This is a comparison between two pianos representative of those that were purchased in 1986.  These piano examples are constructed from actual sales figures and retail prices of pianos bought and sold during the years between 1986 and 1999.   The prices are "Average Suggested Retail", approximately a 50% margin.  (i.e. the dealer's wholesale would have been approximately 10,655, which makes the average suggested retail at a margin of 50% equal to $21,310.

 

    
    The New Steinway 
 		    
    1.

Is a 1986 model L, Size 5'10 1/2", purchased from a piano dealer in the San Francisco Bay Area in 1986.  
 

    
    2. Is satin ebony with a classic style case.
 		    
    3. It has a wet-sand cast plate that was done in a non-Steinway foundry in the U.S. (The original Steinway foundry was closed prior to 1986)
 		    
    4. Was brought up to the Piano Finders Superior Standard for touch and tone by the owner after purchase.  
 		    
    5. It has been tuned every 4 months the first year, every 6 months the years after, and has had voicing of the hammers and strings each year.  It was regulated again in 1996 and all adjustments were made to bring it up the the Piano Finders Superior Standard for touch and tone again at that time.
 		    
    6. The piano has maintained its structural integrity and has not needed any warranty work. 
 		    
    7. The piano is a Superior example of New Steinway model L's built in 1986.
 		    
    8. The yearly values represented on the chart come directly from the trade records we have kept representing the wholesale and retail prices for new pianos each year.  The margin is a consistent 50% on all figures.

 

    
   

The Vintage Steinway

 

    
    1. Is a 1910 model O, Size 5'11", purchased from a broker in the the San Francisco Bay Area in 1986. It was rebuilt and refinished to the Piano Finders Superior Standard immediately prior to sale. 
 		    
    2. Is satin ebony with a classic style case. It's cabinet has more detailing on the legs, music rack and pedal lyre, in addition to having a molding strip around the bottom part of the cabinet body.
 		    
    3. It has a wet-sand cast plate that was done in the original Steinway factory.
 		    
    4. Was brought up to the Piano Finders Superior Standard for touch and tone by the owner after purchase. 
 		    
    5. It has been tuned every 4 months the first year, every 6 months the years after, and has had voicing of the hammers and strings each year.  It was regulated again in 1996 and all adjustments were made to bring it up the the Piano Finders Superior Standard for touch and tone again at that time.
 		    
    6. The piano has maintained its structural integrity and has not needed any warranty work. 
 		    
7. The piano is a Superior example of Vintage model O's rebuilt in 1986.
 
    8. The yearly values represented on the chart come directly from the trade records we have kept representing the wholesale and retail prices for vintage pianos each year as compared to new Steinway pianos.
 		    
   

Why does the new Steinway piano price drop so dramatically after purchase?

 

    
    1. There is always an immediate depreciation of a piano when it goes from the new to used market.  There are a certain group of buyers who prefer new to used and once a piano has left the dealers floor, the title has been transfered and it has been used by a private party, those who only want a new piano are not interested the piano which has now become used.   
 		    
    2. The now "used" Steinway, if put on the market immediately, has to compete with the new pianos.  There is no scarcity of new Steinway L's.  If the buyer, now owner, asks the dealer to sell the piano for them, the dealer would not usually be willing to give the owner a net for the used piano which is greater than they would pay for the wholesale cost of a new one.  The wholesale cost is approximately $10,655.  Thus, $10,500 would be an appropriate price fro the dealer to give an owner for their used piano if it is in "like new" condition.
 		    
    3. It the owner wants to sell the piano on their own, without the aid of a dealer, then they are working against several disadvantages.  First, the warranty is non-transferable. So the used piano, when put up for sale, will not have a manufacturer's warranty.  Second, the private party, unlike the dealer, does not usually have a selection of pianos for sale in a convenient location, available 6 days a week for a buyer to stop by and see.  The owner is selling the piano from their home.  Many buyers are uncomfortable going to private parties homes to see a single piano.  So the buyer deciding between new and used would want to see a significant difference in price between the used piano and the new piano to compensate for these factors.  
 		    
    4. If an owner wants to sell the piano on their own, and advertises it in the paper, often times dealer will dissuade potential buyers from buying the private party piano.  The dealer may even discount a new piano to make it more competitive with the used piano, in order to get the buyer to buy from them and not the private party.  In addition, they can usually offer financing, moving, tuning, warranty and other benefits which will sway a buyer to buy new instead of used.  This puts the owner selling their used piano at a disadvantage.  Usually, only a dramatic reduction in price can give a buyer enough incentive to buy a used piano that is "almost new".
 		    
    5. If the owner is trying to attract buyers who will only consider used pianos because they do not like the new ones, then they are at a disadvantage because the 1986 piano is much less attractive to this type of buyer than a Vintage piano built before 1940.  Many technicians and professional pianists feel that the Vintage pianos, if properly restored are superior to the Steinway's being produced today.  It is not my purpose to get into a discussion of the technical differences between the new and vintage pianos or to make judgments as to which are the better quality in this analysis. I am primarily interested in how popular opinion has affected the marketplace.  This perception is universal enough to give the "almost new" pianos less appeal in the marketplace than a rebuilt refinished vintage piano of the same size. 

