Is my wife right? Comics are like real estate - the more times a single book sells, the more the price inflates? 3 3

[Dr. Balls]

My wife made the observation that graded comic books sound a lot like real estate in the sense that the same piece of property has to continually increase in value - not because it's "worth" it, but because there are so many people with their fingers in the pie making money off it. She used her parents house as an example: they've been in it for 45 years, so it only sold once - back in 1977. That means that the 8% relator fees, closing fees and all the other stuff that comes with financing a house has only inflated the price once - as opposed to a house that has been bought and sold 6 times in 20 years. The point of her example being that her parents are more financially stable for having lived in the same place for 45 years rather than someone who moves around and having to continually buy/sell houses they live in (and that's a story for the Water Cooler). But when applying that logic to the value of a book and how it inexplicably rises in value - especially a graded one - it seems to make sense to me.

And with fees like buyer's premiums, grading fees, FMV fees, pressing fees, cleaning fees, Ebay fees, shipping fees, fees based on the amount you charge for shipping and Paypal fees - do you think there is some sort of credence to the fact that when considering profit margin on a book, a huge chunk of that margin goes to everyone else and the seller's chunk is significantly lower? And in order to offset that, huge markups have to be made on books when they get bought and then flipped back onto the market?

And with the lockdowns, access to extra money, etc - people entering the hobby and people getting into it more would facilitate a lot more buying and selling, resulting in an increase in price. Couple that with the idea that high grade comics are "investments", and you have a wide variety of people buying books for different reasons, creating more opportunities for middle men to glean repeat profits from the same book.

I know it seems like an obvious explanation, but it really didn't hit home until my wife made this comparison. 

Edited May 30, 2022 by Dr. Balls
Fixing my bad word!

[lizards2]

Your wife is always right.

You should know that by now.

[Buzzetta]

Not always as I have observed downward trends in sales as a book cools off and people start to unload the book.  The book might eventually go up in relation to other books to coincide with the rising prices of... well everything... but some books have plummeted. 

That comic Six Guns comes to mind as everyone was trying to pump it up like the next Walking Dead and then ... nothing. 

Cue the sounds of people getting out of that book as soon as they could.

There are others that come to mind. 

[Bookery]

The OP may be right about some of the methodology that goes into the rising asking prices.  But unlike housing, which people need, one doesn't have to buy a comic at ever-inflated prices.  The fact that many choose to do so, I think, is a fear of being left out.  Prices keep rising, and finally, out of a sense of panic, they jump in.  I think this is the case with AF-15.  It seems every sale in grade sets a new record, despite there being an abundance of copies in the market.  But often there eventually is a reckoning.  A number of keys (bronze-age especially) have seen not insignificant drops since last summer, as collectors may finally decide "enough!" on certain books.

[Point Five]

I think there’s a lot of truth to this. And just as with real estate, slabbed books now have deep rich sales data which most serious buyers have access to. With more data comes more confidence in a book’s performance, and expectations of a book’s value are continually being reset.

Remember decades ago when the release of the new Overstreet guide was an *event* each year, as we all bought a copy and pored through it wondering if our books had gotten small bumps up in price? Now the bumps (or drops!) are potentially huge, and there’s a data update like that in real time every single day.

 

 

Edited May 30, 2022 by Point Five

[MAR1979]

On 5/30/2022 at 10:13 AM, Point Five said:

I think there’s a lot of truth to this. And just as with real estate, slabbed books now have deep rich sales data which most serious buyers have access to. With more data comes more confidence in a book’s performance, and expectations of a book’s value are continually being reset.

Remember decades ago when the release of the new Overstreet guide was an *event* each year, as we all bought a copy and pored through it wondering if our books had gotten small bumps up in price? Now the bumps (or drops!) are potentially huge, and there’s a data update like that in real time every single day.

 

 

With a bit of vision Overstreet 15-18 years ago could have become the modern Day GPA.  Instead of what is pretty much a curio of the past.  I picked up the yearly book from the time I was child in 1982 until 2020.  It's now nothing more than a too tiny print sized anachronism in my mind.

As for Comics and Real Estate; it appears, sadly, that "1st App" "1st App" "1st App" is equivalent to "Location" "Location" "Location"

Edited May 30, 2022 by MAR1979

[Lightning55]

The only thing that drives price is demand.  How many times something is bought and sold is just one indicator of demand.  Speculation is a demand factor, too.  Comics are more like stock than Real Estate in that they have a perceived value that may be higher than their essential value.

