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Estonia Pianos
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I am thinking of buying a used Steinway A or a new Estonia 190, and it's important for me that whichever instrument I buy, it retains the most value.

Any ideas which is a better investment value? And why?


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Steinway


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Tell us a little about the A.


"The true character of a man can be determined by witnessing what he does when no one is watching".

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In addition to what Stevester asked, I suppose you might get a better answer if you told us what the purchase prices of the pianos will be in the first place. Also, it may help to know how soon you intend to sell the instrument-- a year, 10 years, 30 years?


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Originally Posted by Louis H. Bousquet
Steinway


it ain't so simple son.


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Per Apple - "it ain't so simple son."

Well said !!


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Monetary value? Musical value? Image value? Family value?

Sorry, this is kind of a pet peeve. Pianos shouldn't be bought as investments, because it's a loser every time.

Buy the one you love. It will give you more spiritual value than you can imagine.


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Confucian,

There are many parameters which will determine how a piano will retain its value.
One of the most important is ‘how much one is paying for the piano in the first place in relation to its wholesale value’.
When two new pianos are considered, it is easier question to answer, as long as a better definition of 'retaining value' is given.
For example, two pianos are being bought at the same time, but one cost 50% more than the other. If they both lose an equal 10% of their value, the more expensive piano will have lost 50% more in dollars...

We do have on our floor both Estonia pianos and Steinway pianos. We also buy both Steinway pianos and Estonia pianos.
If I were to purchase back a new Estonia piano that we sold 4 years ago, versus a used, reconditioned, or restored Steinway piano that we sold 4 years ago (we do not sell new Steinway pianos), we'll pay more for the Estonia in relation to its purchase price than for the Steinway.

Hence, in percentages, the Estonia retained its value better than the used/reconditioned Steinway, and in dollar terms (since the Estonia pianos we sold were usually priced below the Steinway pianos we sold), the Estonia fared MUCH better.

I would also wager that if someone purchased three years ago, at the average selling price in the nation at the time, a new Steinway model A , and a new Estonia 190 piano, and wanted to sell these now…well, he is likely to lose more on the Steinway both in percentages and definitely in dollars.

One reason is that actual selling prices of new Estonia pianos have gone up in price over this period of time considerably more than the ACTUAL selling prices of new Steinway pianos, and the used/rebuilt Steinway market is derived greatly from new Steinway piano prices.
While only a few years ago Steinway pianos were sold at almost no discount from the retail formula now used by Mr. Fine to calculate his SMP, we hear now about many such pianos that are sold at considerable discounts, and while these are not quite yet sold at the average margins acceptable in the industry, they seem to me to be heading this way.

The discounts offered on Estonia pianos, on the other hand, remained pretty much the same over the past few years.

When you consider VERY old Steinway pianos, your question can hardly be answered without inspecting the individual piano.
An older Steinway model A - 2 prior to restoration is likely to be sold nowadays for somewhere around 7K - 8K to dealers in our area. Pianos like this were sold for closer to 10K only a few years ago, but there was a considerable decline in the price of these over the last few years.
So when one is buying such a restored piano, he is no longer paying for the instrument itself, but rather for the restoration process. The restoration can be made on different levels, and at very different prices.
One may purchase such a ‘restored’ piano for 25K or 35K, and it is possible that the more expensive piano will be the better musical value, and also will keep its price better on resale.
Then again...it may not be the case...depending on the piano, situation, the restoration cost, overhead involved and other factors.

Regarding resale values of such pianos, say… 50 years from now…I personally think that the market shifts in a way that no piano would be worth full restoration already in a much shorter time period.

When I predicted and discussed on this board extensively a few years ago the what was then a coming decline in NY Steinway sales, I was met with objections in the spirit of: ‘what was in the past is what will also be in the future’.
However, today we can say with certainty that the decline that I predicted in NY Steinway grand piano sales was extremely conservative in comparison to the actual drop in shipments, and that the slowdown in sales that started long before the economy tanked is simply astonishing looking back over the past 5 years.

The decline in sales brought with it decline in actual street selling prices, and my belief is that neither production numbers nor retail margins for NY Steinway pianos will be the same as they were prior to the Internet age and the availability of information it provides, even when economic conditions improve.

All this doesn’t bode well for Steinway piano prices in the long run in comparison to the past 50 years, and the used/rebuilt market of such pianos is likely to follow.

Overall, things have changed and are changing rapidly in our industry over the past few years, and while to some salespeople/teenagers things may look very simplistic, the reality is, as Apple said, that they are not.
My 2 cents.





