I posted this in another thread but it kinda got buried so I figured it was worth its own topic.
Coronavirus. A lot of questions being asked, but the most important question of all is this:
How will this affect the used banjo market?
Don't be fooled by the bull trap, we're not done crashing yet. I've heard it said that when the market goes down, collectible commodity values go up. Will we see an increase in vintage banjo prices due to the economic downturn? Or will we see a sell off as retired people realize their market losses and need to generate cash?
Does this hold true with used non-collectible banjos? With unemployment going up, will we see people selling their contemporary banjos to make rent?
And what of international supply chains? Most new banjos are made in China, will we see a disruption in supply or a reduction of demand for these products? How will this affect prices? Will quantitative easing increase the value of a new banjo when compared to the dollar?
We're already in a big trough for banjo prices, can we go further down? Is there a bottom?
My prediction is basically all used banjos will fall in price, with the exception of truly collectible pieces which will jump in price.
What does everyone else think?
I've been wondering the same thing...
I have a strong feeling however that any potential savings to be had for us Canadians on used modern banjos will be offset by the fact that our dollar is tanking versus the USD.
We shall see.
Sales will continue to slow due to economic uncertainty, that will drive down prices of all banjos new and used. There will also be a surplus of used banjos that will linger for probably years.
Edited by - jan dupree on 03/31/2020 10:53:46
Important to state that many of your arguments are not surprisingly, American issues.
The rest of the world isn't in dire straights as many govts have taken socialist-type responses to protect employement, savings, rent, debt, etc...
This whole topic comes off as alarmist, to produce forward-looking statements, and with unrealistic predictions.
This event is not an economic one, but is human response driven one.
It's artificial, and nothing to do with prior market conditions.
If you are desperate enough to sell, don't assume the rest of us can't pay and present a rock bottom price because a sentiment of market conditions. Predatory buyer's are hoping/praying for this to happen.
Edited by - banjotrader on 03/31/2020 11:06:28
We shall see. From years of looking at the Marketplace here its seems that 1) many folks have a very high opinion of the value of their banjo and 2) nobody seems to be in any big hurry to sell their banjo. Perhaps this will change when laid off folks start selling their banjos for far less than they are worth because they need to buy food, medicine and pay rent right now, but I don't really want to buy someone's banjo under those particular circumstances. I understand that the cash would be helping them out, but I would feel bad about taking advantage of a horrible situation.
My parents made it through the the Great Depression; my mom had two dresses and not much more in Eastern Kentucky in elementary school. My kid and I made it through the Great Recession. I was a medical social worker with a good resume and ended up volunteering at the public hospital here for 2.5 years with no work. I keep two styrofoam cups in the back of our pantry to remember that was all we had for dishes and cups in the first months of it. Now we have and economic collapse driven by an early stage pandemic. As far as banjos go, I'm practicing every day for an hour or more and hope to play on Facebook live at some point having only taken up the banjo about a year ago. And, having dealt in vintage instruments for 38 years, I'll say that prices are cyclical. It's a buyer's market and few are buying, but that'll change. Right now, playing them is invaluable for me.
Anyone that has bought a high end banjo and don't have enough money in the bank to float them for a few months; just in case they loose their job or get laid off or something worse, like were going through right now: Has no business owning an expensive banjo or any other non essential item for that matter.
Many of us are living way above our means these days, I have a ton of guys I work with that have to have 60 plus hours a week just to keep up with their friends & neighbors just to try to impress somebody. I don't want to have to worry that I'm not going to get my money back out of a huge purchases I've previously made including my banjos just to make ends meet in bad economic times.
Originally posted by LouZee Picker
Anyone that has bought a high end banjo and don't have enough money in the bank to float them for a few months; just in case they loose their job or get laid off or something worse, like were going through right now: Has no business owning an expensive banjo...
Other than specifically mentioning banjos, you've basically described the situation for about 95% of the folks who make a living as a gigging musician.
When the stock market goes down, particularly if it stays down, most musical instruments go down with it. There is nothing artificial about the economic hit that both the US and the rest of the world are taking right now. Last serious economic downturn, 2008-9, I wasn't monitoring banjos as closely as guitars, so I can tell you what happened with them, and my observations are limited to the used and collectible market, not new instruments. Most guitars went down in price, some much more drastically than others. A Gibson 1957 Les Paul Special in excellent condition went down from about 22 thousand to 8 or 9 thousand. Martins, which had been appreciating much more gradually in good times, went down by a much smaller percentage. So some of the variables on how much they go down will be determined by how long the economic downturn lasts, and also by which instruments have been appreciating radically in the "good times" versus those that have simply been inching up.
