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Who is supporting the high prices of coins?

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People say market is still hot and many series have gone up in price in the last 5 years. But who's still buying to support high prices of coins?

 

For example, 5 years ago, you could have bought a 1796 quarter in MS63 at $30K.

Now you can only buy an EF40 at that price. Why someone pay 30K for EF when he could have bought a mint state example 5 years ago??

He didn't have enough money to spend 30K for MS63 5 years ago and now he's rich enough to spend 30K for midcirculated example??

Or he didn't have interest in coins 5 years ago and now he's so addicted that he spends 30K for EF??

Of course, 1796 quarter is one of the keys for type collectors. So slight increacement in demand might cause a big increasement in price.

 

But how about 1799 doller for example?

You could have bought a AU for $3000+ 5 years ago and now you have to pay $6000+ for the same grade.

According to pop report, AU50 is pop 174 with 620 higher when combined PCGS with NGC.

I don't think many people collect Bust dollers by dates. So most need one or two for their type.

I dare say it's not a rare coin. Has the demand increased dramatically enough to doulble the price of this common coin?

Then what were the buyes doing 5 years ago?

Who's buying?

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Cheap Credit and Low Taxes. I honestly think this is helping fuel higher prices for coins and alot of other things. The good news (or bad depending on your perspective), is that this situation will not last forever. Be smart and just remember everything runs in cycles.

 

An addendum to your point is that although prices have sky rocketed for coins, typical quality for the grade has actually decreased !

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A few dealers around me were grunting that their sales at the recently ended FUN show were not so hot. I found the prices to be high and the quality disappointing. I was able to fill some of my customers’ want lists, but it was a struggle.

 

Maybe if the market slows a little, the prices will moderate. It certainly takes a fat checkbook to buy much that’s interesting these days, and the selection is certainly not what it was a few years ago.

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A lot of people in the US have had large net worth increases in the past several years thanks to the booming housing market. People made a lot of money by doing nothing other than owning a home. Many homes have DOUBLED in price over the past 5 years.

 

A lot of people took money out of their homes with equity lines. All that money went somewhere and a lot of it went into coins.

 

Also, the stock market wasn't that hot. People took money they'd usually invest in the market and bought alternative investments like coins.

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Taro, I was telling someone at the FUN show last week, specifically that AU 1796 quarters now cost more than MS63's did just a few years ago. It concerns me that many of the not-so-rare coins (not 1796 quarters) have appreciated so much, so quickly. I expect that things will cool off and that a number of collectors who have been spoiled by a strong market will be shocked to be reminded that coin prices can actually drop. 893whatthe.gif

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A lot of people in the US have had large net worth increases in the past several years thanks to the booming housing market. People made a lot of money by doing nothing other than owning a home. Many homes have DOUBLED in price over the past 5 years.

 

A lot of people took money out of their homes with equity lines. All that money went somewhere and a lot of it went into coins.

 

Also, the stock market wasn't that hot. People took money they'd usually invest in the market and bought alternative investments like coins.

 

Thus, CTcollector's point exactly: "Cheap Credit and Low Taxes."

 

I also think that the market has grown substantially in the last few years with a growing collector base. Many of the people intrigued by all of the hoopla about state quarters and myriad other coins have turned an eye toward their collecting urges. These people are basically uninformed and believe that coins are rarer than they truly are. Thus, they will buy anything. They also do not know how to distinguish the exceptional pieces from what's average or less than average, for that matter. Their influence has been profound, as they tend to buy rabidly with hoarding on their minds. They will also be the sorest when the market slides, and will be the first to unload, further exacerbating the decline in prices. I do not believe, however, that we should be fooled into thinking that prices will drop to levels of 5 years or more ago.

 

Hoot

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I think it's the times New VW $27000.00 new home $250.000.00 1953 Buick Skylark conv

$1.3 mill dollars 1913 Nickel 4.5 MILLION NOT SOLD???? After that all the coins i look at seem cheap

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As a collector I’ve been buying coins at shops and shows since the mid 1960s. Over that time I’ve seen five major booms and busts. In the past the usual pattern was a lot of people got into the market who should not have been there. These mostly included speculators with more money than brains who pushed up prices to levels beyond what seasoned collectors were willing to pay.