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Deja Vu! It appears to me that the authorized Steinway dealers in my venue are holding firm as for new prices of NY Steinway with that occasional 5% discount to piano teachers, members of of the opera club or ? They make you earn that discount. As of recent I have seen a turn for the better, economy wise in the highend piano market at least as for Steinway is concerned. I think the down economy had affected all the other highend piano manufactures moreso than Steinway.
I don't see Steinway filing bankruptsy as in the other competitive manufactures which we are all privy to. In the down times Steinway just cut production and still retains it's skeleton crew in restoration. With the temporary closure of Steinway restoration the market has picked up immensely for the higher end Steinway remanufacturing market.So....if a NEW Steinway A-II is still selling for over 60K give or take a few thousand,a high level remanufacture of a A-II is well worth 30-40K It still sounds like a better value to me. "Fair market value" reflects the NEW replacement value less depreciation. The level of the remanufacture has alot to do with value. Having facilitated 40-50 Steinway A-II over the years,one really can't salvage anything as for the A-II vintage core piano. The last year of production of a vintage A-II was 1913 so a complete remanufacture is in order hopefully.

Not knowing exactly what the Estonia 190 sells for new now,I will say this,in my venue it was not discounted all that much % wise so therefore an authorised dealer would not even think of allowing a high buy back in that a dealer would not pay more than wholesale price compared to a new one. It also holds true as for a Steinway dealer selling new ones in that they are sold at near retail also. You take a hit either way as for buying new.

I just took a preowned Estonia 190 as a tradein on a restored Steinway B. Believe me I and the client know exactly the monetary hit the buyer was willing to accept. Hey the Estonia is held in high reguards by many. I'm curious though,how much value do you think the Estonia core piano is worth when the time comes compared to that of a unrestored Steinway without speculating in the distant future. The formula is as known by most is "If the comprehensive restoration cost excedes the price of a new one it's value is 0.
That is my bias perspective grin

Last edited by pianobroker; 10/27/09 04:34 AM.

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Unless you lke both pianos equally or plan to sell them in a short time, I don't think the criterion of "holding the most value" should be high on your list. If you don't like them equally buy the one you like the most and forget about resale value.

Do you like them equally?

Do you plan to sell them? How soon?

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I'm afraid the answer is Steinway, at least around here.

I say this based on my experience just over a year ago when I had about decided to buy an Heirloom B (Steinway restoration) subject to the sale of my Estonia L190, then just 2 years old. I quickly discovered that my piano had dramatically depreciated and was worth less than half what I paid for it (if I could sell it at all and I got a good deal when I bought it). This, I'm sad to say, is the reality and is at least partly because, beyond the shelter of the Piano World Forums, Estonia pianos apparently enjoy very close to zero visibility in the market. Just about no one looking for a piano has ever even heard of them. The local resale market is basically Yamaha and Kawai with Steinway (and Steinway rebuilds) enjoying a tiny but healthy niche. Estonia just doesn't show up on the radar.

This may not matter to Estonia owners who love their pianos (myself included as I am no longer trying to sell it), but I am afraid it is the reality.


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You can't get around Ori's point that the purchase price defines the resale value. Get a very competitive deal when you buy and your depreciation will be less. Be an uninformed shopper, pay more than you need to, and naturally your depreciation will be steeper.

You also cannot escape Ori's point that percentage depreciation is different from real monetary depreciation. Buy a 15k Chinese uber-grand, sell it for 6.5k, and you've absorbed a depreciation hit of well over 50% with a monetary loss of 8.5k. Buy a 50k ????, resell it for 35k, and you've absorbed only 30% depreciation, but have experienced a monetary loss of 15k.

IMO, the entire Steinway investment promise rests on its ability to institute healthy annual price increases and find enough takers in the market to make those prices stick. If you're selling a large amount of production into institutional sales at discounts of 30% or more (as is reported by some institutional Steinway purchasers), are you really making your prices stick, or are you just sticking it to non-institutional purchasers?

Steinway's investment value chart shows on average more than a 55% price increase on their products between 1990 and 2000. This is followed by a 40% increase between 2000 and 2008. The effect of these collective increases is that the price of every model in the Steinway lineup (grands and verticals) more than doubled in that 18 year period. Anyone who buys a new Steinway today should be rooting for Steinway to be able to juice up the prices going forward in the same way that they have in the past few decades. It's built in protection against depreciation. Whether that can happen in the face of the world economy, slumping production figures, declining interest in acoustic pianos, and the Internet-enhanced consumer awareness that Ori mentions--that is a big question.

