A couple years ago prices were pretty much stagnant. The very high end collectable vintage guitars kept increasing in price but at a modest level (although in no way, shape or form can we call those prices modest!) but the average Martin, Taylor and Gibson guitars stayed pretty much the same for well over a year. Then prices began creeping up and in the last six months those prices of run-of-the-mill American guitars have shown a noticeable increase, in most cases in the range of 10% - 15% above what they were about a year ago.
There are way too many variables to make an accurate assessment of why prices do what they do. Availability of premium wood, cost of production, even things like shipping costs are obvious but the intangibles like popularity of specific models (driven by exposure, i.e., use by famous musicians see on TV) and even internet chatter play into the equation.
Without question the biggest challenge faced by premium guitar manufacturers is a reliable supply of good quality wood. Bob Taylor made a very interesting video a few months ago about the shortage of ebony and his solution has been to buy a mill in Africa and contract to secure a supply of that wood, which is the preferred material for fretboards. Gibson is still in the middle of a huge scandal involving their buying of banned Madagascar rosewood. Martin continues to experiment with using their HPL material (High Pressure Laminate) for the necks and sometimes even the bodies of their lower priced guitars, some of which are now being made in Mexico to save on labor costs. I’m not privy to what the boutique makers are doing about the problem of wood supply but in my favorite magazine, Fretboard Journal, small makers always talk about the issue.
This shortage is a big factor in the incredible rise in prices of fairly recent “vintage” instruments. For example, ANY Martin D-28 made before mid 1969 is made of Brazilian rosewood and the prices of even mid to late 60s D-28s have gone through the roof. Gruhn and Elderly list average condition 1967 – 1969 D-28s for at least $5000 now; the same guitars cost about $1000 less as recently as a year ago. Less common rosewood Martins of the same years like 000-28, D-21 and D-35 go for even more. Even the average D-18 (made of mahogany) from the 60s now goes for at least $3000 and in most cases closer to $4000. And because of some construction techniques used by Martin back then and owners over the years who did not humidify the guitars properly it is rare to find any Martin from that era that does not have cracks in the body. There is plenty of debate about what this should or should not do to the value of the instrument but suffice to say, at least from the big deal dealers, cracks don’t seem to affect the values at all.
There is some irony here. Just because a guitar is made of Brazilian rosewood does not necessarily mean it’s going to sound great. I know this may sound somewhat sacrilegious to guitar aficionados but I stand by that statement. While almost all Martins sound at least very good, there are some dogs out there, even ones made of Braz. I’ve played quite of few D-28s from the 60s and there were a couple that I’d love to own but quite frankly, your average recent D-28 and especially the HD-28s with their scalloped bracing sound just as good as the average 1960s D-28 – and in some cases, better. A student of mine just purchased a brand new D-28 and it has that classic Martin resonance and power. And at a 40% discount (common from many of the dealers) it cost him well under $2000. Add to that the fact that Martin still offers their limited lifetime warranty to original owners and a smart buyer should think long and hard about whether they should invest in a “recent vintage” Martin or a brand new one.
However, it should be noted that unlike those 60s Martins that have increased in value ten-fold over their original price it is unlikely newer ones will see that level of value in, say, 30 years. There is a very simple and basic reason for this: Martin makes many, many more guitars today than they did in the 1960s. This means that even 30 years from now there will be many more guitars available on the used market, just as there are today when considering Martins from the 1970s, 80s and 90s. If I was a player looking to maximize my investment in my first really nice guitar and getting the lifetime warranty wasn’t that important I would be looking at guitars from those decades for the best values.
So what will happen in the next few years? My guess is that prices for new American made guitars – and even the higher end imported ones – will continue to rise at a rate of at least 5% - 10% per year. At the same time as the market becomes saturated with recently made used guitars the price a seller of a guitar he bought new will be proportionately lower. I continue to be amazed by the prices I see on EBay for recent, used Martins, Taylors and Gibsons – they are in almost every case unreasonably high. How many of those guitars are actually sold, I do not know.
Bottom line: if you’re considering a brand new Martin, Taylor, Gibson or other high end guitar you should probably go for it, after doing some research to find the best price. Those prices may not rise as quickly, but they are certainly not going to stay the same. If you’re thinking about a used premium guitar, you’re in luck. There are more choices out there than ever before. If you have your heart set on a vintage instrument, well, it most likely will be a good investment but be SURE you play it first and compare that sound to what’s out there now, brand new or recent.
Peace & good music,