Hi Folks,
I currently own a nice upright and would love to upgrade to a grand. One way this would be more feasable is if I bought a piano that would likely to increase in value in the next 20 years. My first choice apart from investment value is the Baldwin L, but my teacher has a nice rebuilt Steinway B that I like very much. So I was thinking that getting a good B might be wiser long-term because it is more likely to appreciate in value. Is this true? All replies are welcome, but objective input would be more helpful as opposed to some of the over-the-top Steinway advocacy we've seen around here lately. thanks in advance!... Larry

No. Pianos are'nt financial investments that appreciate. They are more of an invesment in the pleasure of music that they allow you to experience for a life time.

Deja Vu, I'm personally not going down this road again You're asking for trouble! You're welcome to call me and I'll tell you what every Steinway model sold for in 1910,1920,1930,1940 all the way to the present and the analysis on fair market value, new,preowned, all original unrestored and with full restoration with or w/o new soundboard
Plenty of recent previous threads exactlty on point.

Many pianos will depreciate more slowly than inflation, so their dollar value will go up over time. That especially happens with used pianos, which have gone through initial depreciation. Your Hamilton may have done so. However, at some point, pianos wear out.

If you want to invest in Steinway, they are publicly traded on the New York Stock Exchange under the symbol LVB.

Steinways keep up with inflation.
Some argue the point.

Why anybody would consider buying a Steinway as an investment is beyond me. Oh and I do have a friend selling her 18 month old ebony satin Steinway L that she paid over 50K for. Anybody want to give her 55K? I think not. She'll be lucky if she gets 40K. How's that for an investment.

Rich

I think you're more likely to limit depreciation than to see any appreciation.

Don't dismiss Baldwin, especially since you like your 243. Baldwins are underappreciated now because of all the company has been through in the past 25 years. Nice Baldwin grands are selling at considerably less than their musical and build quality should net them. If you find the right one, and Gibson does a decent job of representing Baldwin, you could be looking at a piano that will hold its value without you committing a large amount of your resources to purchase it.

Rich D-

I bought my Steinway to play. I bought it used and feel confident that I could sell it for more than I bought it for.

You fantastically smart.

Larry,

The fact is that ALL pianos bought new depreciate in price. I'm talking straight dollars here. Forget inflation and all that. So if you bought a new piano today, it will be impossible to sell at the original price or even near it for awhile. Same with a car, it depreciates after you take it from the lot.

However, pianos in general will stay at this depreciated price indefinitely and not depreciate much further. Some pianos, like Steinway, will increase from that price so that over a long period of time, say 30 years, it will be worth more than you paid for in original dollars.

This a little of supply and demand here. Inasmuch as there's not that many new Steinways produced, and a lot of demand, the price of used pianos go up with the price of new. For this reason, prices of used pianos are tied to the price of new ones.

This in itself does not constitute a 'good' investment, but it is certainly pleasing to know that at least you're not losing an arm and a leg like when you're buying a car from constant depreciation.

Where you have a chance of achieving this better gain on price, IMHO, is in buying an excellent used Steinway, particularly if you buy a used one from a private party since that initial depreciation is no longer an issue.

Get a good deal on a used Steinway that you love, maintain it well, and it will likely hold it's value over time.

If not, then congratulations! You're still playing the finest piano ever made. (imo)

--------------------
1922 Hamburg Steinway OR

I know of a person who is disposing of a Doctor's collection of 25 Steinway pianos- many currently being restored. I asked if the Doctor was a collector and his answer was that the Doc's original intention was investment. It did not turn out that way after all. Now he realizes that the concept of expecting returns on Steinways is unproven. The owner has had these pianos for a long time.

First of all, I'm a music guy not a money guy. So I'm not asking the question because I want to make money by buying the right piano. It rather that when I'm done playing, hopefully 20-30 years from now, it would make sense to leave my family a piano that has held it's value, or maybe even appreciated in value. I love piano so much I wouldn't mind living in a cheesy mobile home if I had to, as long as I could have a nice grand piano. However, I'm married to a very practical woman. So if I can demonstrate that a particular piano might go up in value in the next 30 years, I may actually be able to get one. I'm trying to find a way to be able to justify spending $20 on a piano. Larry

Hi Jazzwee,

I think you are taking a very sensible position. A perfect example would be Rich D's example of an 18 month old Steinway bought at 55k and probably going to sell at 40k or less. One person's loss is another person's opportunity, so while a Steinway of this sort might be hard to find, it does seem like an opportunity for the second owner.

How do you feel about depreciation on a fresh rebuild from a professional rebuilder? I know from what you've told me that you are extremely satisfied with your piano and the state of the rebuild, and that it will almost certainly satisfy you for a good long time. But don't you think a buyer of a fresh rebuild would experience sharp depreciation in the first few years.

Let's say for example that you needed to sell your Hamburg in three years for whatever reason. As a private seller, you would be selling a ninety-year-old piano which had been rebuilt three years before. You would not have a showroom of expertly rebuilt pianos behind you, or be able to defend the quality of the rebuild as the actual rebuilder. You might have some value in your immediate geographical area if pianobroker's business is going strong and he is well-known. But that is an 'if'. You would certainly be confronted with prospective buyers who would focus on the fact that the piano is 90 years old while you focus on the fact that,in your opinion, it is close to new. Also, would your warranty be in force in three years and transferable to another owner?

It seems to me that buying a fresh rebuild could be subject to the same kind of initial depreciation hit as a new piano. What do you think?

I know you hope for this, Turandot.

