Vintage Guitar Market Heats Up

Thousands of guitar collectors head to Dallas for one of the biggest guitar shows of the year. They will be admiring -- and perhaps playing -- vintage Martins, Fenders and Gibsons that sell for as much as a quarter of a million dollars.

The market for vintage guitars has been on a tear lately as aging baby boomers buy up the same classic models -- in some cases the very instruments -- their rock 'n' roll heroes played.

That's the sort that caught Andy Rappaport's eye as he recently browsed among the hundreds of old instruments hanging from the walls at Southworth Guitars in Bethesda, Md.

"I make investments for a living, and I've done very well at it," says Rappaport, who runs a venture capital firm. "But my guitar collection has outperformed almost anything else that I've been investing in over the last 10 years."

Take the 1950s Les Paul he purchased from Southworth a few years ago. "I tell my wife this and she doesn't believe me but… for example, I saw one not as nice for sale a few months ago for five times what I paid for it," he says.

Only a few thousand of those guitars were produced. And with more and more collectors chasing them -- some who don't even play the guitar -- classic Les Pauls are going for record prices.

Take the one Gil Southworth has on sale for $115,000 -- a 1961 Les Paul Custom model with a mahogany body, an ebony fretboard and what Southworth jokingly describes as a "happy springtime sound."

When the first Les Paul model was introduced in 1952, it sold for $210. Its namesake, the jazz innovator Les Paul, first mounted strings on a piece of wood to demonstrate how a solid-body guitar could sustain a note without feedback.

But compared to the Les Paul's more popular rival at the time -- the Fender Telecaster -- the original Gibson model was only a modest seller. And it was discontinued between 1961 and 1968.

That's about when a young British guitarist named Jimmy Page picked one up and played it in a new way. The lead guitarist for the rock band Led Zeppelin transformed the Les Paul into one of rock 'n' roll's Holy Grails. And what Page did for the Les Paul, Jimi Hendrix did for the Fender Stratocaster and folk rockers like Steven Stills did for Martin acoustics.

Overall, the vintage guitar market has nearly doubled in the past five years -- to an average price of about $13,000. That's according to a stock market-style index of 42 Fender, Gibson and Martin models tracked by the Vintage Guitar Price Guide.

Prices for acoustic guitars have steady increased, but it's the electrics that have really blown through the roof.

"When we look at this huge growth in solid-body electric guitars from what we'll call the golden period, it's really a fashion statement," says Kerry Keane, an appraiser at Christie's auction house and a collector himself. "We're projecting upon the instrument we purchase a form of hero worship."

Even rock legend Eric Clapton fell under the spell. "The first guitar he ever purchased was a Fender Telecaster," notes Keane. "Why? Because Muddy Waters played one."

That sense of awe helped drive up the bidding for one of the most fashionable Les Pauls -- a rare 1959 Sunburst model, which Christie's auctioned off last October for $265,000.

Sales of guitars actually owned by celebrities have fetched even higher prices -- like Clapton's famous "Blackie" Stratocaster, which sold for nearly $1 million in 2004.

Of course, the fame factor is just one attribute that makes the guitars so valuable.

Another is the rich tone older instruments develop as they age. Collectors like Southworth gush like wine connoisseurs when they describe, say, the sound of a vintage Martin acoustic.

"I would say it's delicate, yet full-bodied… robust, yet unassuming," he says with a smirk.

He's joking, of course. But it's fairly easy to hear the difference between his 1946 model and a brand new one, which sells for about one-tenth the price just up the road at Guitar Center.

Ian Lazarus, a salesman at the Guitar Center store, says the guitars age much like fine wine does in an oak barrel. "The more time it's been played on, the wood becomes seasoned," he explains, "and the more it's going to resonate over time."

Solid-body electric guitars don't have a sound hole, so they don't reverberate in the same way. But you can still hear the difference.

"A vintage Les Paul is going to sound like a growl," says Gil Hembree, who co-authors the Vintage Guitar Price Guide. "A newer one, although very nice, will sound like a purr."

The distinction doesn't matter much to collectors like Andy Rappaport. He continues to add both old and new guitars to his collection, despite the looks he gets from his wife.

"Every time I come home with a new guitar, she says, 'Well, it could be a motorcycle, or a blonde,." he recalls. "And the guitars are preferable to those. So as long as they keep me out of trouble, they're OK."

Rappaport didn't come home with a guitar today. But Southworth doesn't mind. He'll find plenty of customers when he heads for the Dallas Guitar Show this weekend armed with a '59 Les Paul Sunburst.

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