The common wisdom here has been that pianos are not good investments. Whenever someone has posted about this, the standard response has been that there are better places to put your money if you want a return on investment. Invest in the stock market. Well, in the last six months, it's become a different world, hasn't it? It turns out that many of the better returns people were getting were based upon, well....fraud. It's not just the Madoff ponzi scheme which has been uncovered.
-The rating firms which determine risk on investments were giving securities AAA ratings, which were actually high risk investments. They were doing this because there was a quick buck to be made.
-401k's have tanked.
-Some stocks have lost half their value. My brother, who knows this stuff, says that stocks are still not cheap relative to P/E ratios. He still advises buying gold.
- We have seen investors buying treasury bonds for little or no return, just because they think it's a safehaven for their funds. So, T-bills have been at record lows. Reuters Article

So my question is, are pianos now a more attractive investment? We may be entering a deflationary period. If pianos will at least hold their value, that's better than a 401k has been doing.

No matter how world-class the piano is, it's only worth as much, as an investment, as someone is willing and able to pay for it.

What most people are 'willing and able' to pay for anything these days seems to have taken a nosedive.

Plus, isn't the general wisdom that, the older a piano gets, even if (perhaps especially if) it hasn't been played...the more work it will need, to the point of rebuilding or trashing?

None of these factors points to a piano being a good investment, in my opinion. Keep in mind, of course, I know nothing about finances and investing.

I would, however, say that for a piano buyer, it seems like a good time to make a purchase, if you have the funds to do so.

For many people a piano is still a "would like to have" rather than a "must have" article. As belts are tightened I'd regretfully suppose that many parents will perhaps be passing on such a purchase and rather be making sure they can continue to provide what they can in terms of housing, future education costs, etc. And thereby tending to save (or at least pay off outstanding debt) rather than spending on consumer goods (like musical instruments) and services (like music lessons), which in a way is precisely what most Western politicians do not want them to do



-Michael B.

Pianos are still depreciating assets, which still often take a long time to sell.

A musical instrument is not an "investment". Anyone who seriously wants to invest money for a return should not be putting it into a musical instrument, if that is really their sole purpose for buying the instrument.

Nothing about the stock market changes that, nor T-bills, which really doesn't change it. Pianos go down in value as they age. Period. The only exception might be some rare collectible, but that would depend upon a buyer wanting that particular value. Pianos need maintenance and upkeep, and there are parts that just go bad due to age, there isn't anything you can do about that. If you don't do maintenance or restoration, a piano will not even stay at the same value.

I guess it depends somewhat on where you are. In any case, I don't think pianos are investments, despite what some manufacturers might tell you.

Here in Singapore, all things being equal, pianos depreciate sharply in the first three to five years. The minute the piano arrives in your home the resale value drops to something like 20% of the retail price.

However, currency values and the cost of parts and manufacturing aren't static. Since I placed the order for my Sauter Omega back in September 2007 the Sauter factory has had to increase the cost price to its dealers, and the Euro has appreciated sharply against the Singapore dollar. So if I sell my Omega today I reckon I would take less of a hit on depreciation than I otherwise would. But that's assuming I can find a willing buyer in the current economic climate.

Roy's brother is right. The worst may not be over yet. There is an increasing chance that the U.S. could default on its sovereign debt by summer this year. I read (can't remember where) that the country owes almost as much as it's net worth. China alone holds almost half of that debt!

The incoming Obama administration is going to add tremendously to that debt in trying to prevent all the wheels from falling off. Unfortunately there's nothing else it can do.

I think it only works when you buy the land under the piano. Otherwise it doesn't really work.

On a related note (pun intended), there are now investment funds that specialize in rare musical instruments (not new ones, and no pianos that I'm aware of).

http://www.cnn.com/2008/US/03/26/invest.violins/index.html?eref=rss_latest

Hello everybody, been a while since I've posted here. Been rather busy.

The cost of the Grotrian Cabinet (192cm) model has gone up from 32K Euro (when I bought mine) to 43K Euro in 5 years.

The issue in the next few years is that the depreciation of all currencies will mean that all items will become more expensive (in currency not necessarily value).

This means that if you have the money now to buy something you want, you should buy it now. Because your money will be worth less in the future.

