A "Classic & Vintage" Bicycle Market Bubble?
 

The stock market, commodities market, housing market and certain markets for collectables have experienced big surges in prices, followed by "bubble bursting". Could this be the case with C & V bicycles? Not long ago, 3-speed bikes and road bikes were hard to sell, even at really give-away prices. Now they sell quickly, and at ever-higher prices. Time to "buy & sell", or time to "buy & hold"? Also, how does this effect our hobby?

A well-known flipper in my area (really two, Old Fat Guy and RedXJ) found that students value the looks and reliebility of well-assembled Schwinns, Raleighs, and other classics as utility bikes. The demand enables pricing of several hundred for well-rebuilt transportation from these two. That hasn't really translated IMO into a very different market in Ann Arbor for the collectibles and high-value '80s/'90s midrange steel bikes, as far as I can tell.

I do imagine that collectors will have less disposable income for a while to come. I don't see buying a "new" classic until I sell a few. I doubt that classic Masi- and DeRosa-based bikes will become substitutes for a good Raleigh Sport, to commute back and forth to class.

I am worried that soft-riding classics like early PX-10s will all become drewed and irreversibly fixed. Maybe we need a "Save the PX-10s" movement.

Road Fan

There are few different factors affecting the market, quality, fixies and 'want'.

Without getting to deep inot it:

Quality: I recently picked up a 201 GT road bike with shimano Sora STI's and derailleurs. Everything else, EVERYTHING, was no name/generic including the cassette and chain. Back in the 80's and early 90's manufacturers spec'd their bikes with complete groups. Full 105 or Athena or Dura-Ace or Record right down to the BB, headsets and pedals. Without spending a minimum of $1500 thats not going to happen with a modern bike.

A few recent examples we've seen here in C&V would be the near new Paramount with Dura-Ace that was purchased for $600 (similar bikes can foung for $300-ish) and the Peugeot with Reynolds 753 tubing. I recently picked up a mint, almost NOS 1989 Schwinn Tempo with full 105 for $200, the guy I bought it from paid $100 for it. You simply cannot get that kind of quality and level of componentry with a modern bike unless you spend $1500 +.


Fixies: Simply enough horizontal dropouts are needed and most manufacturers stop using them in the late 80's early 90's. whatever number of bike we think are being converted...well, it's its probably 3 or 4 times that.

Want: Alot of use were cyc ling during the 80's and early 90's and couldnt afford our dream bikes. Now that we're older and have jobs we can afford what we couldnt back then. Back in 1985 i was 17 and working in a shop for $6/hr. There's no way I could ever afford a $2,000 road bike!!! Those same bikes are now $300!

Gotta work...will finish this later....

It's impossible to get an accurate read on the market right now because of the extraordinarily cold weather. As I see it now (which I should articulate as 'AFAICT') there's a dip in the mid-range market ($400 bikes) and the higher end market is iffy right now in that some stuff, like vintage C-Record, is doing very well but other stuff seems very undervalued (Like Olmo and Basso stuff).

I second that emotion. :thumb:

Could'na said it any better. :p


JohnnyBee

A funny thing happened a couple of years ago. I decided to restore an old Lygie Italian bike, just for fun. I bought NOS parts off eBay that were correct for the time period. Then I decided to sell it when it was finished. I posted it for $400 on Craigslist and there was no interest even though it was below my cost (not counting the time and work). So I raised the price to $600 and suddenly I started getting emails. One guy offered me $400, so I took it. I guess people just want to feel like they are buying a more expensive bike and getting a great deal on it. In the end $400 = $400.

The vast majority of fixed gear conversions do not involve grinding off braze-ons or derailleur tabs and most of the bikes I've seen are using frames that would've hit the dumpster; the same ones that were sent to the dumpster long before there was a fixie craze.