 

The dealers who were selling to these people came up with the concept of the two tiered market. There was the “investment market” where only high grade “investment coins” were traded. Then there was the “collector market” where the lowly collectors chased after “low grade” material. When the “investment grade” market ran out of bigger fools to support it, there was a collapse. The collector coins also saw some lower prices, but quite often the prices never fell to the levels they were when the cycle began. They are almost always a bit higher.

 

While there might be a few investors in the mix, I think the big speculators are playing the registry game. They are the ones who are paying stupid money for a high spot in the pecking order. If they ever get tired of the game, some of them are going find out what reality is.

 

Given the fact that there are more collectors in the market than in past run-away bull markets, I’m not sure where this one is headed. But if it’s based upon debt that people have run up because they could borrow more on their house, the housing game as run out of gas, especially for existing housing. They could be in a crunch if they needed to sell. Here in Florida there are a lot of nice houses that have had “For Sale” signs on them for over a year. And they have also been unable to rent them for lusty numbers like $2,500 a month. The houses are just sitting there.

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Well, personally, my collection "dropped" by about 20% in value over the course of a few hours because I went from using 2006 Coin World prices to 2007 Red Book prices. It'll make renter's insurance a little less.

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For those who have been around for awhile, this hobby does have significant dynamics when it comes to actual prices paid for all coins minted by the US. Whether it's for proofs, business strikes, bullion, commemoratives, medals you name it, there has been a premium paid by someone in the food chain.

 

As for me, I observed a realistic change in 1986 when the Government went into business with brokers to distribute silver bullion to citizens for qualifications to defer income tax just like an IRA. From these roots there has been an enormous trend in the visibility of coins not only as a collectable, but as an investment. The normal progression from freshly minted bullion coins to modern/classic coins was inevitable. It was good for the hobby for those who were already established, but for those just starting, the cost associated with the hobby rose significantly each decade.

 

Those who have entered the hobby as a casual collector in 1999 and then became hard core also have seen a significant increase in obtaining the better coins available in today’s market. If you've ever looked at the GSA report about quarterly profits from the US Mint you'd be amazed at how much money is spent on those coins coming out of San Francisco and West Point...they are money makers and they are not going to back off anytime soon, coming up with new products to put before the spender. Also modern technology allows the mint to produce new designs and coinage faster and better than ever before. Is this good for the hobby or will the mint saturate the market with products?

 

There is a finite amount of classics out there with a few discoveries to supply a burgeoning market. Will it ever pull the horns in...??? Who can know...do you? Who reads these long rants anyways?

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People say market is still hot and many series have gone up in price in the last 5 years. But who's still buying to support high prices of coins?

 

If the coins you would like to buy are too expensive switch to another part of the coin arena, there is plenty of neat stuff out there at fairly reasonable prices.

 

Even though the coin market in the grand scheme of things is (pardon the pun) small change in the financial world, it is still large enough to allow collectors to buy a wide variety of really neat material for dirt cheap compared to years ago. Just DON'T follow the crowd, eventually what they are buying will cool down and other parts of the coin market will pick up.

 

To me the number one area that looks like a screaming buy are classic commemoratives. Look at their prices 15 years ago and look at them now. Some of them are dirt cheap. I'll grant you some of the designs are pretty ugly, but you don't need to buy those designs, there are plenty of very attractive designs out there. Also, look at the mintages on some of them, down in the three thousands. Throw in the history the commmemoratives are commemorating and it's a pretty neat package.

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If someone is buying coins for investment or for profit, I find it hard to believe that they are able to find much that represents reasonable value in US material. Most investment grade US coins are expensive given how common or available they actually are.

 

I remember when classic commemoratives were selling for higher or much higher prices in the late 1980's. But the fact that they are selling for less (sometimes much less) now does not necessarily mean that they are bargains because almost all of them are common except as conditional rarities. It might be more of a testament to how far prices can go in a mania.

