I saw this analysis on Reddit yesterday, and I thought it was brilliant. Compiled by user RESHP1, it tracks the weekly price of a Colt LE6920 as determined by the lowest and highest price paid for a successful auction on Gunbroker. What’s really interesting is how there are two peaks in the price; one a few weeks after the panic started and another after president Obama announced his support for an assault weapons ban during the SHOT Show. In general, though, the trend is a downwards one. People seem to be running out of money and supply is starting to catch up with demand. The incoming flood of tax refund checks will keep things hairy for a bit, but the worst may well be over. For now. Make the jump for RESHP1’s more detailed analysis . . .
The psychology of a mass panic buying event has always been interesting to me for some reason… that and I’m waiting the market to die down a bit for my own AR-15 so the pricing trends are of particular interest to me. I decided to track the new in box prices of three popular AR-15s since when the Sandy Hook School shooting happened. For each week starting 11/30/2012, I found the highest and lowest price for an auction that actually sold. The prices are for the week following the date of the data points on the graphs (the 11/30 data point covers prices from 11/30-12/6 for example)
I chose to track three guns: The Colt LE6920, the Bushmaster XM-15 Magpul Edition, and the DPMS Oracle. I chose these guns because they are popular and are spread across the spectrum from premium to budget. They were also easy to search for and return results mostly of comparable guns. Filtering which auctions were apples to apples comparisons was sometimes a challenge since some sellers would throw in accessories and there were often subtle changes in features/colors between the guns in different auctions. I tended to be a little more selective for the low end of the pricing, filtering out auctions that deviated too much in features/accessories, but was more lax in the upper end just to show some of the wilder price flucuations.
There were some interesting things I noticed that may not be obvious from the graphs alone. [CLICK HERE FOR THE OTHER GRAPHS]
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There was about a 3-7 day lag after Sandy Hook. The movement in price was almost immediately noticeable (more accurately, the ratio of existing auctions that closed with a sale increased immediately), but full out panic mode didn’t really start until a week or so. The peak was generally the first week of 2013.
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Prices spiked again after the recommendations of the Biden Gun Violence Task Force were released on 1/17/2013. Things were starting to calm down before that, where sellers were starting to find the top of the market again and where those top price auctions were not meeting their reserve or even getting an opening bid (Previously, almost every single auction resulted in a sale. The only exceptions seemed to be when auctions were closed early, presumably since the gun sold locally)
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The price increase was expected, but the variation was just insane. During the first couple of weeks, basically no one knew the value of anything and it was oviously apparent. You had sellers a little slow to adapt offering Buy-it-now prices at what I’m sure they thought was a really healthy mark-up next to penny auctions that got bid up in some cases thousands of dollars higher. On the tail end you also had people impulse buying at ridiculous prices while the majority of other auctions at the time were closing at much lower prices. Those who did their homework definitely made out ahead and those who didn’t were liable to get burned badly.
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There was a noticeable drop in volume in early January. The last two weeks have seen a recovery from that. Hopefully supply is at least stabilizing. There are now more and more auctions, and the prices are starting to stabilize as auctions are coalescing around a consistent threshold buyers are willing to pay. I’m also seeing a more normal ratio of auctions sold vs auctions unsold (about 3:1 unsold by my quick and dirty estimate), indicating sellers are indeed finding that threshold. You still see the occasional flier auction with a high starting bid, and sometimes they’re still finding a sucker to pay that price, but it’s much more rare.
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On an interesting side note, there was one guy asking $5000 for a special serial number colt LE6920 before the panic started. As far as I can tell, he seems to be the only seller not to sell his gun eventually through this panic cycle.