Of course if our banks and financial firms had not gotten us in to the mess we are in, the govt would not have to mint money like they will and inflation would not be an issue. But that is life.

Pianos are NOT investments, unless of course you purchase a particularly rare instrument, which might ultimately go up in value (akin to a piece of art or other collectible). 99.999% of all pianos (yes, even Steinways) are depreciable items, like cars -- they just don't depreciate quite as rapidly.

Bernie Madoff is to the investment world what Terry Wilson (perhaps?) is to the piano world. I choose to think that neither comes close to defining the industry they have sullied (Madoff far more spectacularly, and perhaps a tad more willfully, than Wilson).

RoyP

Not all pianos! Just one, Steinway! Under one condition:
Buy it directly from restoration company. The best deal you will get and will save you money.

You basically answered your own questions regarding piano being a good investment.

If one was double short the stock market in October when it crashed, you would have made money

It is a great time to find pianos at low prices. People are selling to cover their loans, or because they have to move and can't take it with them. This does not mean your piano will become an investment and gain value....it simply means your cost basis is below current market value.

Eventually the two will meet. :rolleyes:

While pianos may not be the most ideal or often 'hoped-for' investment that some stores use in their selling techniques, there are still differences in the choices out there.

There are at almost all times pianos that are fairly priced, overpriced as well as underpriced.

As a dealer I have always concentrated a bit on those makes which I believe happen to be "under-priced" showing hopefully some basic upward mobility in terms of higher ratings by Larry Fine, at least as time goes by.

In this regard Sauter,Brodmann grands, Hailun and especially Estonia have done exceptionally well for us.

And hopefully for our customers...

How this translates in actual "investment $$" in terms of resale is anybody's guess, however the proper fundamentals of increased recognition are certainly important here.

Try to apply same math or logic to pianos whose rating hasn't changed in some 20 odd years - or has even gone down, and the answer would certainly be somewhat more difficult.

For those who are hypnoticed simply by *brand name* preferring to live in a bubble of assumed safe economics, the moment of reckoning will surely come - as it has for many other sectors of the industry today.....

Personally, I do no longer believe in the old "name recognition" argument: just check pianomart and see how many "famous names" are there for sale - it sure seems endless and is getting longer by the day.....

For a nasty way of testing things, just call a dealer and pretend already owning the piano you are planning to buy - then ask what he would pay you if he would buy it back right then and there,[sit down for shockwaves coming..] then add about % 20%- 30% - there is your "HOPED FOR" real resale Value.......

Final advice : do buy with your HEART - but don't forget to apply some basic logic either.

Remember, the more you really like your piano, the less the prospect of "selling" it may come up in your mind later....

Norbert

A piano is not a financial investment. It has constant maintenance costs and it depreciates. The one we just bought we got for about 22% less than the person who bought it when it was new 3 years ago, and it is in beautiful condition, just broken in really. It is an investment of another kind, but only if someone enjoys playing it.

It still doesn't work if you don't buy the air above the land as well.

I was actually puzzled by this phenomenon.

Right now in pianomart, 240 of Steinway grand pianos are being listed, and this number is larger than any other makes...

Yamaha comes in second, with 92 of pianos being listed, and Mason and Hamlin comes in third.

Of course, pianomart may not be the best representative of today's piano market, but still Steinway's overwhelming numbers being sold are really surprising. I never thought Steinways are so... common.

As for me, I bought an old piano that I truly marvel and love...

Steinways are one of the few brands that retain value to the point that rebuilding and/or reselling are viable options. They don't get thrown out, so they will end up on the market again.
Where do you think many other old pianos end up, since they are not being resold? Three guesses.....


Sophia

As pointed out in so many other Steinway-related threads, their output is far greater than other top-tier manufacturers. Couldn't that alone account for this?

I don't know...

Steinway reached this 200 number mark some time ago, (I regularly check pianomart in hope to see exotic pianos, actually) and I think this number stays as it is because Steinways are not being "sold" right now...

In today's harsh economy, lately all I hear is another business closing its doors or becoming bankrupt in the United States. Korea's economy suffers, also.

How can piano hold its value when the demand is (supposedly) lower than its supply on today's market?

