Today I received a message from a potential seller, for whom I had conducted an auction evaluation (not an appraisal, more about that later…), who assumed, after digesting the values I projected, that some factor of the economy must be at play here, and that was the cause for the – as she saw them– low values for her items.
Rather than respond to that statement, I chose to create this memo, outlining the reasons for today’s changing values for antiques.
Before delving in to the changing market, let’s address one misconception regarding the use of the word “appraisal”. An appraisal is a written document, prepared by a qualified (and sometimes certified) individual with experience in the subject property to be evaluated. An appraisal is most commonly prepared for estate settlement, dissolution of marriage, equitable division of assets between heirs, or insurance replacement. There are different methods of valuation applied for each purpose.
For example, an insurance replacement valuation often reflects much higher values than the actual secondary market value, as it assumes that high-retail must be paid to replace the item lost. An insurance appraisal cannot be relied upon when making a decision to sell.
Many people ask for an appraisal, when all they really need is a market evaluation. In the same way that a real estate broker will prepare a CMA (Comparative Market Analysis) for a prospective seller, we can prepare an estimate of value for jewelry, art or antiques. Although the same historic sales data will be utilized, there is different methodology to be applied, and this estimate will usually incur no charge to the prospective seller. An appraisal is a different ballgame, used for different purposes (most often legal proceedings) and subject to terms and conditions.
It’s Not the Economy
First, antiques values are a result of supply and demand, just like any other commodity. Second, antiques purchases are often driven by nostalgia- that is, the purchaser has some recollection of their own “good ‘ol days”, and the item purchased can be a reminder of those times. Third, and of consideration today, is that some buyers will purchase antiques or art with an investment mindset; they believe that as time passes the value of the item will increase. Let’s address these one by one.
But It Is Economics
On the first point, supply and demand, we must examine generational and cultural values. The previous generation of antiques and art consumers (those who were actively buying between the mid 1980s and the early part of the 2000s) sought items of a certain style- most being traditional or period-style in nature-, and a perceived shortage of those items produced a demand that resulted in high prices. Finding a great Victorian rosewood marble top table, especially pieces by high-end makers, or those with a dog finial was a rare opportunity, and often resulted at competitive bidding that usually topped expectations.
People with disposable income, and a level of success, wanted those things that they (or even their depression-era parents) couldn’t afford in the past. Having fine antiques was a sign of success, and a source of pride. BUT, the children of those people only remember these items that were acquired in the 1990s as “That stuff we couldn’t sit on or touch”.
Which brings us to the second point
GenX, GenY and Millenials are not interested in preserving the past through “stuff”. Their lifestyles are more fluid, they marry later in life than did previous generations, owning a home isn’t high on the list of priorities and having children happens somewhere in there, but not an urgent priority. They recall the materialism that drove many cultural and social aspects of their parents’ generation, and are dismissive of that trend.
Members of these generations seek experiences, they want to travel and they desire jobs that give them meaning and a sense of purpose. Having fineries in the home is not anywhere on the radar. They don’t host dinner parties with sterling silver, fine china and crystal. Collecting porcelain figurines makes no sense at all. They don’t feel a connection to family heirlooms, primarily because their parents’ grandparents are just history to them.
So now, in 2018, the generation previously responsible for driving prices and demand for antiques are now downsizing, “right-sizing”, passing away, or moving to their Florida home. As such, all their treasures must now be transferred or liquidated, through one method or another. As illustrated above, their kids don’t want “grandma’s dishes” (which is an industry term used among auctioneers and antique dealers, illustrating that nobody’s children want any of their stuff), so these items must be sold. So now we revert to point (1) above, and we have an oversupply of items that have lessened demand. As a result, prices have dropped significantly.
We have experienced values for mid-priced antiques to be as little as 20% of what the same item sold for 20 years ago. I have seen other estimates that reflect prices have dropped 90%. These days, some items that formerly had value are best donated to Goodwill, but other items that had minimal interest 20 years ago are finding new footing. The secondary market is changing rapidly, almost as fast as technology, but that’s another story for another day.
