Contributors: The final point of the theories section was contributed by Lou Costabile of http://www.JustMJ23.com. Follow up interview provided by Jun Kim.
The values of Michael Jordan cards are soaring as high as Jordan himself would dunking over Patrick Ewing or Dikembe Mutombo back in the day!
Any long time collectors of Michael Jordan cards will know that right now we are seeing some massive increases in the sales prices of Jordan trading cards. For some items we have seen a 100% increase in value since the start of 2011 alone!
We are seeing 93-94 Michael Jordan Scoring Kings sell for $80 – $120 which is considerably up on the $50 they generally sold for late last year (in fact one recently sold for over $200!).
The popular 95-96 Michael Jordan Hoops Skyview has more than doubled in value in less than 12 months, now selling in the $100 – $130 range up from $40 – $50 late last year.
The 96-97 Michael Jordan Big Men On Court cards now sell for around $250 (with a couple recently selling for over $300). This has rapidly increased over the approximately $170 – $200 the cards were garnering this time last year.
And the 07-08 Upper Deck Michael Jordan Die-Cut All Star has almost doubled in value in the last 12 months from $75 to around $140 now. Again there was a sale well above this recently – one in July going for $350!
I could go on with examples for this entire article however proving to you the rapid price increases isn’t my goal – those were just a few interesting examples and it’s something we’re seeing across the board with Michael Jordan trading cards. What I want to look at is some of the theories going around about why this is happening, how long it will last and what it means for Michael Jordan memorabilia collectors.
There is certainly a lot of talk online about the price explosion of Jordan trading cards and a particularly interesting thread over at Hobby Kings on the topic.
In reading online forums and blogs, talking to collectors and weighing in on the topic myself, I have come up with what I think are the top theories about why Jordan trading cards are exploding in value:
- There is a bubble in the market. This one seems to get the most affirmation and certainly has some credence. The theory says that like any open market prices fluctuate over time with the occasional bubble in interest where values shoot up briefly only to eventually burst and return to ‘normal’.Jordan cards have definitely cycled in value in the past however I don’t personally think this is solely the reason for the dramatic jump in values.
- The age, lifestyle and earning capacity of today’s collectors. Many of today’s collectors were kids when Jordan was leading the Bulls to six championships (myself included). We were right into collecting but had very little money to spend. Fast forward twenty years and you have many past collectors reinvigorating their passion for the hobby – only now they often have the lifestyle and disposable income to really build dream collections.
The supply and demand economic model states that as demand increases and supply remains unchanged prices will increase. This could be exactly what is happening here with the influx of returning collectors.
- Collectors who bought high end new products in the past are now moving more into buying secondary market items. Given that today’s range of new products available is considerably smaller with the NBA’s new licensing this does sound feasible. Instead of spending thousands on Exquisite boxes some collectors may be now spending this money on secondary market items. This will result in the same supply and demand scenario as above.
- The internet age. Some forum posts on Hobby Kings say that cards increase in value shortly after being talked about on the site. I haven’t personally seen this happen but it is an interesting point. The more we talk and share about our collecting the more we will interest others increasing demand.However this one has a flip side which probably negates its effect: there are just so many more cards available for sale now. Gone are the days of your only options being those on sale at your nearby card shops or trading within your circle of friends. Now at any given time there are over 25,000 Michael Jordan cards for sale on eBay US alone and thousands of trading opportunities on forums across the internet. This increases supply in the supply and demand model and in theory would normailze or even reduce prices.
- International buyers taking advantage of the low US dollar. This one doesn’t seem too likely to cause a dramatic increase. However it is likely there has been a slight increase in the amount international buyers are prepared to pay if their own currency is performing well against the US Dollar.
- Unethical behavior buy some sellers of cards online. This theory centers around shill bidding and fake sales of cards sold, particularly on eBay.Shill bidding is the act of attempting to drive up prices with fake bids. Have you ever seen a bidder place repeated bids on an item in the smallest possible increments? Sometimes this behavior is an attempt to push the sale price up to the maximum bid but, only just over, in the hope that the original bidder will increase their bid and pay more for the item. There have been some interesting posts around the internet of this behavior including some sellers in particular asking previous buyers to shill bid their items. eBay does have methods in place designed to prevent this and I will look into posting more on this topic in the future.Another sinister side to the artificial price inflation theory is that of fake sales. This theory goes that some sellers may pretend to sell a very rare card at a very high amount. The possibly hundreds of collectors watching the item may now assume that is the going price given that there are so few around. Then when the card is re-listed genuine bidders may be more likely to go higher in their bidding.Although this is certainly unacceptable behavior I don’t see this causing price increases across the board. It will more so affect the sales prices of individual cards and only for short periods of time. With any luck eBay will stamp this out and permanently ban those taking part in such behavior.
- Michael Jordan is a timeless icon up there with Babe Ruth. Jordan’s career story is amazing – his rise to the top leading the Bulls to three straight championships, first retirement and foray into baseball, return to the NBA to win a further three championships and second retirement. All this plus his continued involvement through the Wizards and Bobcats to this day and iconic status as one of the greatest sportsmen to ever live mean there will always be interest in his memorabilia. Perhaps as time goes on collectors are realising how much of an icon he will always be and are looking to invest in Jordan memorabilia sooner rather than later.
- Collectors are losing confidence in other high profile athletes like Tiger Woods and LeBron James. With Tiger Wood’s dramatic fall from grace and lacklustre performance on the golf course of late and LeBron James’ continuing failure to land that elusive NBA championship, we might be seeing some slowing of collector momentum for these two stars. It may be likely that collectors are looking to move on to a more stable sports hero to invest in contributing to the effect of the point above.
How long will it last?
I have never seen such an all encompassing jump in values of Michael Jordan cards like this before. Guessing how long the price rising will last would require knowing exactly what is causing the rise in the first place. So really it is up to you – which of the above do you think is the cause?
A bubble will burst eventually but then a general renewed interest in Jordan’s iconic status may never dissipate. Dodgy behavior on eBay will hopefully be stamped out but then the internet age connecting collectors with high disposable incomes might continue to thrive for many years to come.
We are talking about a somewhat finite resource so the more life-long treasured collections built means fewer cards up for sale which means higher prices for those looking to buy.
What does this mean for collectors?
This is hard to say – do you wait it out and hope prices drop? What if they just keep rising?
Early last year I knocked back an offer to pay $95 for a mint, coated 94-95 Michael Jordan Refractor - that card now sells for $200 ungraded!
Though it can mean it is expensive to buy more cards, greater interest in collecting is always going to be a good thing. It means your investment will be more secure, you have more fellow collectors to share and talk with and there will be more past collectors looking to sell their old collections.
So I don’t think it is doom and gloom at all – in fact quite the opposite. It is an exciting time to be a collector of Michael Jordan cards!
Happy collecting everyone!
Update: October 03 2011:
I have just posted an interview with collector and eBay seller Jun Kim (rare23air83) discussing his insights into the current prices rises.