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  • Do Expensive LEGO Sets Lose Value in December?

    Fcbarcelona101

    By Fcbarcelona101

    After a somewhat long absence from writing articles, I decided that a good way to try and get back into the rhythm was to revisit one of my 2013 articles, The LEGO December Effect.

    For those of you who have not had the time to read the previous article, back in 2013 I noticed an interesting price trend for the most expensive sets: they seemed to take a big deep in value in the month of December. Back then, I decided to compile some data for a few of the most expensive sets at the time and do a comparison between their November and December value. The table below is the one I originally used.

    Capture.PNG

    It is pretty apparent that a majority of the sets in the list dipped quite significantly in the month of December, with the Eiffel Tower dropping a whopping 33% alone. However, it is important to remember that these expensive sets also tend to have the lowest sales in terms of quantity, a factor that result in one out of the norm sale to affect the set’s value in the Price Guide.

    Back then some theorized that one of the possible reasons for this deep in price could be that AFOLs, by far the most likely group to spend hundreds of dollars in these sets, put a temporary stop in their set spending in order to prepare for the holiday season.

    I also noticed that there seemed to be an increase in supply for these sets in the months leading up to and including December. This coupled with the above theory about collector spending gave a pretty decent explanation for the “December Effect” at the time.

    A couple of years have passed and I honestly regret not keeping track of this and analyzing it on a yearly basis, as the more data we had the easier it would be to determine if it was a fluke or an actual recurrent event. But, no point in worrying about what could have been while there is still time to show what happened in the last holiday season.

    The table below includes the same sets I researched back in 2013 and some others that have since retired or significantly increased in value. They are sorted from Largest to Smallest set value.

    Capture1.PNG

    Surprised? I certainly am. While a plurality of the sets in the table still decreased in value, the number of sets that didn’t is as close as it could be without being the same (12 vs. 11). More significant is the fact that the magnitude of the dips in value seems to have been smaller in this past year, with none of the sets decreasing by more than 10%.

    Something crossed my mind while I was looking at this table. Could the release of Star Wars: The Force Awakens have generated enough buzz that interested for older UCS sets was impacted?

    Looking at the average decrease in price from November to December shows that while all the sets in the table aggregate to around (1.16%), Star Wars sets decreased at a lower rate (0.75%) relative to the (1.70%) of the remaining sets. For reference, the numbers in my last post were pretty much even at (8.3%)

    While there seems to be a small variance between Star Wars and other sets this time around, it is very hard for me to say that this is completely due to the release of the new movie. If the non-SW sets had performed similar to the way they did in 2012, it would be easier to make that point, but that wasn’t the case.

    In conclusion, it seems that the “December Effect” was nowhere near as strong this year as it was the year I originally noticed it. Clearly, we need way more data to determine if it is even a thing, but for that we will have to, once again, wait until next year!

    Thanks for reading! You can revisit one of my 2013 articles, The LEGO December Effect to gain more insight on this topic.

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    marcandre

    Biggest thing I notice is several retired sets would have made great investments in 2013 despite their inflated cost over rrp. I had no interest in a $900 Grand Carousel back then but it would have been a great investment.  

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    citymorgue

    It could've been a fluke year.  The price variances on those seem to be within the margin of error of price fluctuations.  As you can tell, overall over the last couple of years, pretty much everything has gone up in value.

    I wouldn't be surprised too though that the reason some of these super expensive lego sets drop in price a bit, is only because people have their money focused on other things versus buying a $2000+ lego set.

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    Fcbarcelona101
    41 minutes ago, citymorgue said:

    It could've been a fluke year.  The price variances on those seem to be within the margin of error of price fluctuations.  As you can tell, overall over the last couple of years, pretty much everything has gone up in value.

    I wouldn't be surprised too though that the reason some of these super expensive lego sets drop in price a bit, is only because people have their money focused on other things versus buying a $2000+ lego set.

    Completely agree with both statements. As @marcandre noted the most interesting piece of information is how much these sets have increased in value over the last 3 years. I literally had to go back and double check to make sure sets like the Grand Carousel had done as well as the table showed. Maybe investing in a SSD right now is not such a bad idea...