Larry, I couldn't resist, Any piano 30+ years later after lets say you wore it out to the point of needing complete restoration, has no value as a rebuildable "core piano " with the exception of a Steinway grand (ok,some M&H)You can sell a Steinway grand totally unrestored,rusted strings,finish peeling,missing parts,cracked bridges damaged or NO soundboard for" big money" in relation to what a new Steinway sells for. Lets say, 30 years from now 2037,a new Steinway "B" sells for 120K conservatively priced, how much would you speculate that a Steinway "B" would be valued in need of restoration "as is" I'd say it would be more than what you payed for the piano at present plus you played it for 30+ years. If you bought preowned or rebuilt you would really be at an advantage down the road Fair market value is always based on the replacement value less depreciation + restoration considerations etc
I hear the the rumbling of dispute already

Larry,

It would depend to whom you feel the need to justify the $20,000.

If you can afford $20K then simply spend it. It seems a very moderate sum.

Just think how much extra pleasure and harmony it will give the household.

It's a no-brainer in my view.

Alan

I think it's likely that a real "money guy" would advise you not to confuse or try to combine money and music in the way that you wish to. This combination does not work easily for most people. It takes lots of experience and there are lots of risk factors. Ask anyone in the piano-selling business.

Better to meet your musical needs in the best way possible given your financial resources. PW offers lots of good advice about piano quality. Follow it. Buy an affordable high quality piano and you will have your musical needs satisfied for a lifetime.

With the money you have not spent on a piano, invest according to your ability to tolerate financial risk and your need for capital accumulation. This is the most straightforward way for you to take care of both your finances and your musical wishes.

Jazzwee has an extra advantage in that he has a Hamburg Steinway. A unrestored Hamburg Steinway has even more value than a New York Steinway in that they sell for 25% more than the latter

Karenabcde,

What I hope for and am confident I will receive is a thoughtul answer from jazzwee. I asked him the question. I know and respect him from a lot of email communication. The question was about Steinway and rebuilds. I said nothing disrespectful about either. I made mention of pianobroker and his impressive inventory of expertly-executed rebuilds. I am one who follows pianobroker's posts with interest, respects his opinions, and has learned quite a bit from reading his stuff.

I asked nothing of you and would appreciate having nothing back from you regarding my question. Stop being obnoxious.

Turandot:

I was only stating what appeared to be the case.
I have nothing but ongoing and deep respect for you.

NEW FLASH!
EXTRA EXTRA!
READ ALL ABOUT IT!

Realizing they were selling off valuable appreciating investments all Steinway dealers shut their doors today.

They realized they can make more money *keeping* the pianos and waiting.

No new Steinways will ever be available again.

Karenabcde wrote the following to Turandot—

"Turandot:[/b]

I was only stating what appeared to be the case.[/b]
I have nothing but ongoing and deep respect for you." [/b]

Tut tut... such sarcasm is unbecoming... :rolleyes:

From the Steinway website , in case you haven't seen it.

Here's another good article from Worth magazine .

In some cases, it appears than Steinways don't just keep up with inflation, they cause it.

(retreating to bomb shelter...)

From my perspective, the chart shows that Steinway increase in dollar value has not nearly kept up with inflation, much less represented some sort of longterm investment value.

Of course, laypersons will disagree on how to calculate inflation in a useful way. Let me suggest this: in 1900 an ordinary wage for a blue-collar worker making a living supporting a family might have been $1 a day or 10 cents an hour (long working days). $10 a day would have been very good money indeed then. There were lots of blue-collar workers in the U.S. in those days. Five cents would buy a beer and they'd throw in a sandwich. Today, in better-off states in the U.S. the median family income is $60K a year, which is about $250 a day. In this measure, price multiplication generally during the 20th century was about 250 times or 25,000%.

I pulled a 1920s 52 inch upright piano out of a barn in the 1970s so I could restring it, install new hammers and learn about pianos. It was a beautifully built piano and still had its original price tag inside: $300. Today such a piano would cost somewhere between $10K and $20K, let's say $15K. This represents a price multiplication of 50 times or 5,000%.

The Steinway average increase in value was 4.3 times or 430%.

Maybe a relatively good "investment" as a piano, but not as an investment investment.

Better to make a few good investment investments and enjoy several nice pianos during your lifetime. Use the income from your investment investments to buy your pianos; don't confuse your piano with an investment.

Actually... according to this inflation calculator , here are the inflation factors for each year (the amount you'd have to multiply the original price to adjust for inflation up until 1988)

1959 3.94
1978 2.56
AVERAGE 1959-1978 = 3.25[/b]

1920 6.60
1958 4.04
AVERAGE 1920-1958 = 5.34[/b]

1900 13.65[/b]



The only category on the graph that hasn't quite kept up with inflation is the 1959-1978 group.

The vintage Steinways, on the other hand, appear to have kept up with inflation quite nicely.

Mike-

If you use a financial calculator for this, starting in the year 1925 to 2007, that is 82 years. Using a starting value of $300 and a final value of $15,000, the annual appreciation rate is 4.78%. True, $15,000 is 50 times the starting value of $300...but this does not mean the inflation rate is 5000%.

My post above was referring to Mike's Barn Piano Example, not the immediate chart above.

Right. You have to take the compounding value into account.

4.78% annual appreciation is definitely higher than inflation.

Not a great "investment" per se, but it did hold its value-- and then some.

Karen--

I specifically was not talking about an annual inflation rate but using inflation as a way of talking about current price vs historical price. Current price vs historical price was the method that Mantix's chart used, and I was trying to be comparable to his chart. I should not have used "inflation" in this potentially confusing way, and I will edit my earlier post. Thanks for pointing this out.