And now to point number three
In the 1980s, as the economy recovered from 20% mortgage rates and the Savings and Loan Crisis (bailout), and as people started to gain disposable income at the end of that decade, prices for antiques began to rise. And then, also back to point (1) we have people of means competing for the same items, driving prices upward. Record sales begin to be achieved for rare objets d’art and fine art by historic painters from Rembrandt to Dali. Prices are increasing so regularly, that a mindset of investment begins to develop. Purchasers of all kinds of antiques- primitive to period-style, Renaissance to Post-Modern, Herter Bros to Hunzinger- begin to assume that this trend will continue. The investment mindset becomes pervasive, and commonly dispersed among dealers and collectors is the belief that “the older this stuff gets, the more valuable it will become”.
I recently evaluated a collection of Lladro porcelain (Spanish-made figurines) that was purchased in the 1980s and 1990s by the collector with the sole purpose that the figurines’ increasing value would provide for a college education for her grandchildren. Two weeks ago, in the Antique Week (a regional trade publication) a story appeared in which a national survey had revealed the 10 most devalued collectibles in the last two decades. Lladro porcelain was on that list. Many other categories of collectibles have devalued considerably over the last two decades, as a new generation of buyer eschews the need to “collect” things.
Take a guess- what is one of the hardest items of furniture for us to sell these days? Made your guess…?? If you said “china cabinet”, you’d be right. Since today’s buyer doesn’t collect dishes or knick-knacks or Lladro figurines, they don’t need a place to store them. And many new homes today don’t even have formal dining rooms (at least in the sense that they formerly did), so there’s no place for a 12-place Chippendale dining room suite with a china cabinet, server and buffet.
It’s not all doom and gloom, though
While many things that were sought after in the 1980s, 1990s and 2000s are now worth much less than they were, there are other items that are taking their place. For example, limited edition prints by post-modernist artists (Chagall, Dali, Miro, Picasso, etc.) were considered the bottom of the barrel years ago. Limited edition prints are not rare (I mean, there are at least 350 of them, right?), but they are finding an increased market due to a change in decorating styles. Painted, repurposed furniture is finding a market from younger buyers looking for something “different”. Old mine-cut diamonds (that were formerly not desirable) are finding a market, from those seeking unique styles and simplistic cut.
Regardless of current markets, Wickliff Auctioneers is still committed to offering items of quality, as we always have. Current trends indicate that some items of quality aren’t finding as receptive of a market as they formerly did, but we have cultivated a market of buyers that appreciate fine things, and we are confident that our worldwide marketing of these items will achieve market value, whatever that value may be.
I’ve always shared with buyer clients who ask “what should I buy?” that you should buy what you like. Buy those things that you can live with and enjoy. But when it’s time to sell, don’t assume that the next buyer will have the exact same tastes as you. If you get some portion of your money back when you sell, bully for you. If you don’t, the “investment” you made was in your own enjoyment of the thing, or that you might have spurred a conversation with a visitor about the item that increased the visitor’s knowledge and interest in the thing, too.
To play at the “investment” level when it comes to art and antiques, requires a shrewd, emotionless investor, who is able to objectively analyze data and market trends, and make buy/sell decisions based on market activity. There are other investment vehicles that require less speculation and can be more easily managed by most folks, much more easily than managing an art and antiques collection. Talk to your investment broker.
Buying quality items at auction, or where ever you choose to buy secondary market items, is fun. It’s a worthwhile engagement to seek out quality furnishings, quality art, jewelry or items that provide consistent use and enjoyment. Second-hand is always better, as in most cases the initial depreciation was absorbed by the first purchaser, just like an automobile. Go buy good stuff, make deals, meet people and have fun.
As a final word… All of the things with which we surround ourselves- art, antiques, furniture, cars, houses, etc- do not define us. Place above these things those activities that feed the soul and could contribute to making this world a better place. Donate time and/or treasure to a worthwhile charity, be courteous to strangers, be kind to neighbors, build meaningful relationships, and cherish family. Some of you will recognize that commentary as a loose paraphrase of Matthew 6:33, the verse my grandmother inscribed on my college graduation card in 1987. Some twenty years later, I figured out what she was telling me.