 

    
   

Why does the Vintage Steinway NOT depreciate in value the day after it is purchased?

 

    
    1. There was and continues to be a scarcity of quality vintage pianos on the marketplace that are rebuilt and refinished to the Piano Finders Superior Standard.   There are usually 3 or more buyers for every piano in this condition that is available.  Buyers who understand and appreciate the benefits of buying a Vintage Steinway are usually willing to travel, go to a private parties home and also buy a piano without benefits, rather than not be able to find one at all.  At any given time, a buyer might have to wait 9-12 months to find one available for sale.  So, when one becomes available, they are likely to buy the piano wherever they may find it, rather than pass the piano up and wait for another one to become available.
 		    
    2. This gives the private party a distinctive advantage in selling their piano in the used market.  What they are selling is not only scarce, it is unique.  What the dealer does with the new pianos, does not affect them as much as it would if they were selling a piano that was "almost new" and so similar to the new ones available, that they cannot claim it is unique.
 		    
    3. Of course, if a private party where to ask the broker to sell the piano for them, they would probably need to take 30-50% less than what they paid for the piano.  The broker, like the dealer, needs to make a profit from every transaction and is not motivated to list and sell a piano without getting paid.  But, the reason that I did not depreciate the cost of the Vintage piano on the chart above is because the owner of this piano simply does not have to sell the piano through a broker to receive the price they paid for it.  It is likely the broker and dealer have nothing on their showroom floor that is like this piano.  So when the owner goes to sell their piano, they can realize full price because of its uniquenes and the number of buyers willing to pay the price.

 

    
    Why do both the New and Vintage Steinways level out in price at the 10th year?

 

    
    1. One of the things that affects the price of a piano at it's 10th year is that the piano passes from one marketplace to another.  The largest group of potential buyers for an "almost new" or "recently rebuilt and refinished" piano come onto the market asking for a piano that was either built or rebuilt less than 10 years ago.  Although I personally do not agree that there is a measurable difference between a piano that is 10 years old and one that is 11 years old if both have been properly maintained, I have encountered enough buyers with this mindset to recognize the impact on the marketplace.  However, I have also recognized that if the buyer can be shown that the piano is in superior condition by an inspection from a qualified technician their fears about buying something less than 10 years old are easily abated.   Some buyers don't want to be educated or to go into the technical details and for these buyers the 10 year mark is significant.
 		    
    2. I am assuming that at the beginning of the year 1996, the pianos were both starting to sound and feel differently because they needed about $1,000 to $2,000 of touch and tone work to bring them back up to the Piano Finders Superior Standard.  At the end of 1986, this work was done, and the pianos continue to climb with the overall marketplace because their condition is superior.

 

    
   

What factors should I consider if I am using this analysis to better understand the current marketplace?

 

    
    1. That piano prices vary based upon brand, size, condition, cabinet style and supply and demand factors in a given area.  Because of this, it is wise not to assume that what is true in the past will always be true in the future, or that what is true for a couple of pianos will be true for all pianos.
 		    
    2. Most private parties do not keep their pianos well maintained. They are likely to know that a piano should be tuned regularly, but they may not recognize that the piano needs to have other adjustments done every few years or so to maintain the touch and tone, even if the piano is not played very much.  Felts settle, string heights change, hammers develop grooves in them.  All of this affects the performance of the piano.
 		    
    3. Not all rebuilding and refinishing jobs are of the same quality nor will they be all as durable as those that match the Piano Finders Superior Standard.  Some piano upgrades are only partial ones, or they use inferior parts and workmanship.  But, because the piano brand may be well recognized, a seller may be able to sell the piano for a high price to a buyer who does not have a qualified technician check the piano out.
 		    
    4. Not all new pianos are alike.  Pianos are still built by people and made with wood, felt and wire. Because of this, the pianos coming out of the factory vary.   American manufacturers like Steinway leave the final touch and tone upgrades for a new piano up to the expense of the dealer.  In a market where buyers do not ask a lot of questions and do not think of having a technician inspect a new piano, the dealers will often not do the upgrades to the piano because they find it is not necessary.  Since these upgrades can cost between $500 to $2,500, this saves the dealer a significant amount of money.  But, a buyer who expects the piano to already be at the Piano Finders Superior Standard, just because it is new, may find an unpleasant surprise down the line.   If a buyer knows that work needs to be done to a piano to bring it up to the Piano Finders Superior Standard before they make the purchase, they have some leverage in the negotiations to get the dealer either to discount the price of the piano so the buyer can have a technician of their choice do the work, or to have the dealer pay one of their technicians to do the work and include it in the price.  If this negotiation does not take place before the piano is purchased, the dealer has no obligation to do this work because it is not considered a part of the warranty, nor is it a mandatory dealer responsibility.
 		    
    5. The Vintage piano market offers literally hundreds of potential variations of cabinet style, wood grain patterns.  There have been over 11,000 brand names of pianos build in the past 100 years and almost every furniture style is represented in the various models that have been released.  The New piano market has less than 40 piano manufacturer's left and the cabinet styles and pretty wood grains available are much more limited. 
 		    
    6. Vintage pianos for sale in superior condition are much harder to find than new pianos for sale in superior condition.
 		    
           

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