Why are US coin prices dropping?

I've noticed prices for US coin have dropped significantly in the past year. In Dec 2015 I bought a 28 Peace Dollar XF45 for $340 now its worth $295.

 

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Is it certified or raw?

Chris

 

Phew. Hope that's a premium coin. PCGS Auction Prices lists 200 prior sales of 1928's in XF45, going back to 2002, and only 25 of that 200 have reached or exceeded $340. Judging from their results, you should have been able to get one for less than $300 at any time in the last 15 years, and regardless of what people are referring to as "value," actual sales prices haven't changed that much since about the end of 2003.

 

Just curious - who says it's worth $295 now?

 

They go up and they go down. In the long haul, it will go up but all prices for all commodities are driven by supply and demand. Personally I think you overpaid for this to the tune of around $50.00 +/-.

 

There is a lot of discussion about this, in particular Morgan Dollar VAM prices, on VAMworld. The economy has a lot to do with it including disposable income and alternatives in the stock market while it is rising. But I believe there is a structural issue of not bringing enough young people into the hobby.

Coin collecting has often been for the older set because of cost and time. But it has always been fed by a new generation of collectors but today we compete with TV, the internet, gaming, etc. There was an interesting lecture I saw recently that correlated the decline in literacy in the US with the introduction of TV and people no longer reading. That does not bode well for the future when they measure it after the internet.

But back to the main topic, I think it is pure supply and demand on pricing. Bring more people into the hobby and demand automatically increases. Continue down the path we are on and the future does not look so bright.

 

VAMs are another thing entirely, being quite literally a moving target on a day-to-day basis. The only good assumption associated with VAM prices is that Populations for a given VAM are almost certain to increase, with the consequent effect on pricing. That's why I'm so hesitant to offer value advice on any but a very few of them.

PCGS CoinFacts offers a quoted price of $350 for a 1928 Peace in XF45. Right above a list of 5 PCGS-slabbed auction results from the last 6 months, none of which exceeded $235.

The first grade where all their listed auction results exceeded $350 (for a non-Details coin) is MS60.

 

A lot of the coin values are based on rarity but as most grandparents pass their coins down to their children and more of these ungraded coins get graded and come out of the wood work, will this this cause the supply to go up and the prices start to decline?

For instance, back before the internet (Ebay, coin auctions,,etc), the only places you could find these coins were coin shops or shows. Coins back in the late 90's that I thought were semi-rare are now readily available on Ebay at market price.

IMHO, I wouldn't look at coins as a sole investment but maybe 5% tops of your total portfolio. I see too many old guys at shows struggling to get rid of all their coins.

 

You make some good points, but I still think our hobby now competes with the electronic world for a share of mind with the younger set. We have always competed with other activities but for some reason this feels different to me and I work on our grandchildren to try and teach history through coins.

As for VAMs you also make a good point with known VAMs, but a great deal of that world for me is that the number of discoveries keeps the hobby fresh and the number of potential discoveries is almost limitless. So for even a novice VAMmer the possibility of recognition for new variety is only a coin away. But all prices must be a function of supply and demand and I have made the same argument with VAMmers and that hobby for sure needs more participants.

The TPG pricing is always a source of criticism and I believe that to be a function of variations within grade (eye appeal etc.), the lack of automation of the grading process, and bias among themselves. One thing we talk about on VAMworld and is probably relevant here is the process of collecting, which has a bit of OCD mixed in. If I need an 1881-O PR01 to fill a grading set and there are only 4, then the posted prices are interesting but irrelevant. I will pay up for that coin because of rarity which I know PCGS hates to admit. For every series and every denomination there is always a lone wolf willing or unwilling to pay stated values for collecting reasons. The same is true on the selling side of the transaction.

I found a group trying to track auctions more frequently and they even track VAM sales. Their work is far from perfect but at least they are trying. http://www.coinsociety.com/ In time they may make a real contribution.

Good discussion topic and I would be interested in the opinions of a lot of other people.

 

Wat r yo talking about? Don't knot no.........

 

PCGS

 

Coins Magazine by Krause Publications

 

How many US coins have been produced? Trillions. How many have been melted, lost or destroyed. Millions.
The supply is greater than the demand. Prices will keep falling until it reaches a point where the buyers come in for a bargain, putting a floor on the prices.
The OP bought his coin at retail, perhaps thinking he was going to flip it.
Lesson learned. You are only out $50 it could have been 1000x times that.

 

What do you mean by "worth"? Presumably you bought it because you wanted to add it to your collection, not as an investment. If you don't intend to sell it then its worth is measured by how much satisfaction you have from owning it, not by some dollar value. If you intend to ever sell it then it sounds like you probably did pay too much.

 

Yet David Hall says PCGS Price Guide is "what a knowledgeable dealer would ask a knowledgeable buyer to pay."

 

And we all know Dave is a very knowledgeable fellow...........

 

Ain't touchin' it.

 

The only statistics I have been able to find to support an argument that literacy is truly in decline in the United States are comparing our functional literacy to that of up and rising nations like India and China. I don't believe for a second literacy is in decline in America. My generation, on average, is far more educated than that of my father's. If we go back to my grandfather's generation, many didn't receive much of an education at all. I would, in fact, say that the Internet forces persons to become more literate since so much of it is text-based. I think this argument was a valid concern 20 years ago, but is a fairly moot point now.

 

All I know for sure is back probably late 80s an older guy was helping me. And it was pretty easy to find a coin show. Now I'm older and nobody wants my help.