Keynes was a member of the Bloomsbury group...sort of early 20th century hippies including Virginia Woolf, her sister Vanessa Bell, and other writers and artists. Cool. Also, used car prices went up as new cars started having trouble getting parts (electronics from Asia mostly). Has nothing to do with inflation being a cause, but the result is inflationary. Note that free markets always fluctuate and if you didn't know that you are living under a rock, and used bargains are still out there if you know what you're doing...also great new stuff from companies like Schiit and others are amazingly good for the money.
What's going on with the used audio gear market?
OK, maybe I am unrealistic but I've bought and sold audio gear for the past 25 years off and on for my personal use as I change out or upgrade. It seems that a reasonable expectation is around 50% of MSRP or somewhere close. That has been what I've always sold for and bought for. Now I see stuff priced at 80-90% of MSRP. I am talking about things that are not really statement products and can be a few years old and they want 80%. I just don't get it, this stuff for the most part depreciates rather quickly due to the advancement of technology. Is this a hold over from the Covid Inflation effect on supply and demand? I guess that supply and demand will eventually sort it out.
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It's not only the used audio market that could collapse...but if it does, it's likely to be temporary, and it's likely to recover. The recovery is usually triggered by an increase in spending as those with capital seek to take advantage of lowered prices and others suffering and misfortune. Such is the economics of market forces, and the laws of supply and demand.
Economics seems to be so ridiculously complicated with an almost limitless list of variables that hardly anyone seems to understand it. Let alone make reliable predictions regarding the future.
Most of us can only look at historical patterns and try to make a vague sense of it.
Anyway, so far, so good - John Maynard Keynes has been the man. Possibly the only one.
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ghasley - the Chicago School of which Milton Friedman was the main voice have been the minority economic theorists since the early fifties. Remember how FDR was going to ruin the economy? And the post-war "giveaways" (GI bill, subsidized housing loans, etc) were going to ruin the country. And how spending after the 2008 recession was too high even after it was cut in half from what was originally proposed .... the recovery was going to be "too fast" and "inflation rampart". As if John Maynard Keynes never existed, much less the majority of economists who found considerable truth and value in his analysis. |
agisthos said "Yes there has been a distinct slowdown in the last month or two. The rush to hoard and accumulate that was peaking 4-6 months ago has abated, for now. Its not just audio, seems to be in all sectors, collectable cars, houses e.t.c" If Mecum Auctions is any indication of the collectible car market hard to see the slowdown in that segment , a few examples of winning bids from watching a re-run of the Aug 19-20 auction in Monterey - 1971 Plymouth Cuda - $1,000,000; 2017 Ford GT - $925,000; 2 1969 Ford Mustang Boss 469s - $400,000 , and $300,000. Seems rarely that any of the cars at their auctions aren’t purchased , and for significant dollars |
I certainly meant no offense and I apologize if my education doesn’t measure up to your standards. It has, however, served me well thus far.
You were discussing in your post, I believe, your angst with the expansion of the money supply and how it was the cause of inflation. Inflation (outside of an acceptable range) "might" possibly be at least partially due to consumer spending of those excess funds rather than increased savings. Excess demand, especially in an environment where an aspirational purchase is being contemplated, manifests itself into rising prices when the commodity is finite.
When was the last time you were comfortable with the amount of the money supply? At what point in history?
You certainly aren’t compelled to respond to the questions above although I’m always intellectually curious as to what makes others "tick".
And Milton Friedman is but one opinion, as is yours or mine.
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"Respectfully" - you are one of those who is poorly educated and do not understand real economics. Wealth (money) is produced by any individual who "creates" value in the form of a good, or a service, that he personally produces, for which someone else is willing to compensate him. There is no other form of wealth (money). One who does not produce such a good or service - has no wealth (money) - with which to purchase anything. Currency is only a means of exchange of such wealth (money), between a buyer and seller. If currency is produced in excess of the value of all such goods and services produced by such producing individuals - it creates and is INFLATION - because it permits prices to be bid up beyond the supply of goods and services produced! It’s just that simple. May I suggest you educate yourself.
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@ghasley + And another rant about gvt. spending. What about consumer spending, completely left out of equation! Consumers have been spending like crazy coming out of pandemic, so deprived! Supply constraints left out as well, suppose that's present gvt's fault as well.😥 |
Well said @ghasley . |
Respectfully, you are making a circular argument.
