View Full Version : Gun bubble?
From looking at the value of firearms on gunbroker, I am seeing a sharp decline in several areas. The Steyr AUG and MSAR rifles are now deeply discounted. Barret M82A1s have dropped by at least $1000 on average. There also seems to be a lot more inventory out there than there was previously. The ACRs have been dropping in price as well.
Where I am surprised to see the drop is also in the Colt Green Label market.
I am sure the state of the economy is a major factor, but even rare and collectibles are popping up for sale at bargain prices. I've seen things up for sale lately that I haven't seen for sale very often like FAMAS, PSG1s, and various other oddities.
Maybe I'm just reading into things but looks like it is definitely a buyers market right now. But thats not so good for the industry as a whole.
ForTehNguyen
08-22-10, 09:02
you cant really have a bubble when it wasnt inflated in the first place. Just state of economy
Army Chief
08-22-10, 09:46
Likely true. Although the margins in the gun business are tighter than many seem to realize, we did go through a phase where full retail -- or even higher -- prices were the norm, simply because of scarcity. (Whether that was real or imagined probably depends upon what you are talking about, and at what point along the way.) Whatever the case, it is good to see prices coming back down, if for no other reason than it tends to indicate that dealer inventories have come back up.
AC
Business_Casual
08-22-10, 09:56
I think a bubble has to have some organized group intervening in the market in order to be created - and called a bubble. Can we agree the terms? If so, there is no gun bubble that I am aware of, but I can see how it would be perceived as such.
Federal Reserve = money bubble (still building)
Fannie Mae/Freddie Mac = housing bubble
Wall Street Speculators = any number of bubbles, from oil to derivatives
Et al.
Yes? No? Comments?
The new, kinder gentler B_C
Makes sense, hadn't thought of it in that regard. I'm just surprised at how much some of the prices have fallen.
Interestingly, I don't see any considerable decline in ammo prices. I can find "deals" here and there and availability is back to where it used to be, but on a whole prices are still high.
VooDoo6Actual
08-22-10, 10:44
Yes I have seen it for the last few months as well.
With 27% housing market price DROP and well over 16 Million people unemployed it's a key grasp of the obvious....
GermanSynergy
08-22-10, 13:05
Great for buyers, not so good for retailers or private sellers.....
"bubble" is an analogy for a market that's inflated by excessive debt... once the dog catches it's tail, the whole thing deflates and the "bubble pops." what we're seeing with guns isn't a "bubble," because those guns owned and being bought and sold aren't mortgaged... they're owned outright.
instead, what we're seeing is just market fluctuation.
There was a huge amount of buying that began before the last presidential election and followed it for a while. This soaked up a lot of demand since many people who were considering buying military style semiauto weapons, or buy additional ones have done so.
In the case with the MSAR, it was a new gun, so demand was bigger for it at one point when the supply was mor elimited. But as they built more of them supply caught up with demand and many of the people who wanted one bought one.
I think the MSAR hurt the Steyr AUG market somewhat, but also Steyr started producing AUGs in the US at a lower price than the used AUGs were selling for so that reduced the demand for them and their prices subsequently dropped.
I'm a little bummed on the AUG/MSAR price drop. I have several, all of which I paid quite a bit more than current market value. I don't plan on selling any of them, or my 82A1--but I am sensitive to the fact that out of my entire collection--those two platforms have taken the biggest hit. I wish I would have tracked down the 107 instead of the 82A1, the 107's seem to be holding steady. The compact 82 also seems to retain it's value better.
The ammo for the .50 has actually appreciated from when I purchased. Barrett M33 Ball seems to be hard to come by.
FromMyColdDeadHand
08-22-10, 14:32
Things definitely seem to stay on EEs longer than before.
As to the definition of bubble, I don't think debt is the driver as much as a symptom. To me a bubble forms when people speculate that prices will be higher in the future, which would make them more likely to take on debt to buy the asset. The bidding of the prices up fuels the thought that prices will continue to rise. At some point the prices become unsustainable and people try to take profits, driving down the price. Obviously if a lot of debt is used and credit tightens, that will burst a bubble too.
