Piano Value Appreciation

[Clyde Hollinger]

Terry,

Maybe the Forbes quote would have been more accurate if it said, "the retail
price of a new Steinway concert grand is now 200% of what it was ten years
ago."  I could believe that.

For what it's worth:  A local school bought a new Steinway B (complete with
Teflon bushings) in 1979 for $11,000 (list price was $14,000).  The price in the
Fall-Winter 2000-2001 issue of the Ancott subscription puts the current price at
$53,900.

As far as investments go, if one would have invested that $11,000 in the stock
market 22 years ago (in 1979) and averaged 10% increase per year, s/he would now
have $89,543 (taxes not figured in either example here).

I can easily understand how one might buy a fine Steinway for its musical
qualities.  I also believe that a new Steinway will hold its value better than
nearly all other new pianos.  But strictly as an investment, I would put my
money somewhere else.

I'm glad you're feeling better.  <G>

Regards,
Clyde

Farrell wrote:

> Be forewarned - an element of rant follows:
>
> I am truly confused. The marketing department at Steinway and Sons have an
> interesting web page that "explains" the investment value of their pianos.
> It can be found at:
>
>   http://www.steinway.com/html/showroom/invest.html
>
> It seems they leave out a few details in their examples. I am simply trying
> to understand what exactly they are saying. (Oh, OK, a little venting also!)
>
> "According to Forbes, over the past ten years, the retail value of a
> Steinway concert grand has appreciated nearly 200%."
>
> What does THAT mean? The price of a D has doubled? What did a D cost in
> 1986? If I bought a new D in 1986 for $70,000 I should expect to get
> $140,000 for the same piano in 1996? (I don't think so.) Would it be OK to
> have played it over the last ten years? What on earth does this mean? I know
> it is the American way to mislead, but is it OK to outright lie in Marketing
> material?
>
> "The fact is, the appreciation of Steinway pianos is even more impressive
> when you look past the previous ten years - and take an historical look at
> appreciation over the past few decades. The numbers are nothing less than
> remarkable: Today, if the owner of a vintage Steinway grand decided to gauge
> the value of his or her piano on the open market, it is likely that the
> piano would command a price 4.3 times higher than the original retail cost."
>
> The little chart provided indicates that a S&S made before 1900 is worth
> 13.6 times what it was worth when it was made. Are they just taking into
> account inflation? Are they talking about values in real dollars? What did a
> B cost in 1895? About $4,800? (I just divided $65,000 by 13.6) I would guess
> that might be a bit high. Is this all they are pointing out - that there has
> been inflation over the last 100 years? Or are they trying to say that a new
> B bought in 1895 (let's see - salvage value for a B - let's be generous
> here - $10,000 divided by 13.6 equals $735.29), used for 106 years only cost
> $735.29 when new. That may be about right. Well big deal! What did a B (or
> whatever model) cost at the turn-of-the-Century (the one before last).
>
> "By way of comparison, a Steinway piano outperforms such symbols of luxury
> as a Mercedes Benz."
>
> What kind of crap is this? I own a Mercedes. It cost about $35,000 when it
> was new in 1983. It has been lovingly care for. I am the second owner. It is
> likely worth $5,000 now (might even be a tad less). La-dee-da. A Steinway is
> a better investment than a Mercedes? Is this not akin to saying that a
> loving marriage is better than a sharp stick in the eye?
>
> Feeling a tad better - but I would appreciate any level of explanation from
> someone - especially numbers.
>
> Terry Farrell