IMHO, I dont' believe there is a price bubble. My theory is, the supply of used bikes from the 70s and 80s are being consumed. The 1990s will soon start to show up at yard sales, thrift stores and CL. There were two changes that occurred in the 1990s that will influence prices of old steel road bikes 1) aluminum road bikes, and 2) hybrids. As the 1990s moved along, aluminum bikes became the desired bike frames replacing and diminishing the supply of steel bike frames that will be available. Keep in mind, many of these aluminum bikes have vertical drop outs that will be less attractive to the fixie crowd. Personally, I've already noticed a price drop in used, aluminum road bikes that don't have brifters, (with the exception of Cannondale). The second factor, hybrids replaced most of the low end road bikes. While the presence of hybrids will have less of an affect than aluminum, as used bikes, they will only fill a smaller portion of the used bike market. So my opinion is, enjoy cheap steel framed road bikes while you can, that market will change in the near future.
But as far as used bikes go, if you like to mess around with old, rigid fork MTBs, and hybrids, life is good as there are plenty of them to go around.
I've not evaluated the influence of Magna, Roadmaster, Triax and the Wally World Schwinns on the market place. I'm guessing they'll just replace the supply of Murrays and Huffys.
Of course the price of used bikes pales in comparison to what's happened to my retirement fund, but it's fun to speculate while I measure how many more years I'll have to work.

Lugged steel road bikes of the 1950s through 1970s were an art form. The prices will rise and fall, but some demand will always be there.

Mountain bikes and hybrids later on, replaced much of the road bike market. Road bikes have made a comeback, and now there's a good bit of variety in the commuter bike world. Steel is back in demand for a lot of bikes.

I wish kids were riding something other than mountain bikes. The flat bars are good for control but the front forks make the bikes heavy and the knobby tires on pavement are just plain wrong.

My granddaughters will of course ride only cool bikes.

http://gallery.mac.com/bbattle/100138/IMG_2997/web.jpg

It seems like there's been a gradual appreciation of upper-end bikes, but I wouldn't exactly call it a bubble except, perhaps, in the case of post-Ernesto Colnagos. You could write it off to the bling, I guess.

On the other hand I can't understand some of the prices being paid for thoroughly mediocre low- and mid-range bikes from the mid-70s forward. And this cult around bike-boom Raleigh Super Courses is totally over the top.

Last year was exceptional, partly due to $5/gallon gasoline. I don't have high hopes for this year, and haven't been able to find decent bikes as prices that make refurbishing worthwhile.

YMMV

I don't think there is a price bubble either. A price bubble assumes that prices are being driven up beyond what they should be. Economic times are hard and maybe more people want to ride so inexpensive bikes become a little more valuable. I don't think the demand will become overwhelming because the new manufacturers can meet it and the upper limit for price on a good, used utility bike will be held in check by the price of an inexpensive new bike.

Meh. The cult of the fixie is dead. All hail the cult of the cargo bike! ;)

Overall there is a cultural movement going on right now (and for a few years back) that puts a premium on vintage and "authentic" consumables. Bikes, guitars, you name it.

I'm 34 and my generation is in the middle of it, I think - though it started in the 80's. It used to be about finding cheap, cool older items that were a bit unique but available. As our incomes rise and the nostalgia sinks in deeper and deeper so do the prices on these goods...it's part supply and demand and part romanticizing of the objects.

As it is often spoken of here - everyone is looking for a cheap but ridiculously cool bike to flip or restore. If people were simply looking for a tool like a bike to ride or a guitar to play the prices would be much lower. As it is, we are all looking for that great find and thus the prices keep climbing - vintage bikes are just more popular now than they were a few years ago. It will ebb eventually but who knows when...

For people ahead of the curve, looking for cheaper transportation, a slight rise in market prices due to competition. For people spending disposable income on hobbies, a slight drop in market prices due to lack of competition. Probably a wash, in a small market lightly influenced by most factors. Hobbies slow a little in uncertain economic times.

Same here. And I am not seeing prices higher than a year ago. So no bubble here. And the value of the vintage/near vintage bikes is compelling.

What I am seeing is that people returning to bicycling are visiting a local shop first, seeing that good road bikes are over $1,000. Once educated, they are more than happy to pay $300 for a Tempo. They know it is a deal.

If you want a good steel (cromoly) lugged frame bike, the manufacturers aren't making many of them anymore, whereas in the 1980s, such bikes dominated the mid range bike market. So picking up an 80s Univega, Miyata, Panasonic, Bridgestone, Schwinn, etc., can be a very cost effective way to getting a nice bike.