I think the market was bubbly in that people speculated that certain guns would either be unavailable or restricted.
Couldn't be caused by the economy because I read today in the newspaper that the economy is doing really good.... :sarcastic:
...also read that the true unemployment rate is 16+%
Reckon people are in a bind and are getting what they can for their stuff, which drives the prices down for everybody...supply and demand.
I just hope the quality (expensive) makers make it through all of this.
.
you cant really have a bubble when it wasnt inflated in the first place. Just state of economy
You don't think that the gun rush that was a result of Obama getting elected inflated prices?
Did I miss something?
You don't think that the gun rush that was a result of Obama getting elected inflated prices?
Did I miss something?
thats what caused this last rush on guns and ammo.. but what we're talking about the dynamics of the market, not what caused them.
ForTehNguyen
08-23-10, 07:44
bubbles grow from cheap money and debtand takes years. Gun prices weren't fueled by this. Theres a difference b/t a bubble and a temporary market swing
montanadave
08-23-10, 08:04
While it's difficult to quantify the impact "speculators" have had on firearms and ammunition prices, there were a substantial number of folks who allocated financial resources for firearms purchases solely as an investment and, having seen that investment fail to appreciate in the desired manner, are now choosing to divest themselves and cut their losses.
Remember when?
http://online.wsj.com/article/SB123984046627223159.html
The departure of the "make a quick buck on guns and ammo" crowd, coupled with folks that just need the cash during tough financial times and manufacturers ramping up production to meet increased market demand, have all likely colluded to produce a buyer's market.
Nathan_Bell
08-23-10, 10:23
You had a lot of folks who were speculating during the run-up and post election period. A lot of them were buying on credit card or equity draws.
The demand dropped from those insane heights, the market was heading towards equilibrium and all of these speculators realized they were becoming upside down on the guns they bought. They tried to move them. This glut of guns drove the market well below where the post election swing should have left the pricing. The secondary market of people trying to unload is impacting the primary market hard enough to drive it downward.
A bubble inflates the market to massive heights and then pops leaving the value below where steady state would have had the value. That is exactly where we are now at.
You can argue how to define bubble all you want, but that does not change the fact that, in general, firearm values are currently below where they were before the '08 election's CF.
In general, firearm values are currently below where they were before the '08 election's CF.
Agreed, but only with firearms that sold unusually well (and therefore had their price increased/inflated for gouging purposes) during the Obama boom, typically AR-type rifles and "tactical" pistols. Your regular, average, seemingly "ban-safe" pistols and rifles are the same price, not over-abundant, and selling the same as they always were. Take a look at Remington 700's, Marlin .30-30's, and a lot of the name-brand traditional revolvers - most are the same price if not MORE expensive now than in '08.
ForTehNguyen
08-23-10, 11:54
gun prices didnt even inflate that much during obamamania and didnt outpace the ability for people to pay for them. Sure some tried to gouge. Stuff was just hard to find and took forever to get. Prices may have inflated for certain firearms, but the entire industry as a whole was no where near a bubble. Nobody went bankrupt or had to downsize either because they bet wrong on Obama-rama.
Heavy Metal
08-23-10, 12:06
Interestingly, I don't see any considerable decline in ammo prices. I can find "deals" here and there and availability is back to where it used to be, but on a whole prices are still high.
Ammo was the last to go up. It will likely lag the market.
ForTehNguyen
08-23-10, 12:14
ammo will stay up and keep going up because of metal commodity prices. Yay inflation.
Nathan_Bell
08-23-10, 12:16
gun prices didnt even inflate that much during obamamania and didnt outpace the ability for people to pay for them. Sure some tried to gouge. Stuff was just hard to find and took forever to get. Prices may have inflated for certain firearms, but the entire industry as a whole was no where near a bubble. Nobody went bankrupt or had to downsize either because they bet wrong on Obama-rama.
Bull, to all of your statements.