 

Another example cited in these posts is the 1796 quarter. That coin is a classic to be sure but is not nearly are rare as many people think. According to David Bowers book on quarters, it is a hoard coin with at least 200 AU or better specimens in existence. That availability hardly justifies current prices.

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I'll jump in on this discussion regarding the 1796 quarter.

 

It is true that there are 200+ or so known specimens, but many of the extant pieces have been previously abused regardless of if they are raw or certified. Additionally, a disproportionately large percentage of the survivors are of high grade with nearly all the remaining pool being extraordinarily low grade, which means that if you are in the market for this issue you will likely be faced with a choice of an altered AU slabbed and marketed as MS or an altered FA or AG slabbed and marketed as AG or G/VG.

 

This means that there are very few near-original coins in any "collector friendly" grade such as VG10-VF35 and when a piece like that is found they are worth what might be considered an astounding amount of money. In my opinion, this provides two breakpoints in the quality vs price continuum for this issue where the non-original very low end coins and the non-original very high end coins are overvalued while the near-original "collector friendly" coins might be considered undervalued.

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tomb hit the nail on trhe head with 1796 quarters

 

now i might add any scarce pre 1900 coin gold silver copper with historical interest and also original surfaces and great eye appeal are still today good buys and value opportunity but it takes more than a passing interest in coins and much study and years of experience to find as such

 

with the internet and chat forums and information there is a smaller learing curve but it still does not negate the main learning experiences of collecting

 

a sharp mind a really good magnifying glass and looking at many coins you want to specialize in for many years

 

now as for coins that have rarity and history with great value and opportunity but it takes more than a passing interest to understand and collect and remember THE KEY IS COLLECTING LONG TERM NOT INVESTING..............OR SPECTULATION ThESE ARE territorial gold and colonial coins

 

pre 1878 carson city coins

 

anything flowing hair

 

pre 1807 type coins

 

seated and trade dollars

 

the above for starters

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Here is an additional list of US coins that I think have relatively good potential. None of them are cheap but all of them are rare or very rare. And compared to premium grade generic conditional rarities, they are bargains.

 

1883 Hawaii proof issues; mintage = 26. Several sold in the Heritage FUN for not much more than a slabbed PR-70 1995-W silver eagle would probably bring and maybe less.

 

Classic Commemorative proofs, such as the 1893 Isabella quarter with a mintage of 103.

 

Cameo proof buffalo nickels, mercury dimes and liberty walking halves.

 

1861 Confederate States of America cent, 12-15 known. Last one sold in a Stacks auction a few years ago for about $115,000. This is a coin with significant historical appeal and importance.

 

Cameo proof indian head cents and two cents. Especially the later years on the indians.

 

Selective pre-1858 proofs.

 

If you really have a lot of money, the 1876-cc 20 cent piece. When I started collecting in 1975, that coin was considered one the key rarities along with the 1822 half eagle, 1804 dollar, 1913 liberty nickel and 1894-s dime. Today, there are many other coins that have passed it in price that are less important historically. An 1893-S and 1889-CC morgan dollar in the highest grades will sell for more.

 

I also agree that Territorial gold and colonial are under rated versus regular issue US coinage, especially in higher grades.

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When the housing bubble finally bursts and foreigners call in the huge US Debt, the dollar, stocks, housing will be in free fall. Bullion will be in the stratosphere and many numismatic coins will take a big hit.

 

It is the housing bubble in my view that has held up the economy but this can not go on forever. Neither can the huge US debt which is largely maintained by foreigners. Never before in history has a country (USA) been so dependent on a potential enemy (PRC) to finance their debt. What happens when the bell finally tolls? And that PR 70 you paid way over CDN Bid for - who dat gonna pay you more for it? Huh? Not me.....

 

As far as many of these expensive US rare coins (coins over $1000), especially some of the ones in high grade slabs (probably resubmitted umteen times to get that grade) - I think almost all the money has been wrung out of these. The challenge I have found on the bourse lately in looking at a lot of these is finding one I think actually makes the grade!

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