When were prices last “fair” in your estimation? Government policy and dock worker practices? Did you sell your car because you were ready to sell or were you selling to monetize and maximize value? Every human is either a beneficiary or a victim of the effects of inflation. Most of us are beneficiaries provided we understand what is a good store of wealth and what is not.
There has been inflation since the beginning of time. Inflation doesn’t cause prices to rise, inflation is the measure of the trailing rise in prices. |
Hi Bill. You touch on the surface of a complicated topic: consumer behavior in general and ‘the wealth effect” in particular. Since I am pretty fiscally conservative and “not as young as I used to be” the audio hobby pricing model doesnt seem to deviate significantly from any other consumer driven segment. You and I (and many others on Audiogon) may be old enough to remember a fair number of economic slow-downs and spikes through the years. They each behave similarly, humans are quite predictable when the law of large numbers kicks in.
If they are fortunate to have savings (be they accessible invested savings or deferred savings like IRA’s or 401k’s) and if they are fortunate to be participating in the dream of home ownership, the rises and dips in these values do tend to affect spending behavior but I’ve never quite understood the irrational break from the reality that paper gains on items you don’t plan to sell to recognize said gains aren’t gains at all. Also, the dependence on debt (especially on depreciable/declining assets like cars or other consumer goods) that many untilize to fund a standard of living is pure folly but hey, no one asked me.
Audio gear used to depreciate (much like cars/boats/campers/motorcycles/toys) a great deal immediately and then settled into a predictable decline curve thereafter. The past several years broke with that natural trend but things have a way of returning to a long term trend unless supplies remain permanently imbalanced. I’m a believer in the money value of time in addition to the time value of money. When its time to sell, I put it out there at a price it will sell and I don’t worry too much about the trends….its worth what its worth today.
I do worry though when I see that unemployment is at record lows and yet, many believe the economy is “in trouble”. I worry when I see the headlines that the average car loan is financed for almost 6 years. The average payment is also at an all time high. Obviously if those are the averages, some are longer and for more money than others and this is happening in the midst of record low interest rates. We have a segment of the population that believes 5% cost of borrowing is outrageous… reminds me of those times where I might be in a casino and there is a line at the ATM machine where they are taking money out from multiple cards to play when they shouldn’t even be there. I’m fortunate to still be working, to carry no debt, to have sufficient liquid savings, to have sufficient long term investments and more importantly, everything is balanced and much of it hedged for good times and bad. I know its old fashined but I sleep well and dont have to check the markets every five minutes.
I shake my head though when I read a classified ad where someone is selling something and their reason for selling is “downsizing due to (pick one) unforseen expenses, kid starting college, divorce, downpayment for a house purchase, starting a business, to pay bills..etc, etc. Audio gear purchases shouldn’t have preceded preparation for the aforemnetioned. This used to be and should still be a discretionary purchase made with excess funds. If someone has a car loan as mentioned earlier should they have purchased a pair of Wilson Sashas or a DCS stack just because they had room on their third credit card? To each his/her own I guess…heck, maybe I should have had more “borrowed” fun earlier in my adult life but that isn’t how I’m built. With parents who came through the depression and WWII that just wasn’t going to happen. Easy access to credit is both a gift and a curse, depending on the person.
Rant over…until the next time LOL. |
...is correct... I just sold my 2013 Corvette Grand Sport, which sold for almost the amount I paid for it in 2015 - I could have sold it for $2-3K more than I paid for it... IF... I had been willing to go through the hassle of selling it at current retail. Any time we have a government willing to spend trillions more than the economy is producing, and a federal reserve printing more money than the economy is producing - we will have rampant inflation, which is what is driving prices of everything "through the roof." We can't give people more money than the goods and services they produce, or the demand will always be greater than the volume of goods and services produced - and the prices of goods and services will be bid up by the people with more money than they've actually earned through their production. With the government's and dock worker union's ignorant restrictions in the supply chains limiting supply of almost everything, coupled with millions of consumers producing nothing, but living off those that produce - we will continue to have rampant inflation. It's not the "greedy" wholesalers / retailers - it's the fools in our governments who are too poorly educated and informed to understand real economics.
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@ghasley + 1 |
@agisthos could be that inflation has caught up to even the audiophile crowd? Who is hoarding McIntosh amps? Not me. But I did buy every 68 Z28 available in my area. Thank the lord it was only one. But a dang nice one.