Most guns are sold at about 15% margin in gun shops, about 10-12% online, and most MSRP pricing is 27%. Most shops were pricing at or above msrp, if they were smart, during the silliness.
Many of the other shop owners I spoke to were doing a lot of credit card business. The price inflation outpaced people's ability to pay cash for the guns and at certain points their ability to buy them on credit and pay off the purchases in a timely fashion.
The only firearms that stayed low or dropped in price were fine grade shotguns, revolvers, and bolt guns. Considering those make up about 2-3% (IIRC) of the firearm trade, it is safe to say that the market as a whole did inflate.
I know of at least 5 small to medium sized gun shops that either went tits up or regressed to only having family working at them due the the, as you called it, Obama-rama.
On the mfg side Charles Daly went TU.
ForTehNguyen
08-23-10, 12:27
you cant have a bubble on $1500 items which are still relatively affordable. Its nowhere near the same lines as a $150k house going up to $450k and then taking a gigantic ARM loan on the already super inflated price.
Many online sellers sold at their normal price just the backlog was massive. It wasnt inflated everywhere. If someone paid MSRP, theres a fool born every second. I was able to find a lot of stuff for normal prices, just had to wait longer than usual. Hardly a bubble.
5 shops gone directly due to obamamania? They were probably hurting long before that just like Charles Daly.
I don't get how people think that capitalism in action can be considered some sort of artificial "bubble." It's supply and demand, people.
Just because my favorite brand of taste-ee-o's cereal featuring Twilight movie promotions becomes overstock and goes on clearance doesn't mean that there's a breakfast cereal industry bubble. It's supply and demand and it's GOOD for the economy.
They were probably hurting long before that just like Charles Daly.
Charles Daly is gone because they charged too much and offered too little. They were selling at Noveske prices while offering Colt-like business and products. I'm not saying they were bad in any way, it's simply they didn't offer enough to justify the cost or their existence, obviously.
EDIT: In regards to their AR's, anyway.
Heavy Metal
08-23-10, 13:21
ammo will stay up and keep going up because of metal commodity prices. Yay inflation.
Metals make up a a minority of the cost of ammo. That myth was debunked years ago.
Supply and Demand and Labor make up more of the cost factors.
The price of copper is lower today than it was over 4 years ago.
The granddaddy of all bubbles: tulip mania
http://en.wikipedia.org/wiki/Tulip_mania
At the peak of tulip mania in February 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman.
It is generally considered the first recorded speculative bubble (or economic bubble), although some researchers have noted that the Kipper- und Wipperzeit episode in 1619-22, a Europe-wide chain of debasement of the metal content of coins to fund warfare, featured mania-like similarities to a bubble.
you cant really have a bubble when it wasnt inflated in the first place. Just state of economy
Yep.
People cashing out their toys in a hard economy. Especially those who bought them during the Obama scare and haven't seen the ban yet.
But it really is an excellent time to buy....IF you have the money.
Reloading supplies have returned to normal, but I keep waiting for those individuals who so made reloading supplies go dry for months to put their supplies up for sale...
Yep.
But it really is an excellent time to buy....IF you have the money.
That is where a LOT of people screwed themselves. "If you don't have the money, you don't need it". Buying on 18%+ interest is not very smart in my opinion, especially for investment! ONLY FOR EMERGENCIES.
I'm happy to see that supply has finally caught up with most of the demand - hooray! Time to introduce more people to shooting.
I'm a little bummed on the AUG/MSAR price drop. I have several, all of which I paid quite a bit more than current market value. I don't plan on selling any of them, or my 82A1--but I am sensitive to the fact that out of my entire collection--those two platforms have taken the biggest hit. I wish I would have tracked down the 107 instead of the 82A1, the 107's seem to be holding steady. The compact 82 also seems to retain it's value better.
The ammo for the .50 has actually appreciated from when I purchased. Barrett M33 Ball seems to be hard to come by.
I wouldn't worry too much.
Sooner or later the economy will improve and gun buying and gun values will return to normal. They won't be Obamascare prices, but they will be normal.