A fresh Steinway rebuild's value is based on the renown or obscurity of the rebuilder, the actual work done, and the limited warranty applied by the rebuilder. Once the purchaser decides to bring it back to market, it's just another old Steinway that's had some work done on it. It will be competing against more "fresh" Steinway rebuilds from the rebuilding mills. Rebuilders should also be cheering on Steinway's annual price increases since their livelihood depends on offering renewed Steinway products at prices that can make them a tidy profit while staying well under the asking prices of actual new Steinways.


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The answer to this question has to depend on what the price is now, what kind of rebuilding job was done on the used Steinway (if any), and the like. In my limited experience of assets generally, a used item will not depreciate as much as a new one almost by definition. If you buy a used, unrebuilt Steinway it will not depreciate as much as any new piano (including a new Steinway) simply because it will start out at a lower price point. Thus, its resale price will be closer to its price as a used piano because it is still a used piano.

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One quick point mention. If a restoration firm has continued on sucessfully year after year,I guarantee the rebuilds or remanufactures are better at present than 2 years ago,five years ago definitely ten to twenty years ago. Like in any trade one thrives to better his end product and efficiency whether through technology,material availability or flat out,ONE'S standards get higher. So...to me,an OLD or substandard restoration is not where you wanna be, in pursuing that preowned Steinway whereas it seems unanimous on which route to go.


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I do not want my post to be misconstrued as recommending the Steinway. I am not doing any such thing. This is for a very simple reason: I do not think that resale value is a very important criterion in a piano purchase. The question is whether you love the piano and can afford to buy it. Not whether it holds its value in terms of resale. I don't expect my piano to be "resold" until after I am dead.

I do not think that resale value should ever trump one's feelings about the piano itself. If all you care about is resale value, you should be investing your money in a "real" investment, not using it to buy a piano!

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Originally Posted by Dave Stahl
Pianos shouldn't be bought as investments, because it's a loser every time.

Buy the one you love. It will give you more spiritual value than you can imagine.
+1

In these uncertain economic times, it'd also be a good idea to not stress the budget for optional purchases.


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Originally Posted by Rank Piano Amateur
I do not think that resale value is a very important criterion in a piano purchase. The question is whether you love the piano and can afford to buy it. Not whether it holds its value in terms of resale. I don't expect my piano to be "resold" until after I am dead.

I do not think that resale value should ever trump one's feelings about the piano itself. If all you care about is resale value, you should be investing your money in a "real" investment, not using it to buy a piano!


Well, that's fine for you Rank, but the original poster makes it clear in his opening post that it is important for him. I can relate to that. I would never buy a piano without at least a passing consideration of its resale potential (how fast and for how much). I'm not into heirlooms that will outlive me.

We're all different. Maybe we should just accept that reality and answer the OP's question as stated rather than arguing with it.


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Originally Posted by FogVilleLad
+1

In these uncertain economic times, it'd also be a good idea to not stress the budget for optional purchases.



Since when is a piano an "optional purchase?" I don't follow confused


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Piano Broker,

It is possible that you have a narrow angel on the market since the vast majority of your business is based upon the sale of used and rebuilt Steinway pianos...and since you do not represent any brand of performance pianos.
If it was more diverse, I believe you would have had another perspective.

As I mentioned in my post, the decline in NY Steinway sales started before the economic downturn.

Here are some numbers for you:

A decade ago, yearly shipments of NY Steinway grand pianos from the factory were at about 2600 or even more.

In 2004: It was about 2,400.
In 2005: It was about 2,200.
In 2006: it was about 2,030.
In 2007: it was about 1,790 (the peak of the housing boom, and just prior to the start of this recession).
In 2008: it was about 1,500
In 2009, the first 6 month, Steinway reports a decline of 44% from the same period in 2008 for shipments of NY Steinway grand pianos.
However, since the last part of 2008 was quite week, and I think that many dealers felt, as you did, a pickup in overall sales during the past few months, but I would guess that their yearly decline from 2008 to be smaller by 20% or so over 2008 numbers.

The severe decline reflected by these numbers, by the way, occurred while the institutional division at Steinway seem to be doing rather well, so the decline in sales to the private market is possible to be substantially higher.
I personally think that while there may be some stabilization and even recovery to sales of Steinway pianos from the depth of this abyss in the next few years, we are not likely to see production again at the level of 2004 or 2005, unless it is accompanied by a considerable price adjustment.


I consider the decline in Steinway numbers, which is clear and evident in recent years well before this economic downturn, to be a part of an overall trend in which people familiarized themselves with other options, through the availability of information on the Internet, and take the time to see.
A decade ago the choice for high end pianos to most buyers in the US was a very limited one…and the only piano considered was a Steinway. They focus was to ‘select’ the right Steinway rather than to find the right piano…
This is no longer the case, and I believe that overall US sales of the manufacturers rated in Larry Fine’s ‘piano buyer’ guide in the same group as NY Steinway, or rated at a higher level, has considerably increased from a decade ago, while at the same time period Steinway sales more than halved.

