.B.M.A,...find TONY and he'll know where the BASS is tuning..if you need a bass player just ask i'll thump all weekend......as to the economic effects on mandolins in light of the recent ..shall i say..SPANKINGS RECEIVED BY FOLKS WHO SIGNED STUPID LOANS.....the sufferers of MAS are squeezing pennies to the point that i cannot conceive anyone scemeing on a GILCREST ...NOT...reading the fine print and maximizing dollars spent.....(i know several owners of fine vintage GIBSON F's that live in JIMMY CARTER ERA singlewides, but their mandos are top shelf)....as to amatuer investors who purchased instruments to resell and pay off the McMANSION...there will be some good deals from some hungry sellers(but not all sellers will be hungry....move fast)....the low end stuff will sell @ higher volume(and price)...but quality will suffer....i see some fine instruments @ fair prices on the horizen....and since dollar cost averaging is the name of the game....patience with first (paid for) mando on the porch is a beautiful thing....
I suppose that it's possible that we might see prices on some instruments fall if folks have to sell them quickly to raise cash to pay off a mortgage. I sure hope that no one here finds themselves in that awful situation.
I try not to get too caught up in worrying about the prices of my instruments: I don't know what a good mandolin will be worth 10 years from now in dollars, but I figure it'll be worth whatever a similar quality mandolin is worth ten years from now. So the value for me as a person who wants a good instrument to play ought to remain relatively constant.
Even if prices go way down and I have to sell my instrument to eat, I don't lose *that* badly in the grand scheme of things. If I were to sell my mandolin tomorrow for $500 to $1000 less than I paid for it, then the cost of my having owned it would still be significantly less per month than my cable TV bill was. I get a heck of a lot more out of playing my mandolin than I do out of watching American Idol.
I suppose that all the people that bought a Loar on an adjustable rate loan will potentially be hurt in a similar fashion as the ARM suckers (I mean buyers) in the housing market.
On the other hand, the lower end and middle of the mandolin market may be bolstered by all the ARM suckers that lose their houses that they can't afford. Once the dust clears and they are moved into their new budget-friendly apartment, they'll have new-found disposable income on their hands. And what will they buy? Mandolins.
The economic fators that caused the Great Depression are different enough from current economic factors that drawing conclusions about the future of mandolins in the market based on the Great Depression is a dicey endeavor.Originally Posted by (Big Joe @ Aug. 30 2007, 14:07)
1) The roaring 20s were roaring because a) Europe in recovery from WWI needed our loans and goods (steel and automobiles mostly) and b) Americans were buying luxury items with money earned on paper (in the stock market) rather than cash in hand (mostly automobiles which required a lot of steel).
2) Other sectors of the economy (chemicals, airplanes, energy services, etc) were growing, but too weak even together to prop up the economy when steel and automobiles took a header.
3) The economy started to tank when Europe stopped being able to take loans to pay for more goods, and then also started being able to produce their own goods. #The American market shrank quickly and there wasn't really enough to prop it up.
Our present situation is based on the fact that indiviuals are using easy access to credit, home equity, and the prospect of increased home equity to prop up their purchasing power. #Because Real Wages are not high enough to feed a constantly increasing real estate market, #that market has topped out. #
(The subprime lending practices were an effort to continue the real estate market expansion by pulling in people who could not otherwise afford to get into the market. #And these are the people who are defaulting, going bankrupt, and unable to pay mortgages with interest rates that have increased from roughly 6% to 9% or more.)
Without an increase in housing prices there is no prospect of increased equity, no ability to refinance, and no generation of wealth. #Indeed because the real estate market topped out, and because it was lately fed by poor credit risks, it is now in decline and in some places causing negative equity. #So not only are people unable to afford to pay their mortgages, but they cannot sell their homes to get out from under their debt.
In the 30s, instrument production increased because economies of scale could be made by improving production efficiency, and because labor was relatively cheap in America. #Today, one of the reasons we are in our current economic predicament is that labor is relatively expensive. #And in contrast to the 30s, factory made musical instruments are being made largely in China rather than the US. #So increased production of factory instruments does not increase either Real Wages or the employment rate in the US. #Further, price drops associated with lower wage costs and more efficient factories don't help people who are already in debt and finding it diffult to get out of debt.
To get more specific, our Golden Age of Luthiery is not factory driven. #It's small shop or individual builder driven, which makes it (and the luthiers) more vulnerable to interest rate and credit market forces.
On the positive side for mandolinists and mandolin luthiers (but maybe not guitar luthiers) is the fact that our market is so small. #This is furtheraided by the fact that not everyone in the economy will be affected detrimentally by the reduced availability of credit. #A few "sugar-daddies" can maintain the top end of the market (Nuggets, Gilchrists, Montelones, and such) which will keep the prices of other makers' instruments (Brentrups, Apitiuses, others currently in the $8000 to $10,000 range) from dropping so far as to force those builders to get "real jobs." #
(I'm leaving out Loars because they are so expensive as to constitute a portion of a different sector of the economy.)
The real test of the health of the mandolin market and the Golden Age of Luthiery will be the disposition of builders whose instruments currently command less than $5000. #They may drop off the bottom end because the folks who buy those instruments may be making that decision based on affordability rather than quality of construction.
It is just possible that we, as mandolin aficionados, have pioneered a new model for the economy: higher wages for skilled labor done in small shops. #This production model can be applied to a lot of products that are currently working in the factory model. #For example, clothing, shoes, food (slow-food movement)/agriculture, home furnishings, etc.
My $2.00 worth of historical and economical analysis. #Hope I didn't bore anyone too much!
[edited for spelling and clarity.]
Daniel
I don't know how they are related...
...I live in El Paso, Tx and it's a Hot Market here. #The same home I purchased in 2005 is worth 75% percent more than what I originally paid for it.
...and with that my taxes go up to #
For mandolins- who knows
From my personal standpoint of things... #I have not seen any increases or decreases in the mandolin market. #Maybe Gilchrist have gone up a few grand here and there.
If the mandolin market moves downward, wouldn't that have to do with just being competative with prices on the lower end like Eastman?
My quick observation is just from what I see here in the classifieds.
Keith Erickson
Benevolent Organizer of The Mandocello Enthusiast
My sense is that on eBay, at least, the market for mandolins from $2,000 up has been very tight for several months, but it may be because it's summer. Some instruments are selling for 20 or 30% less than one might expect, if they are selling at all.
As for the bad loans, we can say that people should have known better than to accept adjustable rate mortgages. I'm more concerned about the millions of people whose pension funds have FannieMae and all that in their portfolios. A lot of them have lost several years of gains, and they had no say about what was in their pension funds. The fund managers should have known better. The banks should have known better. The buyers should have known better. And mandolin prices? We'll see.
When the Korean market went into the toilet a few years ago I lost a 25,000 sale and a 80,000 sale overnight.It also effected the activiy of a 500,000 cello that I was trying to sell. When money stops making money then liquidity is affected immediately. I think that people with enough money are always active in any market at the same rate, but people who have a tighter margin slow the shopping pace considerably. It has effected the violin market quite a lot with a lot of my friends .It's been a tough year so far. The only light at the end of the tunnel is an upcoming election. Our dollar is getting weaker and weaker and that has an enormous impact on our economy.If we don't start to reduce our defecit,(again) then we are not going to see an end for some time. Vote responsibly.
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