FUN With Numbers: Collector Coins Still Rule Market

Posted on 1/21/2016

“Too Many Indians And Not Enough Chiefs.”

After we were spoiled by a very mild December weather wise, January slapped us abruptly in the face with cold reality, ushering in the true feeling of winter here in New England. Snow, ice, and frigid temperatures have returned. The deep freeze here and in other regions made it enjoyable for numismatists, coindexters and snowbirds to make the annual trek to the Sunshine State for the 61st edition of the winter FUN convention. The change of venue to Tampa, FL, was a welcome change according to legions of collectors and dealers, too. Everyone always seems to have a positive experience at the FUN winter edition: a spacious venue, wonderful exhibits and aisles and aisles of coins. Collectors had the chance to enjoy the finest numismatic fare available to kick off 2016. While many hobbyists were intent on filling important vacancies in their collections, others were happily rubbing elbows with the hobbies elite soaking up the numismatic atmosphere. Dealers, as always, were anxious to mingle with their numismatic brethren, wanting to feel the pulse of the market and determine where demand will be in 2016.

While this show has traditionally served as a bellwether of numismatics in the year ahead, this year’s pattern may be more difficult to gauge. As a well-known Florida dealer asserted, the coin market is a bit unpredictable and is going through “a climate change.” Other attendees whom I spoke with are also in a bit of a quandary as to the exact direction of the market.

Lower metals prices have caused a measure of concern for those who primarily deal in bullion related material, too. Of course, the 10% drop in gold spot and 15% decline in silver spot since the last Winter FUN installment are not bothering the average collector intent on acquiring a few Morgan dollars or a $20 Saint-Gaudens coin. One hobbyist hailing from Massachusetts reported that he was able to purchase $20 Saint-Gaudens NGC MS 63 type coins for $1,185 on the bourse. “I was so excited to be here and to find really choice holdered coins at this price. I mean, several dealers had raw coins at this price,” raved the Bay State native. “I picked up 3 coins and one was a 1914-S.”

While collectors were buying and trading coins, dealers were busy canvassing the bourse assessing competitive dealers’ inventories and looking to better bolster their positions.

Many of the bourse dealers I conversed with state that their clients are still looking for the ultimate certified coin or coins to add to their collection or investment portfolio. As one industry market maker said, “There certainly was a glut of fantastic material which came on the market in 2015. Of course we all know it’s virtually impossible to replicate that quality.”

While demand for six-figure coins is still vibrant, the lack of available options is frustrating to many serious collectors and the dealers trying to compete for them when they appear at public venue. As a New York dealer advised, “There is a severe lack of talent in the political arena as well as in the rare coin market in 2016.”

Yet seemingly many of the customers still clamoring for this type of trophy material were spoiled by those "once in a lifetime offerings" hitting the auction block over the last year or so. One well-known California dealer advised that he feels the market overall is at a great point for true collectors: “I believe that current prices for many standard bearer US series are a great opportunity at this price point—high grade Walkers, Mercury Dimes, and Classic US Commems are tremendous values.”

Toby, a self-described serious collector from Georgia, stated that he thinks 19th Century Proof Type coins are bargains at current levels and feels that the supply is drying up fast. “Cameo Seated Lib Quarters in Gem PF 65 or better are what I am on the prowl for,” he said. “But there are definitely fewer available than at last year’s show. I was able to locate a pair of great Seated Lib Quarters with motto in NGC PF 65 Cameo setting me back $1,450 each, these are great prices. The coins of this era in proof on average register well under 1,000 struck… I was paying a heck of a lot more for these not too long ago.”

The collector is correct: records indicate coins of this caliber were trading at 40%-50% higher levels at auction just a few years ago. Toby went on to opine, "I think the big dealers and heavy hitter collectors have been so obsessed with monster coins and museum quality stuff that they’ve overlooked coins such as this, I feel right now it’s a great time to salt away a few.”

Of course the strategic and exciting FUN Signature Auction by Heritage as always was a great attraction.

As the gavel fell silent on this year’s Heritage FUN signature Sale, 6,415 lots were sold realizing $34.2 million. Certainly a significant showing but to be frank, in comparison to recent years FUN sales, this registers on the low side. Really? $34 Million low? I can’t believe I said that yet it is true. A brief comparison of significant analytics reveal that the total realized in 2016 is the lowest tally in the Sunshine State since 2010 Heritage winter FUN which claimed $36,970,193. For further reference, we have to go back to 2003 to find a lower total realized than the 2016 sale.

A brief breakdown over the last three years yields the following:

FUN Signature Auction Results Per Lot

2014 avg. price per lot = $9,304
2015 avg. price per lot = $8,566
2016 avg. price per lot = $5,336

According to the auction data above, the average price realized per lot has declined significantly since 2014. Yet that lower figure for 2016 has a lot to do with the lack of multiple single million-dollar coin sales that bolstered the previous two auctions! While only one coin conquered the million-dollar threshold this year, 10 coins easily catapulted over the million dollar plateau in 2014/2015! However, even discounting the million dollar coins which sold in 2014/2015, the average prices realized per lot in 2016 were approximately 40% less than the previous two sessions.

The percentages below however, reflect the market strength and parity in these key collector categories and price points as nearly 90% of all coins selling are under $10K. Demand is definitely targeting the average /serious collector!

Price Realized 2016 2015 2014
$101-$1000 32.8% 30.7% 27.3%
$1001-$10,000 58.0% 59.0% 59.4%
$10,001-$100,000 8.7% 9.1% 11.7%

As for the elite $100K + coins, I can report a dramatic drop off in their sales data. In 2014/15, an average of 83 coins powered over $100K. However at the just concluded Winter FUN, only 22 lots appear in that telling category equaling a 75% reduction.

Single coins selling at $100K+ At Heritage FUN Signature Sale

2016 2015 2014
22 91 75

The rare coin market is still vibrant, yet selective and obviously the ultra-rare coins are in fact just that—ultra-rare. The 2016 market is still strong for collector coins, very strong in fact. However there is an obvious and glaring disconnect when it comes to higher echelon certified coins. As a friend of mine said, “It’s a case of too many Indians and not enough chiefs.”

That is one way to interpret my friend! It is quite telling that while rarity and record prices realized command headlines, their pickings are slim thus far in 2016. However, for all their bravado, it is collector coins that still rule and by quite the majority

Until next time, happy collecting!

Jim Bisognani has written extensively on US coin market trends and values and was the market analyst and writer for a major pricing guide for many years. He currently frequently attends major coin shows and auctions.

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