After the Fall:
the State of the Vintage Guitar Market
in sales before Dallas, and it’s been brisk ever
since. I think we’ve turned a corner,” says Jim
Singleton, owner of Jim’s Guitars, as we sat
in his compact, U-shaped booth. “Things are
starting to pick up.”
Jim Singleton (left) and George Tsantis (right).
The Fall
But before we explore that optimism, we
should take a quick, cursory step back, if only
to truly appreciate how the vintage market got
to its current point. Although vintage guitars
have been generally considered a good investment vehicle since the mid-1980s, when baby
boomers re-entered the market after some
time away, the last eight years of the market
turned into a frenzy. With the advent of truly
easy money in real estate, stock markets that
seemed impervious to gravity, and low-interest
home equity lines of credit that never seemed
to dry up, the vintage guitar market represented a prime opportunity to increase returns
and diversify portfolios with similarly little risk.
A market long dominated by players and afi-
cionados of great craftsmanship, the vintage
world quickly went mainstream.
“The people buying guitars were no longer
musicians. They were doctors and lawyers
and brokers. The guitars got too expensive
for real players to buy,” recalls Kevin Borden,
resident PG vintage expert and long-time
dealer. “It got insane. There were certain
areas of the market that were, quite frankly,
100 percent overvalued.”
The passion part of this passion market was
replaced with excessive speculation, done on
behalf of more and more outside investors.
Musicians had long evacuated for safer, more
reasonable territory. Prices lost their footing
in logic, and were increasing almost daily.
George Gruhn wrote in a 2005 newsletter:
“While many dealers and collectors seem
to be of the opinion that prices can only go
up, it is my opinion that feeding frenzies
do not necessarily result in either the best
decisions or long term stability.” And even
though trusted sages like Gruhn were sounding the warning bells, they were unable to
sway a market captivated by $50,000 Strats,
$200,000 Les Pauls and no end in sight. It
was a party, and the party was good.
Of course, all good speculative bubbles have
to come to an end, but the vintage market
crash, along with almost every other collectible market, received a great deal of help
from a faltering US economy. As the housing
market began its painful cratering in mid-2007
and accelerated into the fall, the vintage market quickly followed. It was a logical, expected
reaction, according to Jim Singleton.
“A large segment of [vintage] buyers held real
estate,” Singleton explained, “so when the
real estate market was strong, the money was
there and they were investing in guitars and
antique cars and baby boomer stuff. When
that money dried up, it affected this market
and every other market. Just about every nonessential luxury market has gone down.”
