Dear Terry: Steinway has always has a yearly price increase (around 6% I think) to constantly inflate the value of past Steinways. When I was selling Steinways in the late 80's, a B sold for about $40,000. Currently they are running about $54,000. That's quite an appreciation of 'price', not value. I give performance pianos a lifespan of 60 years to determine value (many have lives longer then that, but as rule of thumb, 60 years on average is realistic). After sixty years, the instrument is worth less then 10% of a comparable new piano. If the piano is 30 years old, half it's 'life' is over, so it is worth half of what one (or a comparable one) sells for new. An example would be a Bosendorfer Imperial that sold for $75,000 twenty years ago. A third of it's life is over, so it's worth 2/3 of what one sells for new. A new Bosendorfer Imperial sells for about $160,000, so the twenty year old Bosendorfer is worth about $101,000 retail, before you subtract reconditioning costs, over-all shape of the instrument, and shipping. That Steinway that sold for $40,000 ten years ago has lost one-sixth of it's value, so is worth 5/6 of the price of a new one ($54,000), or $45,000 retail (before subtracting costs of repair, etc...). The piano's retail sales value is inflated only because of the yearly 6% price increase. The crux of the problem as I see it is that the pricing of a Steinway is based on a guaranteed yearly increase. In ten years, a Steinway B will sell for more then $60,000. Those who invested in a Steinway will still see an 'increase in their return', but the sheer numbers of Steinway B buyers will dwindle. After selling expensive pianos for many years, I've found that the market will only supply so many big purchasers, and as the prices go into the stratosphere, sales of these treasures tend to happen less and less. Then what? Devalue Steinways to increase sales, or continue boosting prices to increase relative value? As Shakespeare said "...ah, now there's the rub!".
This PTG archive page provided courtesy of Moy Piano Service, LLC