As to your remark about ‘ not seeing Steinway going into bankruptcy as other companies’, it has little to do with number of NY Steinway pianos shipped.
‘Steinway musical instruments’ is a diverse company, with very capable financiers in control. The company not only is making and marketing band and orchestra instrument, have an on line music sales division, but also have the Hamburg Steinway factory, which is selling to different markets, and have other factories manufacturer outsourced products under the names Boston and Essex.

Theoretically, even if NY Steinway piano production were to completely stop, the company as a whole could be doing well. For example, during 2007, the severe decline in NY Steinway sales was offset by a considerable increase in sales of their Boston/Essex lines.

As for another and more different example, some may consider the most successful piano company ever to be Kimball, that went completely out of the piano business some decades ago to focus on the furniture business…and while they no longer produce pianos, they became at one point a billion dollar company…

Many of the manufacturers I’m familiar with have not seen decline in production numbers nearly as large as NY Steinway did during this economic downturn.
However, and more important, the number of high end piano brought to the US by these companies in most cases have increased dramatically over a decade ago.
The lesser known the company was in the US, the greater was the positive impact of the Internet, which leveled (somewhat) the playing field in terms of marketing budgets.

The better known and more recognizable names have almost all suffered sales decline in the US, with Steinway perhaps leading the group.
Steingraeber, for example, have seen yearly increases in production during the years 2006, 2007 and even 2008…and while 2009 numbers may be lower, they are likely to be higher than 2004 numbers.
A decade ago, the company brought far less pianos to the US than nowadays.

The questions are if during this economic climate, the weaker companies, who cannot withstand a 20% -30% decline in sales will remain standing, and once conditions stabilize, which companies will benefit from having less competition.
My gut feeling is that some of the stronger, but still less known to those who have yet to embarked on a piano search will benefit much more than the more know ‘brand names’.

If Schimmel for example, would not be able to get out of bankruptcy, I imagine that more of the consumers that would have bought their pianos would purchase other European pianos rather than NY Steinway instruments.

Overall, the declining number of NY Steinway sales from one side, and the increase in sales of European high quality pianos in the US over the past decade from the other side, changed the face of the high end piano market in the US, and I believe that the price adjustments we are likely to see over the next 10 years in ACTUAL selling prices are not going to bode well for NY Steinway in terms of ‘investment values’.

Last edited by Ori; 10/27/09 05:08 PM.

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This is a question difficult to answer by an Estonia dealer because it will be considered self-serving, at least to some:

However, these are some facts to consider:

1] In virtual all cases where we personally knew of these pianos having sold second hand, the original purchase price of piano had been fully recouped - in few cases the piano even sold for more...

This fact is based not only on the considerable price increases of the piano over time but its much better brand recognition on the market today - today alone we got 2 inquiries form out of town...

2] There is high probability the trend will continue based on 3 basic facts:

a] the limited amount of pianos made
b] The unstoppable weakening of the US $ versus the Euro
c] the ongoing upgrading of the piano plus new models coming out

The latter may well lead to further upgrading by Larry Fine in future, in which case Estonia could well end up in top braket.

In this case, the price increase of this piano will have to be quite considerable - something we dealers are not exactly looking forward to...

If the piano will 'not' be upgraded in near future, it's yet enhanced appeal as a musical instrument alone will make it an even stronger contender on the market than it already is today.

Steinway will remain the top name of the industry for some time: for some, this is the safer bet but how it actually translates into re-sale value remains unclear: Ori hinted an answer from a dealers' perspective in his above post....

For those intent to get the absolute finest piano for money paid, Estonia is and will remain an incredibly strong contender on the market.

This is something we have noticed for quite a while and in many cases it had nothing to do with 'cost'

As in real estate, some like to buy prestigeous location-location-location - others prefer undervalued holdings with emphasis on built quality and future potential.

And values are going up in some outlying areas as much or even faster than in inner cities - nobody could be certain in each and every case.

In my personal opinion, it's best not to answer of resale value the question directly but instead put emphasis on the enjoyment of instrument while in the posession of the owner.

Since both pianos are of high quality and can be highly pleasing,it is for shoppers decide themselves which one would make perhaps the "better investment" for them.

It's not that one can - nor should - perhaps put a dollar value on everything we own in life.

There's other stuff to consider....

Norbert smile

Last edited by Norbert; 10/27/09 05:29 PM.

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