In the OP's example, if the family home has not been sold for 45 years, and all the similar homes on the street sell every few years, it makes no difference.  All comparable homes in that area (similar size, same condition) will be worth roughly the same, regardless of their sales history. 

It depends solely on the demand, which is made up of many economic and social factors.  No one cares what your "costs" are when they are purchasing something.  They go by the prevailing market price, which may be higher or lower than what the current owner has into it.

[thehumantorch]

I remember a conversation with another local collector back when Overstreet was the only pricing guide.  He maintained that Overstreet could and did manipulate prices higher by increasing prices every year.  Now we have all of these youtubers and social media guys pushing certain books and driving demand.  We have sites dedicated to investing in comics,  google 'investing in comics' to find thousands of sites devoted to getting rich with comics, and we have sites like Rally Road offering micro investments in expensive collectibles including comics.  And we have mainstream media jumping on board and talking about comics as a legitimate investment.  And we have shilled auctions on ebay and elsewhere bidding up comics and establishing new market highs that then become the accepted value.

The current wave of movies and TV shows based on comics is certainly affecting the value of the books we collect but there's no doubt our hobby and the value of our books is being manipulated like never before.  And everyone seems to be happy because they're all making money.  I don't know how it will end and I will continue to buy what I like and try to ignore all the noise.

[MattTheDuck]

On 5/30/2022 at 10:39 AM, Lightning55 said:

The only thing that drives price is demand.  How many times something is bought and sold is just one indicator of demand.  Speculation is a demand factor, too.  Comics are more like stock than Real Estate in that they have a perceived value that may be higher than their essential value.

In the OP's example, if the family home has not been sold for 45 years, and all the similar homes on the street sell every few years, it makes no difference.  All comparable homes in that area (similar size, same condition) will be worth roughly the same, regardless of their sales history. 

It depends solely on the demand, which is made up of many economic and social factors.  No one cares what your "costs" are when they are purchasing something.  They go by the prevailing market price, which may be higher or lower than what the current owner has into it.

Yep - your copy of AF #15 in 8.0 is "worth" what the comparable sales say it's worth.  An OO copy purchased off the stands, slabbed when it could be and sold in 2022 is worth exactly the same as a book that's been sold 50 times since 2000.

[JollyComics]

On 5/30/2022 at 7:55 AM, lizards2 said:

Your wife is always right.

You should know that by now.

Did you remember there was a wildfire near your home few years ago?  Your wife tried to save some of your collection.  She knew it has more valuable than your house.

[valiantman]

There's also a "comfort factor" associated with multiple sales.

Buyers who wonder if they "should" pay $500 for a comic are more likely to feel "comfortable" if the same book in the same grade has sold 100 times at $500 or more than if it has only sold twice at $500 or more.

People don't want to be "that one guy" who overpaid, so they are more comfortable being "one of 100" who overpaid (and the price rises due to the confidence buyers are getting from multiple sales records).

Since no one can guess right every time, joining a crowd of other wrong people is more "comfortable" than being wrong all by yourself.

Edited May 30, 2022 by valiantman

[valiantman]

On 5/30/2022 at 2:02 PM, valiantman said:

Since no one can guess right every time, joining a crowd of other wrong people is more "comfortable" than being wrong all by yourself.

Using just this one sentence, it's pretty applicable to comics, real estate, movie reviews, gambling, politics, religion, conspiracy theories, and all those other things we don't discuss.

Edited May 30, 2022 by valiantman

[Ken Aldred]

On 5/30/2022 at 8:02 PM, valiantman said:

Since no one can guess right every time, joining a crowd of other wrong people is more "comfortable" than being wrong all by yourself.

Confirmation bias.

[Northwest]

On 5/30/2022 at 10:39 AM, Lightning55 said:

 

It depends solely on the demand, which is made up of many economic and social factors.  No one cares what your "costs" are when they are purchasing something.  They go by the prevailing market price, which may be higher or lower than what the current owner has into it.

Yes, demand  and supply because price can also reflect scarcity 

Edited May 30, 2022 by Northwest

[707comics]

In your example how would you value the house when you sold it? Would the asking price be based on the one time 8% increase or price it comparatively on recent sales in the neighborhood (regardless how many times it has sold in the past)? I suspect it would be base on SOLD COMPS in the area even though it has been in the family 45 years 

That said, the wife is always right so just smile and nod either way

[Dr. Balls]

On 5/30/2022 at 8:13 AM, Point Five said:

I think there’s a lot of truth to this. And just as with real estate, slabbed books now have deep rich sales data which most serious buyers have access to. With more data comes more confidence in a book’s performance, and expectations of a book’s value are continually being reset.

