Friday, September 16, 2005

Dust Settling....

So the dust is settling from some of the Auctions (Stout and NETTE) and we'll see what kind of magic happens this weekend at the Ralston Auction. Heading into York and the holidays it looks like there are a pantload of auctions that are about to happen not coincidentally right before Christmas.

So what did we learn from this round? Well, the prices seem to be in lockstep with the outrageous prices people are asking for their homes. Yes, I think quite a few folks that are selling their homes are out of their mind. Take a $10,000 piece of property and slap $50,000 worth of home depot building materials on it and you have a house for $900k. Please.

Now I don't want to disparage all auctions. Matter of fact it isn't auctions at all that I am tired of. It's the transaction garbage that the hobby has seemed to take on. Money has always driven toy trains, this isn't something that happens for free. It's commerce. But I have watched a steady and gradual progression where even refurbs are being treated like they are the friggin crown jewels.

Here are a few things that are bugging me:

1) Engines that cost more than $1000.
2) Sets that are not completely accurate to original (in any gauge) that cost more than $1500.
3) Dealers that think less than original sets should be sold for more than $1500. I've noticed that $1500 seems to be a favorite number in the train world. I guess the value of a train is somehow related to the lowest down payment someone can make on a new car that gets great gas milage.
4) eBay sellers that are just out of their minds.
5) Dealers that are TCA members and eBay sellers and are out of their minds.
6) People that sell trains but don't actually play with them.
7) People and TCA members that are treating trains as investments.

The last one really bugs me because it means that a beautiful train is getting pulled off the market and deposited in a closet for appreciation purposes. It's a fickle and dumb investment that shouldn't be made. There are a thousand dufus' that will argue one way or another (trains outperform the stock market, they are low risk because they can be readily sold and usually don't lose value, blah blah blah). How many people spending $70k for an engine or $75k for a station are going to play with them?

I have poured over years of TCA Quarterly's and I have read arguements on both sides. But it seems like the last few years has exploded collectors in certain markets and the prices are outrageous. And most of the products suck (either on the train table or on eBay).

Here's something to consider: in a few home markets (like the area I live in) there is more supply than buyers. The supply has gone up substantially and the realtors are trying to explain to sellers that buyers aren't going to pay a ridiculous premium for a *%&#$ house (you know, the one that looks like Home Depot exploded). It's gradually flipping to a buyers market.

Some would argue that we have been in a buyers market for toy trains for quite some time. Especially with competition from Lionel and MTH. With less people entering the hobby and far more exiting, how long do you think before the standard gauge market flips to a buyers market?

Marc

1 comment:

Mike C. from Indiana said...

Hi,

I came across your blog from a reference on the O-Gauge Railroader forum. I think to a certain extent a buyer's market already exists in standard gauge. Anytime MTH brings out a new reproduction, the originals take a big hit in terms of price. I have seen it with the 10s and 384s especially. Unless the original is in really, really good shape, the new versions are much better in terms of condition, price and what they can do. I have the 384 freight set MTH set and I would never want an original. Any of the "rare" originals such as the 515 Shell are being made again. The only standard gauge holding good prices are what Mike has yet to make, and who knows when he will do that.