The “go-go” years of the antiques trade in the 1980s relished the economy’s inflationary bias. The effect on prices for these objects was devastating, in a good way. Prices, like homes values prior to the present “Great Recession” had no where to go but up, up, up. As long as I can conceive of pricing in this industry, the possibility of a contraction was not only remote, but strictly limited to small segments that might go out of fashion. The comparison to real estate is uncomfortably similar.
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Real property and antiques are tangible in a different manner than gold, jewelry, or stocks & bonds. Real estate and an 18th Century chair take up space and require care and maintenance; they don’t fit into a safe deposit box unless you want to pay rent to store it in a warehouse like Christie’s new facility outside of Manhattan. Of course that way you can deduct not having any aesthetic pleasure from its asset value on top of the storage rental! But the difference between real estate and antiques splits off when you think that you can’t overbuild antiques like houses.
Anyone who has been involved in the antiques market knows that this field and the art segment of the industry are different. The two sometime go in tandem, but the 1980’s saw a definite divergence when art and especially Impressionist art prices collapsed with the Japanese art investment bubble. That time period however, was pretty good for antiques and they were in fashion. But in my mind, it was the first time the industry had actually experienced a deflationary cycle. Prices in that art category fell for several years and even today its market demand has been commandeered by contemporary art.
Are we now seeing this in the antiques business? Prices are not what they were, period. The deflationary effect of oversupply and contracting demand is self evident. The present environment does still create record prices both from auctions and private transaction for many items, but as a broad based industry trend, even the red hot mid-20th Century decorative arts period has hit a bit of a wall.
Like real estate, antiques need an increase in demand to strengthen any form of market price support; we don’t and never did it with mortgages or sub-prime loans. Deflation in the pricing of antiques has become the new reality of the market. With interest rates skewed to the haves and have-nots, financing a purchase is not an option. The present state of affairs could be systemic, or just a short term casualty from the existing economy, perhaps even a long overdue price correction. In the end we are subject to the whim of the market, and if deflation is even on the minds of the Federal Reserve Board, they can take a glimpse at this market to see the possibility.
Lewis
David Lindquist
November 10, 2012
While I think you have analyzed the deflated market perfectly, two aspects deserve additional comment from my perspective. One is a negative for the antiques field, one a positive. As a consultant to appraisers throughout the country I often get some of the blow-back of client shock that their collections have seen massive deflation, with only the few exceptions to which Lewis has alluded. Dealers were for too long still portraying a market deflating for the past ten years incorrectly, telling clients what a safe investment they were making, instead of telling them they were investing in a pleasurable life style and that at the end these items–as opposed to new items–would have some, hopefully considerable, residual value.
But the positive may be the salvation of the business and may lead to firming and then inflating values–antiques and the decorative arts are now, as they were until the late 1970′s, less expensive than buying new. This means that the mystique, history and beauty of antiques can be acquired by YOUNG couples for the same or less than new. We are seeing our clientele trending younger through every show and through our shop trade. And this season they are buying furniture at a rate we have not seen for five years. And the design/shelter magazines are simply packed with homes and apartments blending fine antiques with comfortable modern–another positive trend, as the designers always ferret out the bargains (profit margin?).
http://www.whitehallantiques.com
Lewis Baer
November 10, 2012
David,
You are spot on regarding this industry being able to attract YOUNG individuals as well as couples. It is the antiques trade most spectacular opportunity. While price can and should be a consideration for all decorative arts, if you can’t acquire a taste for these items their greatest value is not appreciated. Shelter magazines are definitely getting the message from the designers they feature.
And if you really want to know a secret from my “investment” point of view, buy, buy, buy, control, control, control.
Lewis
Ian Harris
November 14, 2012
I have never sold antiques as an investment, other than an investment in pleasure, let alone offered to buy them back at a profit, as some foolish dealers did in the go-go years. Good quality jewellery, other than fine signed pieces, is the same or less as 10 years ago, which means reselling will return half if you’re lucky. A fine silver coffee pot that might have sold retail for £18,000 twenty years ago, you’d be lucky to get £6,000 for today, and that’s after 20 years of inflation-a disaster! Some very rare collectable pieces have gone up, but the middle-class appetite for silver on the dining table has largely evaporated. Too many burglaries, as well. It is impossible to predict the vagaries of the market, which is largely geared to the equally unpredictable economy. Who foresaw the present economic crisis throughout the West? I’m just waiting for it to impact on the ridiculous prices hideous and over-hyped modern art is fetching, principally to impress other gullible rich people with how rich you are.
Ian
http://www.nbloom.com
godsotherson
November 14, 2012
If you bought the coffee pot twenty years ago, others would have said the same thing you now say about modern art. If you had bought modern art twenty years ago, how would you describe today’s prices? The markets all look different depending on where you stand to view them. They always did and always will.
David Mayernik
November 18, 2012
I think we’ve seen a seismic shift in taste, or its lack, in the last two decades. Younger people don’t appreciate antiques, don’t know anything about them, and aren’t willing to invest the time to learn about them. Fashion in architecture has swerved hard toward the tech and the minimalist, both antithetical to high style old style. A serious education campaign has to happen in order to create a new market that appreciates traditional decorative and fine arts, or the situation will only get worse.
David
http://www.davidmayernik.com
Alex
November 24, 2012
I agree with David. Reaching out to new buyers in the US is critical to this process. Research the changes now happening in the US and elsewhere and consider who will constitute the largest segments and market. Ignore the changes and the market will likely continue to shrink.
Alex Honchamondo