Remember decades ago when the release of the new Overstreet guide was an *event* each year, as we all bought a copy and pored through it wondering if our books had gotten small bumps up in price? Now the bumps (or drops!) are potentially huge, and there’s a data update like that in real time every single day.

 

 

That was very much the case with Wizard - on a monthly scale. Waiting to rip that thing open the morning my shop opened so I could get ahead on price increases before customers came in for their pulls was like "must see TV".

[Dr. Balls]

On 5/30/2022 at 1:52 PM, 707comics said:

In your example how would you value the house when you sold it? Would the asking price be based on the one time 8% increase or price it comparatively on recent sales in the neighborhood (regardless how many times it has sold in the past)? I suspect it would be base on SOLD COMPS in the area even though it has been in the family 45 years 

That said, the wife is always right so just smile and nod either way

That is absolutely true - it'd be based on comps of the neighborhood - but if the houses around your parents had been flipped 6 times in the time they lived there, the comps would reflect those new prices. So your family would definitely get the price bump based on the market, but the price bump is based on repeat sales and realtor/bank/appraiser/inspector profiting, not because of a genuine increase in value.

However, houses always have, and always will increase in value for many factors, including the sale of the house by a realtor. That's just the way the world goes around. 

[Gatsby77]

I think there are two different scenarios here.

Scenario 1:

Exact same copy of the book - sold multiple times?

No - the price actually tends to go down on 2nd or 3rd sale in quick succession (defined as within two years).

See...the Gary Keller More Fun & (I believe) Ducks / Disney sales. - Subsequent sales of these exact books often went for 30-60% less.

Also..the Billy Wright books - many of them went down on initial resale from the prices secured when first brought to market.

Scenario 2:

Transaction volume in general.

There are *tons* of Golden Age books whose values haven't kept up with those of key Silver or Copper Age books simply from lack of transaction volume.

A book - like ASM 300 or AF 15 or even Spider-Man 50 - that sells dozens of times a year - will tend to have both more stable pricing *and* appreciate faster than a far rarer Golden Age book that may sell only once every 3-4 years in a given grade.

The Golden Age book may achieve a price 20% higher than last GPA sale, but then again, last GPA sale was 4 years ago.

Vs. some key (and far more common) Silver and Bronze Marvels may rise 20% a year just because there are more known sales on the books. Over the course of those same 3-4 years as the Golden Age books, that's significant.

My personal example?

I bought a CGC 4.0 copy of Startling Comics # 10 in 2013 for $2,151.

Resold it in 2016 for $2700.

Last sale / current value (as of Dec. 2020 GPA): $3,450. (Note: these were all the exact same book, but the result would have been the same if they were different CGC 4.0s)

This is a semi-key Golden Age book (first appearance Fighting Yank) - and fairly rare.

15 total copies slabbed according to the census, with an average slabbed grade of just over 5.0.

And yet...it's increased in value just ~55% or so in. 8 years.

Compare that to any Marvel Silver or Bronze key over the same time period.

It's not remotely comparable.

Lack of transaction volume killed expected gains.

[Axe Elf]

I suggested something similar a while back in noting that all the buying and selling costs help to inflate the value of a book.  Like if you buy a $100 book and pay $10 shipping and $10 tax, that book is now worth $120 to you.  You can sell it at a loss, sure, but the only way for you to break even on the book is to sell it for $145, so you can pay the $25 seller fees and still make back the $120 you put into acquiring the book.

Most people thought it was nonsense, and that the market doesn't work that way, but most of those were people who read comic books for a living, so take their objections for what they're worth.

[Beastfeast]

On 5/30/2022 at 4:25 PM, Axe Elf said:

I suggested something similar a while back in noting that all the buying and selling costs help to inflate the value of a book.  Like if you buy a $100 book and pay $10 shipping and $10 tax, that book is now worth $120 to you.  You can sell it at a loss, sure, but the only way for you to break even on the book is to sell it for $145, so you can pay the $25 seller fees and still make back the $120 you put into acquiring the book.

I don't have the patience to explain AGAIN why you were wrong in that thread and why you're wrong now.  What something is worth to you means absolutely zero to what the market values it at.  You raising the price to recoup your costs does not organically make the FMV different.  Demand does.  

 

On 5/30/2022 at 4:25 PM, Axe Elf said:

Most people thought it was nonsense, and that the market doesn't work that way, but most of those were people who read comic books for a living, so take their objections for what they're worth.

What does that even mean?  This is peak malignant dork.