Rising Prices Motivating New Collectors

Posted on 5/21/2008

Acquiring “finest known” coins has suddenly blossomed into a full-blown market frenzy. But, as NumisMedia reports, the demand (and the opportunities) are not restricted solely to high-value numismatic rarities.

A guest article from NumisMedia

This has long since been a very real market and the competition for hundred-thousand-dollar coins is quite intense. It all began with the idea that one collector could never outdo another in a game of acquisition for the “finest known” coins within a specific series and date. This has blossomed into a frenzy, the magnitude of which could not have been predicted. The depth of this market continues to grow every day, as high-value numismatic rarities continue to attract the thrust of interest by dealers and collectors.

The Central States Numismatic Society Convention was held in Rosemont, Illinois, in mid-April and the consensus was that it was very successful for most of the dealers in attendance. There was enough new material to excite dealers and collectors, although prices were at premiums higher than previous levels. A hot market leads to rising prices, motivates new collectors wanting the best their money can buy, and inspires dealers to take advantage of both.

In addition, the Heritage Signature Sale realized a fantastic $44 million. The highlight, of course, was the 1804 Class I Original Bust Dollar. More often than not, it is called the “King of American coins”; this one was certified by NGC as PR 62. This is one of those bona fide rarities, in which case grade is not as important as the actual date of the coin. Another true classic rarity is the 1838 O Bust Half Dollar. It does not come onto the market very often and when it does, it usually sets another price record for the grade. The latest one offered by Heritage was a PR 45 and realized $276,000. Among other highlights are the following:

Denomination   Grade   Price Realized
1804 Bust Quarter   NGC MS 65   $310,500
1839 No Drapery Quarter   NGC PR 65   $517,500
1842 Seated Quarter Sm Date   NGC PR 64   $126,500
1839 Seated Half No Drapery   NGC PR 62   $138,000
1794 Flowing Hair Dollar   NGC AU 58   $488,750
1849 Seated Dollar   NGC PR 67   $230,000
1855 Seated Dollar   NGC MS 64   $149,500
1870 S Seated Dollar   NGC XF 40   $805,000
1879 $4 Gold FH   NGC PR 65   $201,250
1820 $5 Gold Curl 2 LL   PCGS MS 65   $253,000
1827 $5 Gold   NGC MS 64   $126,500
1871 CC $20 Gold   NGC MS 64   $414,000
1932 $20 Gold Saint   PCGS MS 66   $161,000

The Dollar market is extremely active, with the majority of dealers needing large quantities for their customers. From average circulated coins to those certified in all Mint State grades, FMV has been moving higher over the last couple of months. Rare dates are very difficult to locate and, if they are upper-end quality for the grade, they will bring premiums over the current FMV. For example, the 1893 S in MS 65 is currently listed with an FMV of $481,250; however, one dealer will pay $500,000 for a coin that meets his specific grading criteria. It would be very interesting to see if there are any available in the market.

Anxious collectors with vast sums of money are driving Deep Mirror Prooflike Morgan Dollars in finest known condition to higher levels. We have noted aggressive increases in the FMV over the last several months and it does not look like there is any slowing of momentum in sight. In March we listed the FMV for 1899 S in MS 66 at $28,130; this month the FMV is $37,310. The 1889 S in MS 66 is up over $14,000 since March, from $47,190 to $61,560. The 1903 in MS 65 was listed at $25,310 in March and today it has an FMV of $33,440. There are numerous other examples of DMPL Dollars rising in this fashion. These increases are mostly due to dealers attempting to shake loose as many of these dates as possible from the present owners. Some dealers are successful but several of these rare dates are simply not available.

In the same vein, GSA Dollars are active as well. Dealers have noted an increase in the number of collectors of GSA Dollars, especially Carson City, certified by NGC. Market makers need the highest grades for Registry collectors, but the census indicates very few coins have been certified in the highest grades. This limits the number of collectors who can pursue the best certified sets. To further intensify the problem, collectors who already own the highest grades are emphatic about maintaining their positions. This may well mean the only way to acquire a finest known is through a new certification.

One of the healthier recent performers is the rare 1879 CC in the GSA holder. The competition for the lower Mint State grades has led to advancing prices, as many collectors just cannot afford the finest known grades that are few and far between. Here is how the 1879 CC has fared since February.

Grade   February 2008   May 2008
MS 60   $6,150   $6,610
MS 61   $7,200   $7,740
MS 62   $7,380   $7,950
MS 63   $8,220   $9,000
MS 64   $11,820   $13,200

While the recent demand for all NGC-certified GSA Dollars has been on the rise, the P/L and DMPL Carson City Dollars were seemingly being ignored. Such is no longer the case. Many dealers and collectors noticed that the FMV differential between Prooflike and Deep Mirror Prooflike Dollars had not advanced and were too close to regular business strikes. In the last month or so, buyers for P/L and DMPL GSA Dollars have become more aggressive. While the FMV may not show many increases, the prices have solidified and there is much more sales activity at present levels.

The overall market is not restricted to finest known coins. There are many tiers of demand for all series. Finest known or rare coins, middle quality, even average coins for the grade in most series are active, as long as they are priced accordingly.

This is a guest article written by:
 
NumisMedia

The thoughts and opinions in the piece are those of their author and are not necessarily the thoughts of the Certified Collectibles Group.