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Buying/selling has been all over the map in my life. In some instances, I was the ignorant one for paying too much. Probably went the other way as well. I once put a unit up for sale as an auction item. I was a little embarrassed at the selling price because it was out of line for the actual valued price of the unit. It also has happened more than once that I have sold a unit only see them resell it for sale at a much higher price elsewhere. Hmmm.
I believe that you must be comfortable with the price decided on for sale or purchase. In my experience, I am also more comfortable selling without negotiation knowing that the product has been properly priced to begin with. In my other hobby of woodworking, and acquaintance of mine always makes sure that you know just how really expensive and impressive his new machines/tools cost. |
@ghasley Good post and it also made me laugh! This summer is also slower than past summers based on my selling experience which is vast 🤓. Confidence level in the economy, stock market losses and slowing housing market all impacting buyer behavior. |
@ghasley +1 |
Some humorous insight into our Audiogon community is on full display. Here are a few facts:
No greed there…just normal human behavior to an economic situation. Greed can’t happen for a non-essential item, only opportunism, which is what it is.
Historically, over decades in our hobby, summer and late summer has always been slow for sales as people are typically more active outdoors and with other normal pastimes like hiking, biking, golf and ballgames of all kinds. In addition, for the first time since pre-pandemic, there was a real vacation season and a real back to school window where audio rightly took a backseat.
Things typically pick up in the fall/holiday season (for certain gear) and then late winter/early spring there always seems to be a bump I guess due to some who purchase utilizing tax refunds.
I read the same old arguments here each year: our hobby is dying, prices are too high, these high prices charged in the high end will end the hobby, Mofi hurt my feelings, tubes suck, tubes rule, digital sucks, analog sucks, young people don’t get it, I miss the good old days when Ike was prez, foreign made gear is evil, the economy is in the tank, rap isn’t music, and on and on….maybe if the gear you are trying to sell isnt selling…maybe it isnt desirable at the price you are asking. Since when is that a new thing? Maybe if something is listed for sale at a price you think is too high and greedy and it still sells…maybe you are the one who is incorrectly evaluating the pricing landscape.
I get it, you want what you want for the amount you want. I think there is an old song from the ditant past that goes something like “You cant always get what you want”.
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@dekay Did you step on my toes? No. Your concept of "greed" includes someone setting a price for used gear that is higher than what others want to pay. All I’m saying is calling this kind of action "greed" stretches the word beyond useful limits. Surprised this makes no sense to you. Seems plain as day. Let’s leave it there. |
Yes there has been a distinct slowdown in the last month or two. The rush to hoard and accumulate that was peaking 4-6 months ago has abated, for now.
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Your points "d", "e" and "f" are valid points and certainly validate the intangible elements of financial transactions. Under your "probably a bunch of other reasons" listing, items could include: - dissolution of marriage. Just get the stuff out of the house. - estate sales -- where there is a complete emotional disconnect from the equpment and 10 cents on the dollar beats 0 cents on the dollar. |
I have been in A/V retail for 30 plus years and I can tell you in the absolute truth that prices in audio, excluding tv's, have risen 30 to 50% in 2 years. A Marantz receiver that sold for 799.99 in 2020 is $1499.99 now & B&W 704's, the smallest 700 series floorstanders, were $2499.99 a pair in 2020 are now $3500.00. So it stands to reason, like cars, the used market prices have increased. Supply chain or greed only time will tell: Not sure the reasoning anymore but price increases have put the brakes on mid fi audio in my area. |
The answer is patience. In general, I don’t scour the used market for areas of need, but for opportunities to acquire interesting stuff at a bargain price. Sure, you can focus on amps when you need one, etc., but in general, I have a slush fund budget for used gear when a good opportunity arises. Craigslist is great for that if you are in a big enough metro area. In the Chicago area, in a decade I’ve built, traded, sold, and rebuilt systems for less than half retail/new. True, sometimes you get mistreated gear, Investigate first, and don’t buy or bargain downwards if so. A guy on Craigslist had a Nakamichi PA-7 for something like $450 and I negotiated it down to something like $325 but a prior owner had drilled big circular holes in the top cover. Still sounds great. Just got a pair of KEF R11s for $1850. Still available new for $6000. Live with the warts, enjoy the sound! |
I cannot fathom what you think "greed" is, then. Take an uncontroversial definition (via Wikipedia):
The notion that someone setting a price for used gear that is higher than what many others want to pay is an instance of "greed" suggests to me that we inhabit very different realities.
