State of the market

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I recently submitted 35 notes for auction. All were Bank of Canada replacement notes and were certified by BCS.
The auction results , not surprisingly, were as follows--of the notes submitted only 10 notes sold, none of the notes were graded less than UNC 60, they were all protected with a reserve of 50% Charlton and I recovered the unsold notes. The price of the reserved notes ranged in value from a low of $75. to a high of $450. They were all very desirable notes at one time but todaythere seems to be a  lack of interest in this area .
Anyway I was not totally disappointed, I had hoped for better but now I will just put them away and leave them to my family. I have been collecting , buying and selling notes since 1959 and I'm ready to let it go.

 

Unfortunately I too have found the market very slow, but have seen this in the past and suspect in time it will again pick up once people have more disposable cash available.
I do not look at this time as a bad time, but an opportunity to pick up those notes that I may have been unable to pick up at a time when prices were not as flexible as they may be now.
The one thing that I noticed is that most dealers at shows still tend to want big bucks for their stock, and one dealer I recently tried to make a deal with over some 37 issues decided to refuse what I considered a fair offer and told me to basically get lost....I couldn't believe his asking price for the 5 notes was $5600 and my offer was $5400....to me in these times seems more than fair...but I guess that is my opinion.

I have been fortunate enough to pick up some high denomination polymer replacement notes from a dealer in Quebec and a few 54 replacements from a dealer in BC for what I consider good prices.
I prefer to deal with individuals as opposed to the large store front dealers only because I seem to not have to tack on their overhead on my purchases.

Anyways, I too have stashed many of my notes until times change, but sometimes that is what makes collecting interesting...putting something in a box for 10 years and forgetting about it only to reopen it down the road surprized at what you have ...

Replacement notes have been languishing for a number of years to this point.  In fact, I'm not sure they have ever been worth anything close to catalogue value since the catalogue started pricing them by prefix.  Not many people would prefer to drop $500 or more on a multicolour note, even if that note is uncirculated, over an older series note that faces up nicely.  Add to that a growing sense that not all notes printed to be replacements were actually used as replacements, and suddenly, those notes with asterisks on them don't seem to be very meaningful.  Older collectors buy older notes.

I see many sellers put things on That Auction site that can't be named.  With starting bids close to book or a reserve.

I will tell you now I won't even look at those auctions as a buyer.   If you want to put something up for auction make it an auction. 

A high starting bid or a reserve is not an auction.. you might as well put it as a buy it now with an "make an offer" option.

I also know that an occasional seller I ALWAYS list my notes with $0.99 start with no reserve.   These auctions always seem to have the most interest and bids as buyers want real auctions.

By setting a high starting bid or reserve it is no longer an auction but rather a store trying to sell for at least a certain price..

Just my 2 cents..

Auctions do have reserve bids.  It is common. That being said I agree with you to the point that some sellers are just not worth dealing with and that will exist on an auction site or even at a show...some sellers may have paid "X" amount of dollars for an item and will not sell unless they get something above that (in most cases)
I do agree that auctions that start out with a 99 cent start does seem to attract me more than one that is already starting at book or more. Some sellers just fish for that one person that is new to the hobby and takes the bait,,,,unfortunately many of these newbies get taken early in the game and lose interest in the hobby which is unfortuanate.
Times have changed yet still some people think that the 1967 Centennial dollarbill is worth $10 

Using an auction format with a low opening price is one way to sell an item.  Other sellers might prefer to use honest descriptions and conservative grading when listing.  To each their own.

I see many sellers put things on That Auction site that can't be named.  With starting bids close to book or a reserve.

I will tell you now I won't even look at those auctions as a buyer.   If you want to put something up for auction make it an auction. 

A high starting bid or a reserve is not an auction.. you might as well put it as a buy it now with an "make an offer" option.

I also know that an occasional seller I ALWAYS list my notes with $0.99 start with no reserve.   These auctions always seem to have the most interest and bids as buyers want real auctions.

By setting a high starting bid or reserve it is no longer an auction but rather a store trying to sell for at least a certain price..

Just my 2 cents..

