I first noticed the upswing in 1911 prices back around 2001, right around the time that a lot of popular gun-publications were running feature articles with cover photos of 1911s, on a regular basis. I've no idea if these articles lit the fuze for the explosive increase in popularity, or were written in response to the editors' perception that demand for these guns was growing, and would therefore attract more readers wanting to know about the available products.
I wasn't able to afford a new handgun at the time, and ended up paying the higher price for my 1911 later on, after demand shot up. I distinctly recall feeling frustrated with all the consumers who were shelling out $800 to a grand for non-custom, production pistols. In my mind, I believed that they were the ones who allowed the market value to rise as high as it had. I couldn't blame the sellers for setting the prices at what the products could be sold for. People "wanted" 1911s, and they were paying big money for them. I wanted one too, and so I stepped up the plate with my wallet, falling right in line with the consumers in whom I placed the blame.
I ended up paying almost a grand for a Kimber, which is what I "wanted" at the time. In retrospect, after handling a friend's Taurus, I discovered that his gun was actually all that I "needed" in a .45 pistol. He paid a little over $500 for his, and the same model is now selling for quite a bit more. I always had the "ewww" reaction while looking at any Taurus auto-loader in a display case, but now, considering the price that most comparable 1911s are being sold for, $500 seems like a steal for a gun of the quality of that which I handled. I think my friend got a hell of a deal, while I had the benefit of learning a valuable lesson.
