Contrary view - second hand O scale steam is down in price..
Mid sized US Hobbies/KTM locomotives such as a PRR K4s can be found for around $500 at shows and on eBay. In the late 1980's they went over $1k. There is a constant turnover of very nice O scale brass - the key is to be patient and know the market so you don't over pay. My advice is to attend one of the better O scale shows and just walk the aisles for the first day. You will be amazed at the range of asking price. Some sellers will carry the same locomotive to shows year after year and never sell it - other mark them down near the end of the show as they don't want to carry it home.
IMO there has never been a better time to enter O scale for reason of price and availability. New equipment may be up, but very nice used equipment is always turning over at reasonable prices.
Ed Rappe