In my experience (the TCNC auction at the Calgary CNA, etc.) replacement notes (astericks and X-notes) now sell at auction for approximately 1/2 catalogue plus buyer's fee and taxes.  I am not sure what the notes sell for at a major show bourse as I have not purchased any of these notes (with one exception) in the
few years.  The one exception was a $10 multi-colour replacement that I already had in similar condition at a Regina Show for about 60% of catalogue.  It's a nice note but nothing exciting. 

I can remember being at an Edmonton show some years ago (when the balance of the Belzberg colletion was being auctioned) when the modified '54 replacements were very hot.  Most of the dealers would not even display their better notes and they were confident that the values then exceeded catalogue.  They were also purchasing notes at very close to catalogue.  Most of the catalogue prices for these notes have dropped and the notes now sell for a fraction of catalogue.

There appears to be strength in the market for Domionion of Canada notes, '35's and chartered notes (and especially the chartered notes). 

Unfortunately, I chose to collect these replacement notes in uber grade and now have a safe-deposit box filled with dross.

Most of the shows I attend are on the Prairies and the Prairie economy has been relatively strong and most show attendees appear to be of retirement age plus.   I don't think it's a lack of funds that has resulted in the decrease in the value of these notes but a change in collecting interests.

Relative to many years ago, there seems to be far fewer young people entering collecting of anything, other than dust whilst they play video games on some form of hypnotic contraption. That definitely has to do with it - I am thinking there will be an oversupply in the years to come as fewer collectors are in the game. My two cents. And I hope it is NOT true.

Relative to many years ago, there seems to be far fewer young people entering collecting of anything, other than dust whilst they play video games on some form of hypnotic contraption. That definitely has to do with it - I am thinking there will be an oversupply in the years to come as fewer collectors are in the game. My two cents. And I hope it is NOT true.

Sadly enough I would tend to agree that there are less and less young people that are getting into the hobby.
I can remember years back when it was a common sight to see a parent and child at a local coin/papermoney show yet, it is a rare thing now a days.
It is unfortunate that so many kids sit infront of that box fighting imaginary villians spending big bucks on the next game, deck of cards, or plastic figure, yet have no interest in collecting coins or banknotes.
Personally I think that some of the cause is parents that don't bother enough to expose their children to other areas of interest and are content that their kids are in a room isolated from the real world defending an imaginery one.
I was fortunate enough to have an uncle that collected and passed on some of his collection to me since I was the only one that had an interest. There are times when I have completely stopped buying due to financial issues, but when times are better I get back in with both feet.
It is something I never see that I will get bored of or completely give up.
I wonder if shows and clubs catered more to younger kids if their interest would ignite and eventually see that it is an interesting and rewarding hobby...with tons of history behind it...anyways my 2 cents

I was fortunate enough to have an uncle that collected and passed on some of his collection to me since I was the only one that had an interest. There are times when I have completely stopped buying due to financial issues, but when times are better I get back in with both feet.

I believe you brought up a great point here: how do collectors get started, why people collect in the first place, etc.  Often, kids (or young adults) get interest in coins/notes when  a relative (uncle, aunt, grandparent) leaves them some older coins/notes. 

Unfortunately, there are a lot of Canadians dealing with financial issues so this will definitely be a slow cycle which will take some time for the market to recover from. 

Relative to many years ago, there seems to be far fewer young people entering collecting of anything, other than dust whilst they play video games on some form of hypnotic contraption. That definitely has to do with it - I am thinking there will be an oversupply in the years to come as fewer collectors are in the game.

You're probably right but I'm not sure its the "video addicts" who would be the natural demographic to become collectors.  Keep in mind there will be many "boomers" who've inherited collections which they'll pass down in good time.  All collectible markets go in cycles of hot, luke warm, cold, etc.

History, Canadiana, and perhaps technology (debit cards/polymer notes) could be some of the other influences which spark new collectors investing in collecting paper money or coins.  If 1% of new Canadians or women became more interested in this hobby than that would be a huge boost to the number of collectors (& thus stimulate the market).  When the world and North American economy seems robust then that would also lead people into looking into other ways to invest their disposable cash.   I am sure that many coin collectors got into note collecting in the heady pre-2008 days when the market was bubbling.   I would also suspect that too many "Gold Leaf" $1.00 Centennial or $2.00 Polar bear scams would have burned new collectors only a few years ago.  Now it seems as if there's few notes on the market to be interested in so I'm sure there's some collector fatigue in searching for a good deal.  These are some of the factors I can see stimulating or hurting our sluggish market.