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    KShine

    Unquestionably, the older expensive sets do sell for less (on avg) in Dec.

    Between the collectors who take a seasonal break in buying for themselves, some collectors who need to sell that rare set in order to get funds for holiday shopping, and the influx of Seasonal sellers who plan on selling set XYZ for as much as they could get (regardless of its price), this inevitably has a negative short term effect.

    What people need to keep in mind that these expensive sets did not suddenly become less valuable in Dec (regardless of the data). It should remind us that statistics can be deceiving (especially when there is limited data within a time frame) - They simply don't always show the reality of what is actually happening.

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    asharerin

    Check the charts on camelcamelcamel. Very common for Lego prices to crater Dec-Jan. Interestingly this is the inverse of Megabloks price action where Christmas is the best time to take profits.

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    Val-E

    Recently retired exclusives tend to peak in Dec/Jan thanks to the post EOL boom so it all depends on the timeframe since EOL and the quantity actually sold. Maybe Eiffel tower loses value in December but there are 10 times more real sales.

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    gobuffs98

    Another thing to look at would be the volume of sets available or sold in the different time periods. The general thought that there is more money available during the holiday season, so more sellers put these sets for sale at this time of year.  

    Or like it has been said before sellers wanting to sell, so they have money to spend on their holiday gifts.  Or wanting to clear some inventory before the end of the year.

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    Grynn

    I've paid attention to such trends unofficially for several years as well, and my 2 cents is this:

     

    While the price guide is a great tool to have, it is still just too unreliable to perform particularly meaningful analysis with. I would love to be part of the filtering process to eliminate anomalous and bogus sold listings from the eBay data, partially to help satisfy the curiosity I have as to why some sets make massive sudden plunges and peaks, and why some return to "normal" and some don't. High-value sets are not immune to this effect.

     

    Nevertheless, there is certainly more OPPORTUNITY to pluck "bargain" "elite" sets during the holiday season, AND soon afterward. Less the latter this year, but true nonetheless. As others have said, the combination of higher supply and possible lower buying competition means lower prices. Whatever "hot items" hold the spotlight during said season certainly seem to pull spending attention away from older, established sets of all sizes. I'm still kicking myself for not nabbing a crisp sealed 10026 for $160 one January when it was worth $350. Plenty of other examples exist, but there ya go. I'd guess more deals like that pop up during those two months than the rest of the year combined.

     

     

     

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    Fcbarcelona101
    1 hour ago, Alpinemaps said:

    I'd be curious to see this same data continue through Jan. Do these items experience a bounce back post holidays?

    Good point. I really have no idea why I stopped in December, that would definitely be an interesting thing to see. Maybe I can add it at some point this week.

    1 hour ago, gobuffs98 said:

    Another thing to look at would be the volume of sets available or sold in the different time periods. The general thought that there is more money available during the holiday season, so more sellers put these sets for sale at this time of year.  

    Or like it has been said before sellers wanting to sell, so they have money to spend on their holiday gifts.  Or wanting to clear some inventory before the end of the year.

    That's kind of what I did back in 2013. Then, we had eBay data about quantity sold per month, so one could see the peaks in the holiday season. Unfortunately, it seems eBay does not provide us with that data anymore.

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    fossilrock

    Last year was a fairly good year economically for the United States.  I think that played a major role in why it didn't follow the patterns of previous years.   I suspect next year you will see a similar pattern, even if we are only part way through the year, I think we will keep on a good path this year.  Could see another good banner holiday season.  But, next year?  Well.. you never know.

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    KShine
    52 minutes ago, fossilrock said:

    Last year was a fairly good year economically for the United States.  I think that played a major role in why it didn't follow the patterns of previous years.   I suspect next year you will see a similar pattern, even if we are only part way through the year, I think we will keep on a good path this year.  Could see another good banner holiday season.  But, next year?  Well.. you never know.

    There has always been a bit of a disconnect between the economy and LEGO sales/performance.

    Edited by KShine
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