Card singles and unopen box products prices seem to be going up daily, and it's not just Michael Jordan, Kobe, Mike Trout and Tom Brady. Just about everything is shooting up. The hobby is on fire. 2019 was our best year ever at Sports Cards Plus and, the first four months of 2020 has dwarfed the same time period of 2019.
It used to be that buyers looked at eBay completed sold prices ("comparables") to determine what they should pay for their next purchase. For more than two months now, single card prices and unopen box prices have gone up so fast that what something sold for a month ago, a week ago or even yesterday, is no indication of what it will sell for today or tomorrow.
On March 24th, COVID-19 force the closing down of in-store retail operations across the United States. Unemployment is estimated to be 20% or higher. The stock market crashed by over 30% in just a few days. It looked bad for retailers.
Up until then, we never put much effort into internet sales. Our in-store sales were so good, we didn't have time or the desire to diversify our operations. But then came the forced closedown. In late March, Sports Cards Plus went scrambling to enhance our on-line sales. The response was an unexpected boom in sales. Single card values doubled, tripled, and some went up 400% or more. It resulted in an overwhelming demand for unopen products which resulted in corresponding wholesale and retail box price increases. But why?
Historically, card values took a dip during sports off-season. And with all sports closed down, everyone in the sports collecting business feared the worst in late March. But just the opposite occurred. Card values quickly took a sharp upward trend...... Why?
Here is my take:
1. Sports cards and memorabilia is purchased with discretionary money. People who had discretionary money typically were allowed to work from home with during the "stay at home lock-down."
Because they no longer had to commute to work, they had more free time. They saved money on gas, car bills (car insurance companies issued rebates for less travel), they were eating at home rather than eating out, and they were spending next to nothing on retail purchases and entertainment.
And then there's the "$1200 Stimulus Check" per person. With promising good news hitting the television and internet, most people no longer feared the worst. The long-term future looks good.
What were they to do with this extra discretionary money and extra free time? They went to the internet because there was no live sports to watch....or bet on. Many sports fans, some of which were past sports collectors got re-acquainted with today's sports collecting market. They saw all the great stuff for sale on eBay. They bought some stuff and like most of us, they started following what they had bought and found values going up because of all the new money entering in the sports collecting market. This encouraged these new buyers to buy more, hoping for continued success; and continued investing success resulted in more and more buying.
Those which enjoyed sports betting found betting/investing in sports cards to be nearly as exhilarating. Since just about everything was on a steady upward trend, it was easy money to bet on sports cards. The only questions being, how high will it go and what/when should one sell? Since everything continues to go up, the investor continues his quest and inventory depletes. And thus, the sports collecting market remains on a steady upward trend.
2. On March 24th, the Manufacturers were also forced to shut down operations. They were not allowed to resume operations until about April 30th. And, they were required to resume at less than full capacity. This meant that for about six weeks, the "stay at home collectors" had to feed their hunger for sports cards from existing inventories which quickly depleted from the high demand. High demand and dwindling supply resulted in higher prices.
3. Kobe Bryant's death on January 26th turned Kobe Bryant fans and most NBA fans to eBay to seek and purchase a memento of this NBA great. Within minutes after his death his cards and memorabilia were gobbled up. More cards and memorabilia took their place but at much higher prices. A Kobe Bryant 1996-97 Topps Rookie card (ungraded) which previously sold for about $15 soon sold for $800.
Of course, $800 is much too high for an ungraded version of Kobe's Topps Rookie Card and values later corrected to today's value of about $150 (about 10 times the value for this card on January 25th). These new eyes on the sports collecting market, whether they picked up a bargain or paid too much for Kobe cards, generated tremendous interest in the sports collecting world. It open their eyes to possibilities as well as introducing them to our community.
4. New collecting money and skyrocketing prices for new cards, turned attention to the relatively low cost and possibly undervalued rookie cards and star cards of the 70's, 80's and 90's. Soon these cards increased by 100%, 200% and more. Unopened "junk wax" which sat on retail shelves at $10, $20, and $30 per box, doubled and tripled in price as collectors busted these boxes in hopes of finding a "Gem Mint" card.
5. Card Grading Companies, Beckett, PSA, etc. provide buyers the means to objectively determine card quality. The better the condition of a card, the more valuable it becomes. This gives collectors security in their purchases. Internet buyers are now much less fearful of possible fraud.
6. Group Breaking, already popular with late night card investors, got a shot in the arm from this new collector/investor money. Group Breakers went searching for more and more product to bust for their audience, which quickly reduced product availability and increased product pricing.
Break customers finding a high demand market for their "big hits" returned to their favorite breaker in search of the next big hit. Increased prices for "Group Break Spots" did not deter customers because the lure of a possible high dollar hit was too much to resist.
7. Now that new products are in full production, what will happen to the card market? Will card values go down? Will unopen box prices go down? .....I don't think so. Older boxes have all but disappeared. Try finding a case of 2013-14 National Treasures Basketball for under $30,000. I sold a case of 2017 National Treasures NFL Football for $21,000.00 a month ago. Now the only one I see on the market is $35,000.00.
So that only leaves new product for box buyers and group breakers. Manufacturers are limited in the number of boxes they can produce because the number of assets (autographs and memorabilia) of the highly desirable rookies and stars is limited. Mike Trout and Derrek Jeter just don't want to sign 30,000 cards per year. While I believe the manufactures will increase production to try to feed the demand, demand will exceed availability.
What about card singles? As long as card investors take a measured approach in selling their newly acquired single cards, card values should continue to go up but at a more reasonable rate. I see new collectors/investors come into my store every day. As long as they get a positive experience in our community, they will become buyers and collectors. I see great days ahead.
