Don’t look now, but rent, homes and the cost of living in general aren’t the only prices that have shot up recently; the value of trading cards and comics has skyrocketed in recent years, and it seems like every month auction records are shattered in the collectibles realm.
What led to this unprecedented increase in value? Why does it seem like every week Mickey Mantle’s iconic 1952 Topps card is setting a new record? How have certain comics become paperback mortgages?
We’ll direct your attention to the Federal Reserve.
Enter the Fed and low interest rates.
The Federal Reserve has made it habit to keep interest rates artificially low, below that of inflation, hiking up rates only twice since the 2008 financial crisis — once in 2015 and again in late 2016. The central bank has shown steadfast reluctance to increase interest rates too quickly, an action they deem to have potentially unfavorable consequences. Rather, interest rates have been kept below that of inflation for the last decade. Now we’re seeing the effects spilling over into the collecting realm, hiking up the prices of tangible commodities. That means your cars, houses, coins, trading cards and comics, although many of which are innately rare and sought after, are enjoying astronomical jumps in value.
These low interest rates have incurred worry among wealthy investors in regards to the clout of the U.S. dollar. Hence the jump to tangible commodities, because paintings, cards, comics and other tangible assets — or collectibles — aren’t subject to inflation the way currency is. You can’t just flood the market with Renoirs, ’52 Mantles and vintage Superman comics. (Well, you can, but that’s an entirely separate conversation.) Thus, we’re seeing landmark dollars placed into a different sort of investment, a collectible one.
To put the jump in prices into perspective, the aforementioned 1952 Topps Mantle is selling like gold-plated hotcakes at auction and typically averages around $500,000-plus in high grades, according to Professional Sports Authenticator’s Sports Market Report. (The company assigns a grade of 1-10 to trading cards and other collectibles, based on the condition of the items.)
To illustrate the meteoric rise in value for vintage cards, let’s look at the 1952 Topps Mantle in PSA 8.
Back in 2004, a 1952 Topps Mantle sold for just over $56,000. Four short years later, the value of PSA 8 Mantles nearly doubled, selling for around $112,000. In 2015, that value took another massive leap and the card fetched a staggering $525,800 at auction. That’s an 827% increase from its 2004 value, a mark more impressive than the performance of bullion over the same time frame. The above-pictured Mantle just broke the previous record for the grade, with a high of $600,000. Want more evidence of the card’s tremendous value jump? An example graded PSA 9 is worth as much as $1.7 million, according to PSA’s website. What’s more, there are currently three examples of the card in PSA 10. What will those go for in such a hot market?
This phenomenon isn’t exclusive to vintage baseball cards. Hockey cards, too, are jumping in value. Gretzky’s 1979 O-Pee-Chee rookie card, graded PSA 10, recently sold for $465k in August of 2016. In 2011, the very same card sold for a fraction of the price: $94k.
Another iconic card. Another leap in value. Another auction record.
Don’t forget about vintage comics, which are also enjoying the ride. In 2014, Superman #1 sold for $3.2m, a new record. Other comics are flying off the auction block. A high-grade example of Fun Comics #73 recently sold for over $100k. Early Batman Comics continue to leave their mark, especially since Detective #1 sold for over $1 million back in 2010. The list goes on.
The point of illustrating these crazy values? With droves of cheap money circulating throughout the U.S. economy comes a heightened demand, limiting the supply and catapulting the prices for hard assets.
Will the Current Trend Continue?
Will the status quo persist? Are these faux low rates here to stay? That remains to be seen. But in the meantime, rent continues to climb — at the time of this writing, February 2017, apartment rent is 1.8% higher than February of last year, college tuition has seen an approximate 5% hike over 10 years, and of course the value of our beloved trading cards and comics continues to soar.