Will guitar prices go down after the pandemic?

[raysachs]

List prices haven’t gone up, such as I’ve noticed, but discounts that were easily available pre-pandemic aren’t available now due to limited inventories. I’d imagine that as inventories get back to normal, the dealers that would discount before will do so again. Over the long run, list prices will go up, as they always have. Used prices are a whole other thing. If there’s a glut of instruments after the pandemic, prices will drop. I don’t know if there will be or not...

[dnf777]

Lots of good reasons for prices to come down (or discounts to retrn) but OTOH, more people returning to gainful employment might result in even more sales, and prices remaining where they are.

[Slothead56]

There are guitars, and then there are guitars.

I think the supply and demand model will be split. Higher end boutique and Brand name guitars will likely hold price in the market. I’m guessing there will be a) a glut of lower end, non-big name, off shore manufactured pre-owned guitars coming up for sale on social media platforms (aspiring players that tried and failed); or b) significant drop off in manufacturer sales of the same lower end, non big name, off shore manufactured guitars because the trial market was flushed out during C-19.

If I was guessing....

[Mr. Jelly]

No way. Okay maybe a touch but not really. Prices really don't go down. Gas is a prime example. When it was costing them to store oil the prices were in the mid $2 range. Bacon hasn't been on sale since the price went up. And covid doesn't have anything to do with bacon prices. Slaughter houses are going full out. There aren't that many upper end guitars available right now. I don't see anyone trying to move guitars though. They are asking high prices take it of leave it.

[Mattface]

Originally Posted by Mr. Jelly

No way. Okay maybe a touch but not really. Prices really don't go down. Gas is a prime example.

So you don't remember when gas was over $4 a gallon? Do you remember 6 months ago when it was under $2?

[Br1ck]

Don't forget how many smaller stores won't be around anymore. I also know of folks in the higher end of the market that overbought because of covid, and boomers downsizing and just plain dying. Add that to fewer people with money after being out of work, those not effected but already paying higher housing prices, student debt, etc. Common sense has me thinking big time buyers market, but I'd not bet on any of it.

My buying habits, and habits they are, have been altered buy covid in ways that have me doubting I'll ever go grocery shopping again, or to the hardware store, or a Starbucks. My groceries come from two stores I never used before. All of them. I bought a broom I really like from Amazon. I used to buy them from a store chain that closed. Couldn't find the brand, even before covid.

I can't think of an event that has changed more in my lifetime than covid and I'm 70.

[frances50]

Originally Posted by Br1ck

Don't forget how many smaller stores won't be around anymore. I also know of folks in the higher end of the market that overbought because of covid, and boomers downsizing and just plain dying. Add that to fewer people with money after being out of work, those not effected but already paying higher housing prices, student debt, etc. Common sense has me thinking big time buyers market, but I'd not bet on any of it.

My buying habits, and habits they are, have been altered buy covid in ways that have me doubting I'll ever go grocery shopping again, or to the hardware store, or a Starbucks. My groceries come from two stores I never used before. All of them. I bought a broom I really like from Amazon. I used to buy them from a store chain that closed. Couldn't find the brand, even before covid.

I can't think of an event that has changed more in my lifetime than covid and I'm 70.

I'm 66 and I've never seen a world wide reaction to anything like this before as it is going to affect consumers in all areas of their lives. And I lived through the Hong Kong Flu in 1968, SARS and MERS and multiple other infectious outbreaks. I'm retiring in December and it can't get here fast enough for me.

[catndahats]

just another old guy here.
Something not mentioned in this thread is how strong the economy WAS pre-virus. Real estate booming, wages rising, low interest rates, low unemployment, consumables prices stable (gas/food/etc), etc...people were financially optimistic.

Without naming names, I've casually watched the guitar companies that interest me raise prices over the last five years quite a bit (some 25% - 50%).

Maybe it is age/retirement income related, but a couple of my favorite builders priced themselves out of my comfort range to purchase more of their instruments new. For example a custom build that was $4k five years ago is now over $7k...that's quite a price jump.

Since I am buying, not selling...the used market looks crazy to me currently for used upper end boutique/smaller shop quality guitars. It looks like I could sell my high end guitars that were purchased new over the last 5 years easily for more than I paid for them based on ads that I read here on AGF, a phenomena I have never seen in guitars...many asking prices are within 10% of the current new price. And, an extreme example is one model from a small CA. builder that I have semi-followed for the last 3yrs, the used asking prices have almost doubled over the last year for models 10-20years old when looking on AGF and Reverb.