Those who can afford to will simply hold onto what they have. There will be some desperation sales, which is sad. So I think you will see lower volumes of instruments being offered for sale, but the prices will be much lower. If the Fed is right about where this might go (short term unemployment of 30% or more, which is higher than the great depression (although certainly for not as long)) it will take very low prices to tempt people to consider $$ expendable enough to buy anything they don't truly need. And with professionals sidelined right now for the lack of any gigs, who "needs" another banjo. This might all recover by the summer if we are luck. I sure hope so. Think of the employees at Deering, for example. This is not a hobby for them. This is their life.
stelldeergibber - that is probably the worst cheerypicked stat you could grab. High end instruments that had recently been purchased, like the good times vintage Martins would of course hold - Nobody wants to take a loss. Closet finds coming to market show the big presented drops; and not ones to be felt by 99% of buyers. Yes, this is artificial. The market didn't slow in the last month, it was made to. I wouldn't be so pessimistic. Also the comparison to the 2008-9 downturn was largely an American-made problem, driven by completely irresponsible actions, no oversight and cascaded from there. Nothing like what has come about this time. If it does cascade into your economy, you can thank your govt for not protecting you.
A day of reckoning for the overheated US economy was bound to happen sooner or later anyway and the pandemic and resulting forced economic shutdown has simply caused it to crash hard instead of the usual sputtering downward during a normal correction and periodic recession. We are in uncharted territory now. It may make those who have a lot of money tied up in collectible instruments thinking they were a good long-term investment think again, however, as always, those who have invested prudently and bought in down markets will do ok. Those who bought at the top not so much. The prewar feeding frenzy was way overblown in the first place and prices have been self-correcting for some time now anyway. Nothing is safe right now. When it comes to family and overall financial well-being vs bragging rights to own a rare collectible instrument you know which one is going to win out in a crisis. Normal economic predictions go out the window. Cheers!!
Edited by - banjoez on 03/31/2020 13:48:00
Fact is the vast majority of North Americans are within 4 digits of an empty savings account, pre-virus.
This is one of the bigger sources of market volatility in this economic climate.
Enter virus pandemic, the proverbial manure has hit the fan and many, many people of low and middle income cannot go even 14 days without income or borrowing.
Household savings ratio in North America is generally lower than the left leaning European countries. We're trying to keep up with the Joneses'. I chalk it up to cultural differences.
I wont even go near the comment insinuating that the government should be expected to protect everyone from massive economic fluctuations, tho.
Banjos are not a staple. They probably won't move much.
In the crash of 2008 and after 9/11 many collectible values dropped like lead balloons on most items. A lot of categories never recovered. When times are hard, people realize they cannot eat or use a houseful of collectibles.
I don't know . . . I couldn't find any at Costco the last time I was there -- they were sold right out.
Originally posted by KCJones
Coronavirus. A lot of questions being asked, but the least important question of all is this:
How will this affect the used banjo market?
Fixed that for you.
Just look at what has sold on eBay, reverb or BHO
All I can think of is a couple of cliches:
> Trees don't grow to the sky.
> Something is only worth what someone is willing to pay for it.
Interpretation: Nothing goes up forever. And the priced of used, collectible or vintage instruments is set by buyers, not sellers.
As to the previous comment that the economic impact of the covid-19 pandemic is artificial and human-driven . . . what economic activity isn't human driven? There is no natural law of economies. Economies are created by humans and their ebbs and flows reflect human decisions, actions and reactions. The economic impact being felt by hourly workers who are out of work and not getting paid is very real. The economic impact felt by the owners of businesses that are entirely shut down or operating under severely curtailed conditions are very real.
I can easily imagine there being some people who will be looking to raise needed cash by selling off un-needed belongings, such as banjos.
Edited by - Old Hickory on 03/31/2020 18:12:26
At the moment, people are sitting at home bored, and buying banjos. Major and minor music stores are closed down. Bedroom dealers selling from their homes are selling up a storm. This may change quickly.
Originally posted by Banner Blue
Bedroom dealers selling from their homes are selling up a storm.
Are you sure about that?
Like he said it has been posted in another topic. No need to repeat.
'Straploks' 29 min
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