The Instrument Market Today - Fine Violins & Violin Bows?

January 7, 2009 at 02:30 AM ·

I wanted to get thoughts on the current market for instruments, specifically fine violins and violin bows.  If one were in a position to be able to buy without selling, is this a good time to buy, given the state of the economy? 

I read a recent New York Times editorial by Paul Krugman, "Fighting Off Depression," where he discussed a looming second Great Depression, and this spurred my curiosity about buying now, or some time in 2009. 

If one were to correlate the acquisition of a fine violin and/or violin bow ($250K and up for a violin, $120K and up for a violin bow) to real estate - the market now is far worse than it was say, five years ago.  Home buyers often have to sell their homes (for far less than the home would have brought) to buy - either way, both ends make for a loss in most cases.  As such, are instruments in this same quagmire?  Would one have a better opportunity to buy a fine violin now, or in the next year, for a price far less than the instrument would have brought a few years back?  Or, would you say instruments haven't been much affected by the economy?

I'm quite curious to get your thoughts on this.  I have been looking mostly at violin bows with my dad - specifically, a Tourte, or a D. Peccatte.  I can review some auction reports, but not dealer or private sales.  The auction reports don't provide much - meaning, it's difficult for me to locate information with regard to provenance, weight of the bow, etc.  I've considered buying the "Red Book," released in 2006, which goes back to 1985.  One could trace an instrument's buying/selling history, I suppose, via that medium, but I've held off on buying the book.  It's about $100.00, and I don't know that it would give me much of what I'm looking for.  

Just curious as to your thoughts on the instrument market, and if one were in a position to buy without having to sell - is it a good time?  Of course, I've yet to find a great Tourte...just privately looking around, though haven't made many formal inquiries.  Not trigger happy per se, though the right violin bow, or violin, avails itself when it chooses to.  :)

Thank you in advance for your thoughts.  Valerie :)

Replies (22)

January 7, 2009 at 03:39 AM ·

Valerie,

I don't mean to sound....something or other, but I have to wonder why someone who is in the market for 6-figure instrument or a Tourte bow even needs to wonder why this is a good time to buy. If you're at the start of a career and you can afford this class of instrument, what is stopping you? Are you really worried about timing the instrument market?

January 7, 2009 at 04:30 AM ·

A correlation with the housing industry isn't appropriate: the housing industry isn't a victim of the current economic problems, it's one of the causes. Fraudulently easy loans that were unlikely to be paid off inflated the housing market and home costs beyond what they were worth, in a bubble that was overdue to burst, and finally did. What happened was not an unfair collapse, but a correction to compensate for a very large amount of shady business resulting in a false growth in home prices.

That has not happened in the violin business, which was relatively stable through that period, not involved in the bubble, and certainly not built on bogus loans.

But to answer your question, historically, violin prices do not drop in bad times; they stay the same, and sales numbers fall. I don't know why this is, but it's a very long term thing, going back decades, at least. Probably it's because most violin sales are optional (elective surgery on long term holdings), and most owners choose to hold rather than lose.

January 7, 2009 at 06:45 AM ·

Mr. Darnton - thank you for the information, I appreciate your insight.

Mr. Cole - Kindly note that I am not at the beginning of a violin career, and if I were, it would be a shame to waste an FX Tourte on me!  :)  An amazing bow is meant for the amazing player - if I ever did have the good fortune to own truly fine Tourte, a Kittel, a D. Peccatte - a "player's bow" -  I'd loan it out, never play it, and never let it collect dust in a personal gallery.  I am not a violinist - I am a "student" of the violin in that I study all things related to it, and I am ever fascinated and passionate.  My original post was to gain others' thoughts on the economy and if it does/does not affect the instrument market.  I am not worried; rather, merely asking to get opinions on the issue. 

Thank you, Valerie :)

January 7, 2009 at 05:32 PM ·

michael wrote,,

"That has not happened in the violin business, which was relatively stable through that period, not involved in the bubble, and certainly not built on bogus loans.

