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We saw rapid growth in guitar prices between 2013 - 2016 as people looked to divest into alternative, real assets. Last year the guitar market remained relatively flat.
To help make sense of the guitar market, we’ve put together 5 indices alongside guitar experts and financial experience. These indices are similar to stock market indices like the S&P500 or FTSE100, for example.
To collate the indexes we use values for the top collectable guitars from each manufacturer (using mint condition values). Each index has a yearly average of the guitars that make up the index, indexed back to 2012 = 100. Our VGP50 index is a collection of the top 50 guitars that make up the Fender, Gibson, Gretsch, and Martin indices.
In 2018 the Fender index dropped by -6 points (-6%) from 2017 to 96 points. Compare this to 2016 which commanded the highest prices for the top rated Fenders (104 points), and in 2014 the lowest prices (95 points). In 2019 we expect the index to again fall in value, probably below 95 points, with Fender’s proving less attractive to investors.
In a year where rumours of Gibson bankruptcy loomed, the top rated Gibson guitars performed well gaining +3 points (+3%) since 2017. Since 2012 the 13 Gibson guitars covered in this index have risen in value by 24 points (+24%). Values increased most between 2013 and 2015 (101 points to 118 points). Since 2015 the yearly growth rate has been slowed in-line with the low interest rates currently set by many central banks around the world. We expect the index to grow at a similar rate over the year given current market conditions.
Our Martin index is by far the most erratic of the four manufacturers indices we publish. This year has seen some growth for investors in top-end Martin guitars with values up about 5% at 105 points. This is a record for the index which at its lowest in 2016 measured below 100 at 97 points. Since then the index has rallied. We expect the growth to taper slightly moving towards 2019 as investors pull back in line with the other indices.
Quite the reverse of the Martin Index, the Gretsch has performed badly for the past two years. The index dropped to 99 points (-1%) from 2017, and over 3% since its high in 2016 at a modest 102 points. Not all guitars have performed badly though. The 1962-1964 Gretsch White Falcon Stereo (6137/7595) (Double-cut 6137) has continued to attract higher prices year-over-year since 2012.
Two indices rose (Gibson and Martin) and two fell (Fender and Gretsch) leaving the VGP50 static for the third year in a row at 106 points. Overall, high-end guitars remain a safe asset class. We expect some financial turmoil in traditional asset classes over 2018 which might see more people divest into guitars, but it might take some time before we return to very high returns seen in the late 90’s and early 00’s.
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