As a member from younger generation, I can honestly say that especially in this century, there are more affordable temptations than pianos (especially Steinways) out on the market...

To me, there are two distinct aspects to an "investment in a piano".

The first is in the object itself, and realistically, it is a mechanical object which requires care, maintenance and will eventually wear out. It may be considered a work of art, but it far more prone to show wear and tear than other "art" investments such as painting. So thinking that you will see increasing monetary values does not apply to the object itself, though some types of pianos obviously decline in resale value faster than others. (Exception being Steinways, where no laws of the universe apply...)

The second and more important element of an investment in a piano is the actual experience of playing itself. The experience does not happen until you make the investment. The choice of instrument (affected obviously by the number of dollars invested) will have great bearing on the quality of the experience indeed. Measuring this value is somewhat difficult as experience and the attendant wisdom or pleasure gained are somewhat ephemeral. Like any kind of education or refining process, the result is in the life of the person, and assessment of it's value is subjective. But short-changing the investment to "save" money could be as ridiculous as buying an item on the menu at a restaurant that you hate, because it is a dollar cheaper than your favorite dish. You can save a dollar and lose the experience. There is no satisfaction in that.

It helps you lose weight inexpensively.

Pianos are not good investments.
Violins, violas, and cellos are VERY good investments. They go up in value slowly, compared to more lucrative investments, but steadily.
Look at Guadagnini violins-10 years ago they could be had for as little as 2,3, or 4 hundred thousand. Now they are all up above one million.

Curiously, I just had my piano appraised by a reputable appraiser and was advised, to my surprise, that the piano is worth about $35,000 more than I paid for it. Apparently, the "limited edition" aspect of it, which was ridiculed on this forum in the past, when I asked about it, meant something to the appraiser. I realize, of course, that a piano is worth only what someone will pay for it. Also realize that Bosendorfer raised their prices a lot since I purchased the piano new about four and a half years ago. Nevertheless, it is nice to know that at least someone thinks the piano appreciated in value. "This piano will appreciate in value for reasons of artistic merit, craftmanship, and rarity".

This was surprising given all the other information I have been able to find about the long term value of pianos.

Pianos are great investments in enjoyment, happiness, music-making, and delight. Isn't that enough?

Re: Guadagnini violins, my grandfather decided not to buy one in the early 1950s because it was $500, and he didn't want to pay that much. The violin market is ridiculous. Meanwhile, pianos, as others have said, must be bought because you will love and use them.

Thanks for the responses. This is just something I've been thinking about. I was thinking more in terms of someone buying a quality used piano, which has already taken the initial drop in price by being sold for the first time. If you held onto it for ten years, you could probably still get your initial investment out of it, and maybe a little more if it has been well maintained. As some stated, there are some good deals out there right now. But yes, there are maintenence costs along the way.

There are, and are going to be, alot of used pianos on the market. And the average person's ability to pay will be down. So, at least short term, there will be less demand and more supply.

Why is the violin, viola, and cello market so different from the piano market? Plenty of violins are available, of all different levels. Are there more players? Do violin dealers approach old instruments differently?

RoyP: Part of the problem here is your definition of investment. An investment where you would get "your initial investment out of it" at the end of ten years is a terrible return on your money, especially given the need for ongoing maintenance. You would do better, even at today's interest rates, with your money in a savings account. Indeed, in light of inflation you will have lost money even if you sell the piano for what you paid for it.

In any event, I stick by what I said earlier. Buy a piano because you love it and want to play it, not for what you can get if you resell it ten years on.

As for violins, they are just different. Apparently they do not wear out in any meaningful sense. Let's face it: pianos are machines, and they wear out!

Commodities are only worth what the market will bear. I think in the next couple of years we might all be finding that what we once regarded as "assets", might soon find themselves in the "liabilities" column. If this economy gets worse, we won't be able to give pianos away . I'm just glad that mine are paid for. There's not much solace in being a piano teacher either, as it's the luxury market that evaporates first. The fact that Piano Mart is inundated might be telling the tale. There again new cars of all kinds aren't selling either. There is a genuine wait and see attitude that has taken hold of the consumer in general. Don't forget folks, retailers just suffered the worst sales since 1970 for the Christmas shopping season.

So if a buy a piano from you today, how much more will you give me for it a year from today?