I'm looking to buy a violin and I narrowed the search down to two modern italian violins from two different makers. One maker has one auction price in Tarisio, the other has about six, with prices varying quite a bit. I'd like to know how meaningful the auction prices are, in case down the road I want to sell the violin.
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My modern Italian was 2x the price of highest resale value at auction... luckily it was an upgrade situation at a shop, so the purchase wasn't as painful to the pocketbook all at once.
Auction pricing is typically different because auctions are final sales that don’t come with trial periods (although some still allow potential buyers to inspect the lots in person before the auction) and they don’t come with the customer service of a shop. Prices are not in line with the retail market because of the nature of auctions, where eagerness to win and fear of missing out on a hidden gem can drive prices beyond what’s typical.
While auction prices used to be kept low to allow dealers to buy and resell instruments, they have risen so much in some areas that auction prices have hit records that have in turn caused the shops to raise prices to match. It only took one Roth auctioned at $20k to drive retail prices up overnight.
When I was young, people used to buy copies of the Red Book, which was a compilation of auction results for various makers, and take that and Henley’s dictionary along with them when they went to loon at violins. If they felt confident of an attribution, they would look the maker up to see what a reasonable price ought to be at auction and would expect the retail to be double unless there was damage, in which case the auction price would be lower.
I hate to say it, but I don’t think there’s really any rule of thumb anymore. To know what retail prices really are you have to know what people are paying. You can look at violins advertised on websites to see what’s being asked, but you don’t know the actual price paid unless you’ve seen the receipt. Obviously shops and buyers aren’t eager to publish their information, so the uncertainty grows as the distinction between wholesale and retail is blurred.
Auction houses like to advertise it when their lots reach new records, so there’s an emphasis on raising prices to promote an investment vehicle for the speculative buyer and increase the amount paid out in buyer and seller premiums. I think the trend is moving toward establishing parity between auction and retail prices so that buyers can just look up auction results when walking into shops for comparison shopping. I don’t think there’s market has quite reached that point yet.
When it comes to pricing violins, so much comes down to talking with colleagues and experts and comparing prices of violins being offered and prices paid. Price comparison is difficult to begin with because in order for it to be at all useful, you really need to have a lot of detailed information on each violin (provenance, age, condition, school, certificates, etc.). Just pulling up a spreadsheet of prices won’t tell you that one violin was pristine but another had a soundpost crack or was revarnished. Taking a mathematical average of prices won’t necessarily be accurate, either.
Now individuals often participate, although dealers don’t like it. That raises the auction price. It also takes a lot of customers away from shops who carry the inventory, since the keenest buyers may now already own an instrument.
One more factor can be how many people are in the market for an instrument by a certain maker during the very short time period that it is offered by an auction house. One needs at least two people bidding against each other to push the price up.
Auction prices can also be manipulated to be much higher than normal.
I know of one maker whose instrument set a record price for a new instrument at auction (easily done if one knows how to play that game), but when people who already owned one tried to sell at a similar price to ostensibly make a big profit, the instruments did not sell.
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Also, it's quite common to see a variance in price from the same maker; this can be due to the location of the shop (higher prices in California than Missouri for example), or due to repairs to the instrument, or the time in the makers career when it was made, or other factors.