The three bikes I have to work on right now: 88 Miyata 712, 88 Schwinn Tempo, and 93 Peugeot PE300 all compare favorably to mid range LBS bikes in the $1000 to $1500 range.


So at least in my case, its all about VALUE. As long as pricing is a small fraction of new, then I can't see a bubble.

And one step below these bikes are the 84 Schwinn World Sport and 81 Trek 412 I just completed. Anyone buying these bikes from me will pay less than what a new POS at Walmart sells for. Compelling value.

I really just don't understand why people are still buying new bikes. Thats where the bubble is.

But buy and hold? No thanks! I have a house full of collectibles, and have learned that there is a fad impact on values. So they go in and out of style. I would have made more on my collectibles if I just put the money into savings bonds....

It can't be a bubble. Bubbles are what happen when people speculate that prices will remain high when all evidence suggests that prices must fall at some point. Basically a bubble is what happens when people's expectations are irrationally high. For the bubble to exist, people must be buying them with resale value in mind. This can not really be the case in the market for vintage bikes. I don't think that many people are buying vintage bikes because it's a cash cow.

Perhaps demand has risen recently due to things like gas prices, changes in tastes and values. The cost of making bikes has risen recently due to the rising prices of metals and energy. Also don't forget that the supply of vintage lugged steel frames will always dwindle due to the speed at which these things get hacked up to become fixies or end up in the dump.

Finally, given the fact that making a good lugged steel frame is a skill that is going the way of the dodo, and is highly labour intensive, we should expect that the prices of these frames would increase relative to other bikes as long as there are mass produced cheap alternatives.

Allan

Can you find any comparable nuances here?
http://www.boston.com/news/world/eur...record_prices/

I think it depends largely on the bike itself. I would say yes there is a bubble for marques such as
Confente, Masi, Herse, Singer and Paramounts (for example). But I don't think there is an overall
bubble for vintage steel frames.

It's cyclical. I'm leaning towards the idea that the folks who bought all those bikes during the bike boom of the late 60's to mid 70's are now getting older and have some disposable income and want to relive a little bit of their youth. Hence why I admire, covet, and occasionally collect bikes from that period but not significantly older or new bikes. And probably why I don't give a hoot about vintage mountain bikes - they simply didn't exist when I was growing up. Now I ride mountain bikes but there is nothing nostalgic about it - I want the latest and greatest. But for folks just a bit younger than me who grew up with MTB and BMX and such that will probably become the next hot collectable. 10 years from now the market for 60's and 70's bikes will settle down and the 80's and 90's bikes will be all the rage.

There are some things that do better in a down economy than a booming economy:

Spam
TV infomercials
Used bikes?

With respect to C&V bikes in the above $750 category, my prediction would be a slowly deflating balloon rather than a bursting bubble. I think the age of enthusiasts is leaning towards “mature”. If younger enthusiasts don’t step up in numbers that offset us old guys, the market will slowly deflate (if prices merely hold steady over the next 20 years, it is actually a slow deflation). You see it in the car hobby. It used to be men in their fifties to seventies collecting pre-war cars. Now the new crop of guys in their fifties to seventies collect the muscle cars of the ‘60s and ‘70s. Harley-Davidson learned that a problem was on the horizon when their research showed them that even though sales were good, each year the average age of their buyers increased by one year. That creates a situation that can’t go on forever. Vintage bikes are collected for their beauty, the next rage will be “WIZZ BANG” technology.

I've been unpopular with other predictions too. Without exception I was told I was crazy in 2003 when I sold my house in California. I advised my friends to do the same. The chant back then was: “Real estate does not go down in value. The increases may slow down but that's it”.

I’m not in the hobby as an investment. I just love 531/ Campagnolo bikes. If prices fall, I can buy more bikes.

Kerry P

*grabs sharp pin*

-Kurt

Exactly. Fight your fixie paranoia. Medication is available.

+1 Agree. The high end bikes seem to be in bubble territory. Thats OK, because I am not in that market. Too rich for me.

Meanwhile, mid level steel is still reasonable and presents a good value.