But to answer your question, historically, violin prices do not drop in bad times; they stay the same, and sales numbers fall. I don't know why this is, but it's a very long term thing, going back decades, at least. Probably it's because most violin sales are optional (elective surgery on long term holdings), and most owners choose to hold rather than lose."

i am not in the violin business. since  the violin biz has an open market, it is still dictated by supply and demand.    not necessarily the most efficient or transparent according the the modern standards set by other industries, but everyone still feels the pricing pressure.

what to make of the notion that price does not drop but sales number falls? to me it means a decrease in demand, meaning at a certain price, relatively speaking,  there is less demand for a particular violin.  if one multiplies price and sales number,  the product is the bottom line: take home, size of operation and plans for future stocking.   depending on the severity and duration of the current financial downturn, there is a point where with enough sale number decline,  pricing may yield.  not everyone has megaloans to default, but not everyone has that perfect setup in anticipation of this once in a hundred years event.  imo,  the trend is toward a buyer's market.   if someone is smart enough to divest some cash/stocks/real estate into strads before the crash,  2 thumbs up.  now, at where we are, it is not a clear case to make to convert devalued assets into high end music instruments.

fortunately, on the horizon, the next wave of big ticket buyers should come from china, a combination of mass effect and wealth effect.  remember years ago,  the stereotypical japanese tourists with their cameras?  well, the chinese tourists are coming and ready to spend.  as a rule,  the chinese are known to pay premiums for highly sought after items as statue symbols.   a newly developed auction house with operation in asia is consistent with the trend development.  what is there to stop tarisio to start  showing instruments in hong kong, shanghai very soon?

the key i think is how to position oneself globally.  think ahead.

 

January 7, 2009 at 05:45 PM ·

OK, I'll think globally. Where did you have in mind to hide from what's going on?

http://www.straitstimes.com/Breaking%2BNews/Asia/Story/STIStory_323181.html

I wouldn't be looking to China to be saving anyone's markets in the near future!

January 7, 2009 at 07:27 PM ·

well, it seems that people have been talking about china crumbling under chinese communism for probably 40 years and it is still standing.  and a few are coming

http://www.palmbeachpost.com/business/content/business/epaper/2008/04/07/m1bz_china_0407.html

the minority of over 1 billion people is ready to spend, particularly if one takes into consideration the average household saving rate,  single child household structure, and the zeal for classical music,  etc. 

despite the recent surge of talented violin makers from china (or originally from china),  my impression has been that credible,  talented chinese players all opt for antique violins from europe, particularly italian.  not all italians are great, sure, but they probably don't want to hear it:)   

there is a void between those antiques in the west and those longing to get their hands on them.  for dealers out there, perhaps time for planning.   perhaps not, as hinted by michael.  by no means am i suggesting china alone can save anyone's market, or that michael should jump onto the china wagon, but the businessmen i know of, internationally,  are in the business for business.  one thing for sure, those who are going to buy expensive antique violins are not factory workers or farmers who are busy protesting.  isn't antique violin market an elite one?

January 7, 2009 at 08:51 PM ·

Valerie,

Sorry, but your post made it seem as if you were actively shopping for a Tourte, and that your financial situation means that you can afford it. 

Scott 

January 7, 2009 at 08:37 PM ·

A lot has happened since last April, Al.

January 8, 2009 at 06:40 PM ·

I sometimes wonder also about the Chinese (and Korean and Indian) market.  One the one hand, they might have their hands full dealing with events as they unfold.  On the other, this might be the sort of small (by their governments' standards) purchase that brings enough prestige to keep at it.

I was reading in Faber's book last week that although prices for top-tier instruments have done well for the last 40 years or so-- better than inflation, and even modestly better than stocks-- they were roughly flat for the 30 years before that.  So be sure you really want to own a $150,000 stick of Pernambuco before you write the check.

 

January 8, 2009 at 08:37 PM ·

I think it's futile as to try to predict what's going to happen to instrument prices in the coming months and years as it is to predict the gyrations of the stock market.  It's possible that deflation will set in and prices for many goods will fall, but who knows what that will do for instrument prices?  Maybe violin prices will fall along with everything else because no one will be buying, but maybe those with cash will see instruments as a good place to park their money while other investments are unreliable.  Maybe deflation won't set in or maybe violin prices will continue to rise as they've been doing in the recent past.  Maybe we'll go back to the era when violin and bow/prices remained relatively flat for long stretches of time, but maybe not.

January 8, 2009 at 10:04 PM ·

Hi,

Mr. Darnton - could it be possible that the prices don't change because unlike everything else in the economy, the number of higher-tier violins are fixed, like that of works of art by master-artists?

January 8, 2009 at 11:03 PM ·

I wouldn't disallow that as a factor. Certainly in recent years more and more people have been wanting fewer instruments. As "they" say, they aren't making them anymore.

January 9, 2009 at 02:56 AM ·

My comparisons to the housing market were not intended to include the current housing debacle, but rather the housing market during more normal downturns.  In those instances, prices don't fall -- but sales slow.  Which is exactly what Mr. Darnton described for high-end violin sales.