I have a different take on the market...

I have been interested in banknotes for as long as I can remember - back to the earliest days of childhood. I am in my late 30s now and thus am definitely one of the younger collectors out there. But I have an extremely limited collection of notes. Most I have obtained for near face value, and could spend them if I needed to and not have lost out on much. I'd like to get my hands on some more exotic stuff but it is not, has never been, and is not likely in the near future to be in my budget.

So in my ideal world, I'd like to see the banknote market take and even sharper downturn. Let it fall as deeply as it can. Then I will be able to afford a whole lot more.

I was at a local flea market on Sunday and they had a guy there with coins/notes/medals etc
His booth seemed to be booming from what I saw at a distance but the closer I got and started to eavesdrop and soon realized that all of the people were selling and not buying.
At times like this I wish I had a booth nearby from what I saw he was giving people for their items.

A crisp bundle of 1967 serial numbered $1 notes for $120
2012 silver maples he paid $15
A stack of circulated 37 and 54 $1 notes fv of $80 he paid $100
Proof like set 64,65,66 $15 a pop
 
I asked if he wanted to make a quick profit on the prooflike sets and offered $25 a set...I guess you can guess
what he said 
After about an hour of snooping he had probably bought more than he sold (if anything)
I came back and asked him how business was just before closing and he said that he doesn't care if he sells
anything because he really only wants to buy claiming that business it doing great because people are so tight right now and many just don't know where else to sell what they have so they come to him.
I guess the state of the market for him is great right now as long as people don't really know what they have and what it's worth...

The markets for notes will definitely mean different things for different people. For one, anyone who considers their collections to be an “investment” or a “retirement fund” will be greatly disappointed unless of course you are the Wayne Gretzky of bank note buying but the odds a greatly stacked against you since there is only 1 Gretzky. For those who are buying notes with cash and not on credit will do much better and continue to enjoy soft prices which seem to show further softening with no end in sight. Although prices are currently much softer there is still a huge section of notes that have done well in avoiding recent price declines but I believe this only increases the risk of buying such notes at this time. The risk will be much more obvious to anyone that was part of the huge run on prices in 2006/2007. If you take the time to make a study of all past catalogues you will notice that their are many examples of notes dropping in prices and even 20 years later they still haven’t regained their former glory. Prices can trend lower for not only years but decades and so the beauty of the current market is that one has time to cherry pick great notes.   

MG

For one, anyone who considers their collections to be an “investment” or a “retirement fund will be greatly disappointed”

In my particular case about 50% of it was given to me at no cost to me whatsoever, another 25 % would have been from circulated/uncirculated notes I happen to come across at face value from finding then myself or getting them from friends or others that knew that I was a collector.  As for the other 25% I accumulated over years from shows/auctions/dealers/ and other collectors. Some I feel I got a steal on and others I likely overpaid just because it was something that I really wanted.
I never looked at my collection as an investment or a retirement fund and if I were so lucky that when the time came to be put to pasture I made a few bucks profit that would be great.
I collect because I enjoy it. I love the way certain notes look and enjoy trying to find something that I know I likely never will, but it's a great hobby and I don't think I will stop for a long long time.
I think if I thought of my collection as my retirement fund I would be worrying each day to see how my notes were doing...and I surely don't want them to be a cause of an ulcer.
That being said some of my notes have done very well even when looking at inflation and the buying power of a dollar back then and now and who knows...maybe I have a sleeper in the stack that will buy a ticket to Cuba someday...you never know do you

I recently picked up a whole lot of 1954 asterisk notes and a 1937 Osbourne 20 in Fine condition for a VERY reasonable price at the Toronto Coin Expo.  I am pleased that it appears to be a buyer's market as I have always purchased items that I will enjoy regardless of the price I paid for them.

It's up to my descendants to sell the collection or do what they want with it when I'm gone