During the free money era of covid, people took their free money and rushed out and bought their dream guitars. During that time, the value of used instruments more than doubled and it wasn’t uncommon for a new offering from Gibson or Fender to be back ordered 6 months or more. The numbers do not lie, more guitars were sold during covid than at any other time in history. Hurrah!
For those who do not know, a plain old Gibson Les Paul Standard new is $3000 and as these instruments age, they only go up in value. . . . well, maybe not anymore.
I’ve noticed in FB Marketplace that people are selling used instruments for 50% off of what they normally sell for. Case in point, I purchased a 1991 Gibson Les Paul 40th Anniversary Limited Edition (only 300 made) for $1800 whereas the price should have been $5000 or more. As a matter of fact, I’m buying guitars like hotcakes because I’ve never seen such a rush as people practically give their instruments away.
So, I go to Guitar Center on Sunday because I want to see if anything interesting is in the store and the place is packed. It isn’t packed with people buying instruments but people selling instruments. Every inch of wall space was packed with high-quality used instruments. I’ve never seen anything like it and neither had one of the clerks as I overheard her telling her manager that she was buying 3 items for every item that she sold. Crazy.
You might be saying, “So what?” but you’ve got to understand that if you are selling a guitar then Guitar Center is your very last option. Guitar Center will give you far less for your used instrument than any other option outside of a pawn shop. You don’t sell your instruments there unless you need cash fast and are desperate.
A musician that worked hard and toiled to save for a $3000 instrument isn’t going to take a 70% haircut for no reason yet people are doing exactly that right now.
Guitar Center is the Canary in the coal mine and I expect similar crashes to occur in the used car market, housing and, of course, your IRA’s & 401ks – they won’t escape any of this.
The free money is gone now, Uncle Sam has to borrow money just to pay the interest on the money it has already borrowed. All of the banks are insolvent. Buckle up.