Whether it was the kaleidoscopic, acid-soaked space blues of
Jimi Hendrix, the mournful bends and soulful vibrato of
B.B. King, or the smoky juke-joint riffs of a road-weary
Keith Richards, the six-stringed rebel known as the electric guitar has become an unwavering obsession in North America and throughout the world, plucking its way into the consciousness of modern popular culture with the fury of a thundering power chord.
It's an obsession that's subsequently resulted in a thriving market for 'vintage' guitars, as more and more consumers sought to not only emulate the aesthetics of their on-stage heroes, but to capture the elusive sound that aged wood and electronics seem to mysteriously produce. But what began for many as a pleasurable hobby soon became tantamount to investing in real estate or stock, as prices for rare, pristine models of early Fenders and Gibsons soared into astronomical realms.
In fact, while stocks and real estate fluctuated over the past few years, vintage guitars seemed to be bucking market trends, and instruments that originally cost a few hundred dollars to purchase several decades ago, were now being bought and sold for hundreds of thousands of dollars.
With the value of such instruments dependant largely on condition, some stopped playing them altogether, storing them in temperature controlled vaults.
Not exactly the romantic image of rock and roll recklessness and aggression the instrument has been associated with for so long.
"I don't think a lot of people want to think of the guitar as an investment unless you're dropping $10-50,000 on it, then you have to think of it like that," admits Mark Kesper, co-owner of downtown Toronto's Capsule Music on Queen Street West.
"That's a good chunk of cash and you're hoping to retrieve your money and make more on it, that's when it really goes into the business side of things."
Kesper notes that vintage guitars with original parts are most coveted, and alterations dramatically affect value.
"What you see the most is a refinished body. It takes about 40-50 percent of the value off a guitar. Another thing is the repaired/replaced headstock. Almost half the value gets knocked off."
"As investments the right guitars have been going up exponentially, there are dips throughout the years, but the right guitars always end up going up in price."
"Late 50s Les Pauls are constantly going up, I think they've reached like $300-400,000 now. It gets a little ridiculous...The real guitars that will make people money are out of the price range of the majority of people."
Tundra Music's Ed MacDonald is a self-appointed "cultural anthropologist of guitars". Aside from a long career in the recording industry, he's been the go-to guy when famous musicians visiting
Ontario
are looking for a special instrument.
"Every major act in the world has called me for guitars," he boasts. There's virtually nobody that's into vintage that I haven't found instruments for, redirected, or taken them to other places to find guitars."
"I sold the guy in The Hives a guitar for $150,000, I didn't even know who the Hives were...I've been getting calls from the Stones since Keith (Richards) got in trouble here (for a Toronto heroin bust) years ago, and I still have one of his guitars here with me."
But MacDonald thinks the vintage bubble is about to burst, in fact he's already seeing some disturbing trends that hint towards a major downswing.
Much of the problem lays in the
U.S.
economy, where rising energy costs, plummeting real estate, and a weak dollar continue to have far reaching effects.
High-end vintage guitars have finally proven they're not immune to market conditions.
"The prices went up and up, it was unbelievable, 30 percent from 2004-2005. 1954 Strats went from $25,000 to like $60-80,000...I can tell you right now they are not getting $50,000. The problem is the apex has hit and there's only one way to go...Everything has dropped. We're at that point. How far is it going to drop? It's dropped pretty hard."
"And a lot of this has happened in the last three months."
Kesper has also noticed a cool-down.
"The vintage market, four years ago it was crazy. It's dipped. For the past six months it's been pretty slow in the high end vintage market," he admits.
"It's all economics, the threat of recession, a lot of people don't want to put a lot of money into a guitar."
"As soon as the American economy starts picking up again, I mean look out, guitars could go through the roof, it's hard to say...But if I just tried to sell vintage guitars out of here I wouldn't have a store, it would be Deadsville."
In the past MacDonald has organized vintage guitar shows, and this year's was supposed to be the 15
th annual version of the event. It was scheduled for June 2 and 3
rd, but has since been cancelled.
"There is no market in terms of putting a show like that one on right now. There's no interest. It's a shock, it's really hard for everybody," he admits.
"You've got to be very careful because it's like
Florida
now.
Florida
has million dollar homes selling for $250,000...but is $250,000 too high?
"The point I'm trying to make is every market has its 'crack the whip' phenomenon...what we are experiencing now is the initial wave of people who are hip to the real thing that's going to happen, market wise and economy wise, they're getting scared and saying 'I better get out of this and get some money.' They aren't panicking, but they're tightening up everything and they still don't even know what they're going to end up with. It's a bit of a wild card."
"There's a bit of stagnation, where people are a little scared to sell and a little scared to buy...There's a lot of ambiguity and confusion as to the values of these things."
Thankfully, most guitar players want guitars they can actually play, and banged-up vintage instruments still provide a tone that new guitars can't often produce at a price that won't break the bank.
"They feel nicer," notes popular song-writer and musician Dallas Green. "They just feel like there's a story already in them that you can kind of get out as opposed to a shiny new one."
Green, who brought his 1976 Gibson 355 into Capsule Music, represents the consumer who is more concerned with playability than pristine conditions and market value. He wants an instrument that sounds good and looks good, but he's not about to lock in a vault and wait for the value to increase.
"I've always got my eyes open...If I see something I like I'll trade in something. New ones just don't feel the same, they feel sticky and shiny, it's just not for me."
Rumblings of a vintage guitar downswing don't concern Kesper that much. He realizes that the high end collectors and the players are living in two different worlds, and as long as there's more people interested in playing, rather than investing, his business will continue to thrive.
"If you want a (vintage) guitar to play, chances are you're not going to get a mint condition guitar to play," Kesper concludes. "There's maybe a handful of people who will spend $100,000 on a guitar."
michaelt@citytv.com