Elaine

January 9, 2009 at 04:00 AM ·

i am not convinced that in "normal housing downturn", sales drops but price stays since housing follows quite an efficient model of supply and demand:  any time demand or supply shifts, price moves accordingly.   http://www.investopedia.com/university/economics/economics3.asp

apparently, with abnormal housing downturn,  that model works too well for comfort!

with high end violin market, as i am being led to ponder here,  volume drops but price stays. i have some reservation about its validity IF the business is modelled as an efficient trader in the market economy.

to put it bluntly,,,are you in the business to make money or not?  do you have a min yearly revenue figure to stay afloat or not?

not long ago, donald trump had a plan to build a seaside golf course in scotland and his plan was severely hindered when one local gent refused to sell his lot which was situated in the middle of the planned golf course:),,,pretty much at any price.  why?  because it is not about money, but principle, that money meant nothing to this guy who regarded donald trump as a piece of ,,, as a developer  who was going to ruin the natural seascape forever.

so, with cases like this, can we draw some broad conclusions?

is that piece of land really priceless, or  the principle of economical efficiency does not apply here because the scotsman is not a willing participant?

i have a $50 junker. unlike some of you, i am not going to ask you about upgrades.   to make a statement, in support of the obama economy stimulus plan,  i will open the bid at $50k.   

January 9, 2009 at 04:41 AM ·

You seem to believe that there is some choice involved that the dealer makes. I do not have much choice: owners basically set the wholesale prices of their vioilns, and I add my bit on top of that. If I don't make some effort to meet their requirements, either they go somewhere else, or withdraw their instruments. The dealer can attempt to shape expectations to a more reasonable level, but if people were reasonable we'd have peace and everyone would have freedom and food.

And as I said, for most of them the sale is elective, not forced: they can wait forever for something resembling their price. There's a rather spectacular example of that in the market right now, where the owner of a very visible instrument has set an even more visible price that's over 2X the previous record. I gather his attitude is either you can buy his violin or not--in the short run he probably doesn't care.

To put it bluntly, it's one thing to say how you THINK something SHOULD happen, but you have to be prepared for the awakening that reality has a different idea of things.

January 9, 2009 at 04:52 AM ·

Michael, I enjoy how your mind functions....My kids live in Chi-Town,close to your shop. I'll stop by if the kids buy me the plane ticket and take me out to eat at McCormicks & Schmick's again...     Really,I'd love to try your fiddles....

January 9, 2009 at 05:20 AM ·

that owner is playing my junker game.  

in my previous post, i have pointed out the distinction between serious participants and non-serious ones,  and that pertains to everyone, meaning seller, dealer and buyer. 

it comes down to different levels of hunger.  that is the reality.

many ways to move forward. thinning the margin being one.  it is  a choice. not the best of scenarios at not the best of times.

 

January 13, 2009 at 03:18 AM ·

Usually, as other people already have said, top quality fine violin/bows' prices don't fall.  They'd rather get higher and higher unless they get any kind of physical demages.  Make sure you've got at least 75,000~80,000+ to perchase any Dominuique Peccate bow.  That was the auction starting price a while ago, but I'm not sure about through the dealer.  It might be more expensive, but I stronly suggest buying through a dealer or at a well-known shop.

January 13, 2009 at 04:01 AM ·

I just visited Howard Needham this afternoon and tried a couple of his latest fiddles.  They are very nice indeed.  I don't know if his fiddles qualify as collectors items, perhaps one day they will, but he said his orders have slowed down somewhat in recent months.  But he still has 1.5 to 2 year backlog so things aren't terribly bad for him.  Also, he was pretty certain that his prices will INCREASE in the coming months, not decrease.

Of course, this is just one maker and may not be a very accurate barometer of the fine violin market as a whole.  But it does tend to support the theory that items with limited supply, retain their value during a poor economy.

 

January 13, 2009 at 04:34 AM ·

since violin industry does not really have something like consumer index, consumer confidence data,  concur that it is probably sensible to illustrate--not to prove or generalize--with specific makers' situations, assuming the makers are comfortable with full disclosure.  not sure how much one can get out of dealers,,,not their fiduciary  duty for public announcement.  the other venue of some value is perhaps auction house data which can be traced by the public. 

in 3-5 years, can someone remember to revive this thread, assuming the world is still around? :)

February 1, 2012 at 02:38 AM · It's revived:)

February 1, 2012 at 08:40 AM · I don't see prices going down for old instruments. On the contrary, many "humble" modern Italians fetched very high prices in recent auctions.

The number of fine instruments in auctions is decreasing too, I think.

One of the reasons is that many owners prefer keeping their old instruments instead of "converting" them to vulnerable Dollars or Euros.

On the other hand the market for top contemporary instruments is quite good for buyers right now, I think.

www.manfio.com

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