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@hilde45 + 1 |
They are willing to take the risk of an item not selling because they have a price in mind that they want. Who am I to judge that as "greed"? It's their price -- it's their calculation. If they get their price, we've established what the market will bear. If they don't get their price, they suffer the opportunity cost of spending more of their time trying to sell it. I cannot fathom how greed comes into it at all. |
hilde45: Some of the sales listings I see are either greed or sellers who are not clear on the concept of value. For example the typical asking prices of old production Klipsch Chorus/Forte have increased approx. 300% from 3 years ago. Are the sellers asking $2-2.5K+ basing the asking price on the price of the "new" Klipsch Heritage line (I don't know - haven't asked them)? As far as used recently manufactured gear advertised with a 10%-15% discount I would just purchase a new unit. A lot of people have been hard hit financially from Covid-19, and I'm guessing that this may also play a part.
DeKay
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Thank you for posting. I am going to build a system and wanted to save money by buying used but when looking at the price differential between used and new, and the risks, I felt like it was not worth it to buy used. I feel better about my conclusion knowing others feel the same way and that used prices seem too close to new prices. |
The market will set used prices. My guess is that there are a lot of buyers looking to upgrade to newer used equipment. I wanted Moondrop Blessing earbuds, but the market price for used buds was high. I bought a pair of open box buds from the distributor, Apos, and got a warranty and comfort that they were in good working condition. Buying used from dealers has some advantage. And there are a lot of dealers selling lightly used gear. |
@curiousjim Thanks.
Or... (d) wants to get stuff out of their house and that is more important than money I listed some speakers at about 83% of cost, new. I got very few nibbles. I lowered it to 73% of cost and sold them. I had a clear, detailed description and excellent photos. I was willing to wait 6 months to sell them at the new, lower price. Because, I don't need the money right away and could also listen to them while they were listed. |
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In past year I've sold some streaming devices at well over 50% price of new, lots of people getting into streaming, thriving market, especially at lower to medium end.
I've observed over the years some people ask high prices, item doesn't sell, no mark downs, item sits on market for months. I'm afraid some people very attached to audio components, emotional valuations don't compute for most of us buyers. |
Anyone who sells below market value is a) not paying attention, b) not very good at 4th grade math, or c) an advocate for the greater good, unselfishly serving humanity. Something else to consider is the replacement cost of those goods. If they are sold at 20% below current market value, the seller will not be able to replace them with similar goods at the same price. Thus, a very poor financial decision. |
+1 testpilot If they can get their asking price well good for them even if it is high. As you move up in the price range and the item is fairly new I can see asking more than 50%. I see ads for gear that is less than a year old that are asking more than 50% retail and I don’t blame them. For example ,let’s say you purchased a pair of speakers for $30K and after a few months you realize that they just aren’t working for you. If you sell them at 50% off retail you are taking a pretty substantial hit and someone is getting a pretty good buy. |
@hilde45 Exactly right, if someone will pay the price, it's not greed. We're not talking about food or gas, but an extreme luxury product that has a narrow range of buyers. Why not ask as much as someone is willing to pay? |
Did those items ever sell? Did you go back to the ads to see what happened? @dekay Is it "greed" to sell something at a price you want to sell it for? It might be foolish, if no one wants to buy it but if someone wants it at that price, why is this an example of a vice, greed? I understand the desire among folks here to try to understand the causes of the increase in used gear prices, but the notion this represents some kind of moral failing on buyers and sellers is eluding me. It's one thing to charge high prices for insulin and another thing to charge (relatively) high prices for used gear. |
As a used gear guy who was gonna open a shop until crypto crashed…
the great gear rush of 2020 is over… with the exception of DAC’s and very rare gear it’s gone from “don’t sell it before i get there” to “I’m afraid, I need you to hold my hand and I’m gonna lowball the heck out of you”
I’ve had 2 McIntosh pieces on Craigslist in the SF bay for a month that would’ve sold within 4-6 days max 4 months ago…
the market will adjust but this hobby is filled with stubborn old men that know what they’ve got 😂 |
Part of the reason you are seeing sellers wanting more than 50% of what MSRP *was* is IMO due to the following: 1. MSRPs have increased due to price increases from vendors. When a vendor increases the price for an item it raises the value for the same used items. 4. Sellers have other ways to monetize or get rid of gear. They can give it to family. They can donate it. They can trade it in. Results with all of this can vary. But depending on factors involved it can be an option and may set a floor on what a seller will accept in a purchase. |