And IF we get some kind of ban, the Obamascare prices will look like sale prices.
As someone who has been collecting since the mid 70s, and has collected through several bans, just be glad you have what you have. In 20 years you won't think twice about what you paid for them.
Army Chief
08-23-10, 21:16
In 20 years you won't think twice about what you paid for them.
An excellent perspective, and something I too have noticed over the years. It only hurts to buy quality once, and even then, only for a little while. Things aren't getting any cheaper, and in the long run, many of them may not even be available at all. The rifle you paid too much for last week could be worth twice as much in five years -- it's just the nature of this particular game.
AC
It's hard to tell who besides Charles Daly has gone or is going out of business.
Big conglomerates are running a large part of the firearms industry right now. Cerberus (who owned Chrysler) owns Remington, Bushmaster, DPMS, Marlin, H&R, NEF, Dakota Arms, ++. I can't imagine Marlin having been in a boom the past two years??
FN (Fabrique Nationale) owns Winchester and Browning.
If one of those companies are hurting, the other ones would prop them up, at least for a little while.
I saw a Remington 700 w/ a cheap Rem. Scope at Wal-Mart for $400. No telling what is plastic now but that's pretty cheap.
Cabelas had a big gun sale this past weekend. Guys that work there told me that all they sold were over 100 Mosin-Nagants at $100 each. Out of the 20+ modern guns on sale, they sold a few of each model.
The "bubble" was just supply and demand issue driven by rumors, assumptions, and speculation perpetuated by the internet. Little by little, you'll start seeing those guns come back on the market because of the high unemployment. There is going to be a pile of BM's & DPMS floating around in a little while. When that happens, new gun sales will drop even more.
This is why I said earlier "I just hope the quality (expensive) makers make it through all of this." I think it is going to get bad. Maybe that's the Lib's plan...?
.
An excellent perspective, and something I too have noticed over the years. It only hurts to buy quality once, and even then, only for a little while. Things aren't getting any cheaper, and in the long run, many of them may not even be available at all. The rifle you paid too much for last week could be worth twice as much in five years -- it's just the nature of this particular game.
AC
Yep, in 1983 I bought a HK 91 and HK 93 NIB for $350 each. That was quite a bit in 1983 dollars, keep in mind you could get an AR15 for about $250. As I was in High School that was about two months income to me as well. I thought I was ROBBED.
Today I feel much better about my purchase.
Well, during the upcoming lame duck session of Congress, I would expect to see some gun control legislation proposed, and possibly passed. I hope to be wrong. But if it does happen, expect to see the shelves bare again as people buy everything in sight and put all the makers deep into backorder status.
Yep, in 1983 I bought a HK 91 and HK 93 NIB for $350 each. That was quite a bit in 1983 dollars, keep in mind you could get an AR15 for about $250. As I was in High School that was about two months income to me as well. I thought I was ROBBED.
Today I feel much better about my purchase.
I just wish I would have had the sense to buy a HK91,93 for $350 in 1983..I was working, But instead, I bought a Mini-14 for $250...and I really thought I had something....:suicide:
FromMyColdDeadHand
08-23-10, 23:33
I just wish I would have had the sense to buy a HK91,93 for $350 in 1983..I was working, But instead, I bought a Mini-14 for $250...and I really thought I had something....:suicide:
Sounds like that burst your bubble... :D
Metals make up a a minority of the cost of ammo. That myth was debunked years ago.
Supply and Demand and Labor make up more of the cost factors.
The price of copper is lower today than it was over 4 years ago.
And it way higher than it was 5 years ago.
Rough numbers from LME $/tonne.
7-2010 6700
7-2006 7700
7-2005 3600
Raw material prices have something to do with the increases.
Anyone have an index for ammo prices over time. Be interesting to chart it versus copper.
ForTehNguyen
08-24-10, 07:20
cal guns had a graph of XM193, Q3131, XM855 prices:
http://www.calguns.net/calgunforum/showthread.php?t=43785
Powered by vBulletin® Version 4.2.5 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.