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Saw this New York Post article of Steinway customers getting angry about being duped into believing the instruments are investments.

https://nypost.com/2019/02/09/stein...FyIka3vhFvd301txKko42Q0EK0hGjM1UEo6ovYiY

How about the truthfulness of at the end of the text. Paulson looking to sell for $1B.?

I wondered about that as well.

The lack of a listed author contributes greatly to the article’s suspiciousness.

If anything immediately appreciated in value when purchased, showrooms would not exist. People would buy a Steinway (or anything for that matter) sight unseen and immediately resell it or hoard it to increase market value. It would become a commodity. So the article insinuates two things; Steinway reps think all customers are stupid, or Steinway customers are stupid. Neither of which makes any sense in the purchase of something as refined or expensive as a Steinway piano.

There probably have been some people who have bought a Steinway, and offered it up for sale soon after (within 5 years) only to find that they are being offered and accepting a crazy low price. I've actually never seen a young Steinway for sale in the UK with so much of a discount from new, even amongst private sellers, but it probably does happen and I would imagine that Steinways at such low prices are bought rather quickly from when advertised.

The demand for used Steinway pianos in good condition means that they do depreciate less than other makes, but to call them an investment in the way that, say, having a property portfolio is an investment, is stretching it a lot.

If I was in the market to buy a new Steinway piano and I could comfortably afford it, I may well buy one. I'd be buying it not to watch it increase in value, which it undoubtedly wouldn't, but to enjoy it as the fine instrument that it is. Perhaps that's the mistake people are making.... they're buying it convincing themselves that they're growing money when they're not.

+1 joe80 -- maybe convincing themselves that they can afford a purchase that they really cannot.

I went thru a little of this buying my 1981 S&S B. It was an estate consignment sale. They were asking much less than the average S&S B on the market at that time in any age bracket. I was aware that in time it would need a little work. They came back to me with an extremely low offer b/c they were anxious to settle the estate. I've been told that I got it for what some might call "core" (rebuild) or wholesale value. So it's almost 40 years old now. I did pay a little more for it at wholesale value in 2017 than it was probably purchased for new in 1981. I looked at some websites that list B's of that era anywhere from $30k - $80k, depending upon the overall condition of the piano. So I can see how one can fall into the "investment" mindset. But I took my time and did some research to settle in on the fact that pianos are slow moving and it takes decades for this to occur, and money has to be put into repairs and upkeep. I couldn't let myself think that I could turn around and resell it in a couple of years to double my investment.

When considering any financial decisions on that scale involving that much money, one has to take personal responsibility and do the research. Some Steinway pianos cost more than my house, and I have a nice house. I can't blame the real estate agent or mortgage agent if I don't do my research and read the fine print before signing the documents.

The price of a "new" Steinway goes up every year like clockwork. I suppose that as this continues over time, the value of a used Steinway also rises and over a LONG LONG time may actually exceed or come close to the price the private owners originally paid...…..but I suppose the same thing could said, generally speaking, about all higher end pianos...as long as folks are willing to pay those prices for new and used.

The Post attributes authorship to, "Post Staff Report". One could ask them what that means?

The article has truth about Steinways not appreciating but also has misinformation and biased comments. Some of the scenarios talk about trying to resell the piano to a dealer which is not a good idea since one must compete with wholesale prices available to a dealer. One person quoted in the article deals in used Steinways so obviously cannot be unbiased.

The idea that a Steinway immediately drops 50% in value when leaving the showroom(from another article that I think the Post article was based on) is not true based in what I think are far more reliable sources. In fact, in the other lengthy PW thread about this article Larry Fine responded and said he warned the person interviewing for the article him not to say Steinways immediately dropped 50%.

I think that even in the internet age quite a few Steinway buyers are duped by the "appreciation" sales pitch.

Steinway salespeople definitely use the tactic of claiming it to be an investment that won't lose value. The stats and figures of the real marketplace just don't bear those claims out, though. And, when you factor in the current "war" which Steinway has declared on rebuilders with the infamous "letter", you will (in my humble opinion) start to see Steinway values really plummet when customers realize that Steinway is making every effort to see that no one else is rebuilding these instruments.

I recall in the window of a Steinway dealer in Philadelphia several years ago a chart showing the "value" of a Steinway grand over the years. What was listed was the purchase price of a given model across several decades, and, of course, the price increased dramatically over the time span of that "information." This was reputed to be "proof" of the investment value of a Steinway. What anyone with most of his/her marbles intact would realize is that the same "financial logic" could be applied to any manufactured commodity.

Regards,

A financial investment? No.

But an investment in one's own happiness and peace of mind? Absolutely, whether the money is spent on a Steinway or any other piano that satisfies the buyer's criteria.

Not all investments are financial investments.

I doubt the starry eyed pianists longingly looking through the window s of Steinway dealer are really using much logic. Emotion - big time Logic - not even. I wonder how many new piano buyers really understand what MSRP, SMP, “street price” or wholesale really mean.

I was thinking the very same thing. When someone wants something desperately, it doesn't take much arm-twisting rationalization to get them to say yes.

I was also wondering about this as well. I've heard it said that they claim a Steinway is a great investment, but I've never seen these marketing materials. If they're pointing out that their retail price increases every year, then so what? Most prices increase over time. But if they are actively trying to convince people that their purchased piano's value will go up, that's unethical (IMO), and probably fraudulent.

The other thing is, just because an occasional piano sells for a "high" price, doesn't mean they can all be sold for a higher price. Every one purchased new isn't going to be worth more later. Think of all the specimens slowing aging in Nana's parlor, or at the trash dump, or squirreled away as a "core" in somebody's warehouse, etc. They aren't all worth big money. The high resales are outliers, and to get there they've been maintained ($), probably recently refinished ($$), if not completely rebuilt ($$$), etc. By comparison, if you buy 100k in gold (instead of a piano), you don't need to have the gold tuned twice a year, plus other periodic maintenance, nor have it "rebuilt" for one-third to one-half of it's future value, in order for it to be worth more than what you paid for it.

Everyone who invests plans to cash out at some point. Everyone who buys a piano is not expecting to cash out at big T. If everyone who bought a Steinway expected to resell it later, then there would be a surplus of them in the marketplace, driving the values down.

Wouldn't it be funny if the SEC sent Steinway a "the letter" advising them not to offer financial advice? After all, their prices represent fairly substantial "investments."

I wonder how they'd respond if you stopped by your local gallery and said, "I'd like to see prospectuses on B's and D's with and without player systems."