Bottom line prediction:
Are prices going to drop on new guitars post covid? I doubt it, but your dollar will buy less new or used in the immediate future, and predict there will be quite a few less builders/companies around to choose from---a lot of orphan guitars will find their way to the market.

These times they are a changing:
.. More and more local shops will close, they have been forced to semi close already over the last 10months just like EVERY small retail/service type business that relies on face/face customers instead of internet orders, more and more less established small builders and retailers will close as governed wages, taxes, insurance costs rise.

The used market: Yes, I predict there will be a huge drop in price in all areas when people liquidate non-essential assets. There will be bargains in the short run as folks liquidate luxuries like boats/RV's and high end guitars.
When? I don't know.
I'll hang on to my cash, and just wait for bargains to appear.

Originally Posted by frances50

I'm 66 and I've never seen a world wide reaction to anything like this before as it is going to affect consumers in all areas of their lives. And I lived through the Hong Kong Flu in 1968, SARS and MERS and multiple other infectious outbreaks. I'm retiring in December and it can't get here fast enough for me.

[Maryc-k]

A friend of mine is a well known mandolin builder. He told me more than half his new orders are from much younger players. He is now out from 9 months to 18 months and is thinking about closing his list. He does not want to get any farther out than he already is. So, there are younger players coming into the market. My nieces, both well-employed engineers have taken up mandolin and guitar. While many are out of work, I just looked at the positions that are open at some of the pharmaceutical and biotech companies and there are some great opportunities for young and for older folks (someone called me the other day as my resume shows several years working as an operations director at a biotech). So, there are opportunities and more coming.

I think it will be at least 3 years before we see any kind of abundance of instruments.

[gfspencer]

Originally Posted by Nimiety

...and puppies, kitties and bicycles...

+1 to that! My 20 year old cat died just before the pandemic. She was a deer. Always wanting a lap. Now I can't find another Tonkinese anywhere.

[catndahats]

Great post Maryc,
yes, a lot of young buyers...that are well employed.
and younger well employed are more confident risk takers.
There are always opportunities---if you are in the hot fields...other's not so much.
Will the new young players stick with it? Or as post-shutdown life changes, will they lose interest and flood the used market? Has the surge in instrument sales been supported by folks stuck at home just wanting something to do, but still drawing some sort of pay? A lot of "ifs" going on today.

Regarding taking orders for future delivery:
One of the fastest ways to go bankrupt in any field where operating expenses, material and labor costs are unstable is to lock in future orders at today's prices for product or service that will be delivered at a much later date. Your friend is smart to not extend his future orders without a clause to be able to adjust his final price upon completion.
Might not effect a one person shop working from home as much, but for builders with employees and overhead can be very risky business.

Originally Posted by Maryc-k

A friend of mine is a well known mandolin builder. He told me more than half his new orders are from much younger players. He is now out from 9 months to 18 months and is thinking about closing his list. He does not want to get any farther out than he already is. So, there are younger players coming into the market. My nieces, both well-employed engineers have taken up mandolin and guitar. While many are out of work, I just looked at the positions that are open at some of the pharmaceutical and biotech companies and there are some great opportunities for young and for older folks (someone called me the other day as my resume shows several years working as an operations director at a biotech). So, there are opportunities and more coming.

I think it will be at least 3 years before we see any kind of abundance of instruments.

[AndrewG]

Originally Posted by YamahaGuy

Did meat prices ever come back down after the Texas droughts and high fuel costs back in 2007-2013?

The skeptic in me says, highly unlikely.

If prices came down it would be little short of a historical first!

[mmasters]

I would doubt it with all the inflation coming.

[AndrewG]

Originally Posted by gfspencer

+1 to that! My 20 year old cat died just before the pandemic. She was a deer. Always wanting a lap. Now I can't find another Tonkinese anywhere.

My first thought on reading this was 'a pun'. Deer, lap (Lapp), and reindeer in Lapland. I'm sure that wasn't your intention. Sorry for your loss; the departure of a well-loved family member is always heartbreaking. I lost a beautiful Bengal after 14 years recently. I now have a nondescript-and definitely non-exotic, tabby to share my home with. I just wish he'd quit bringing the local wildlife home. Today's visitor was a healthy weasel. You ever tried corralling a weasel?

[fuman]

Originally Posted by Nimiety

...and puppies, kitties and bicycles...

Sad about the first two. Having done well selling two used bikes, I'm probably almost as interested in that as in a used guitar.