As everyone is very aware, the economy has been a rollercoaster ride for the last 15 or so years. The housing market has certainly been in a tailspin but in some areas appears to be making a comeback, especially in Southwest Florida where I live. The job market, which hopefully is starting to turn around, had left over 8% of the people in our country who want to work unemployed. This has also started to improve but studies show that even those who had jobs and were getting raises may have lost some ground in real buying power.
Many hundreds of thousands of others are underemployed and many have just given up and no longer show up in the statistics. Many of us, including myself, have for years looked at our collections of antiques and collectibles as a hedge against inflation and a safe place to put our money during times like these; a part of our long-term retirement plan. This article will look at why this strategy has apparently failed us and the prospects for a comeback.
Three Categories of Antiques
I tend to think of antiques as falling into three broad categories based on their cost. There are the high end pieces priced in the range most of us mortals consider jaw dropping. They include 18th Century furniture by noted makers with outstanding provenance and original finish in good condition, fine art by old masters or very highly regarded contemporary artists; the best of the rare, high quality pieces. These pieces are collected by the very serious and wealthy collectors who are less impacted on a daily basis by the economic ups and downs. The market for these pieces has remained strong throughout the past 10 years.
At the bottom end of the market are items which are inexpensive, fairly common but interesting items. These are the types of things which are often found in flea markets, antique malls, garage sales and on eBay. They generally cost a few dollars up to maybe $50 or $100. They would often be considered impulse purchases since at these prices many people could afford to purchase them without a lot of financial consideration. As we all know, the fun is in the hunt and being able to buy things and this level allows a lot of fun, even in a tight economy. Therefore, from an economy only viewpoint, this level tended to hold up as well.
The middle range was the hardest hit from a purely economic perspective. These are items which range from $100 to several thousand dollars and up. In a down economy a purchase in this range may require considerable thought as the disposable income for those who are most often buyers in this market will have taken a hit. An antique is, after all, not something that people have to have. This type of merchandise was most often found at quality antiques shows, good antiques shops, regional auctions and several online dealer shops like Trocadero, Ruby Lane and others.
Antique Values Fell
The antique market held up for several years after the rest of the economy began to slow down, but then a phenomenon appeared which was even more destructive to the antiques market; an aging collector population. Those who for years had been the buyers of antiques had their houses full of their prized possessions and had no more room for displaying them. As they began to approach their retirement years they started thinking about downsizing and one of the first things to go were their collections. Many were surprised to find that their children did not want them. It seems that lifestyles had changed significantly and so had decorating preferences.
Most people in the following generation were more interested in electronics and the latest technology than “those old things”. Their living and entertaining styles were decidedly more casual so the need for more formal possessionssuch as china, crystal glassware, silver flatware and accessories disappeared. No one was interested in having to polish mom’s and grandma’s silver for which they had no use. Suddenly the marketplace was swamped with silver, cut glass, china and porcelain dinner services, all manner of decorative accessories such as pottery, porcelains, glassware and collectibles in general.
With the lack of popularity of these items the need for china cabinets, cupboards and other furniture also decreased. These were all items for which there were now very few buyers. Therefore supply greatly exceeded demand.As you will remember from your basic economics class, prices began to fall.
One of the exceptions was sterling silver. As the bullion market for silver rapidly began to increase the sterling silver your parents was suddenly sought by those who wanted to melt it down and sell it for scrap. While the bullion prices for silver have cooled considerably it is still high enough to warrant scrap sales. Some silversmiths and intricate designs are bringing higher than scrap prices but not the common ones.
As a result, many dealers have quit the antiques business. Many major shows have closed and those remaining are having problems finding sufficient quality dealers and attracting buying customers. Auction prices realized for most categories, especially in the mid-price range, have plummeted.
What does this mean to you, the antiques collector?
It means your collection is worth a fraction of what it was several years ago. It means that if you need to sell it you will find many fewer people interested in buying and short of an auction may not find buyers at all. If there is an upside it is that if you have your collection insured you can save some money on premiums by having it reappraised at today’s values.
The big question is “Will the market come back and when?”
The general consensus is than the antiques market as it existed in the past will not return. Many items for which there is now no demand will never come back. I would not dare to predict which categories will be back and which will not. I saw an article the other day that predicted that only the high end market would survive and that there will be no low and middle range antiques collected in the future. I don’t think I would go quite that far but I do feel that damaged or lower quality examples will find no market.
The advice which has been offered for years is to buy for enjoyment and not for an expectation they will appreciate. That is still good advice. If there are items you collect and love to have there are some really good prices out there (compared to what you are used to).
Recently appraisers and collectors have noticed numerous advertisements and promotional material from other personal property appraisers who may have completed the Uniform Standards of Professional Appraisal Practice (USPAP) course and describe themselves as a “USPAP Certified Appraiser”. Others may deem their appraisal reports “USPAP Certified Appraisals”. Both of these terms are incorrect and are not approved by the three major property appraisal organizations: the International Society of Appraisers, the Appraisers Association of America and the American Society of Appraisers.
“USPAP Certified Appraiser” and “USPAP CERTIFIED Appraisal” are not designated as a credential and should not be used as one. Users of appraisers, such as collectors, accounts, attorneys, insurance firms etc. should certainly proceed with caution if they see an appraiser stating that they are “USPAP Certified” as it may be an indication that the personal property appraiser is either not properly trained or is being misleading by relying on a false credential.
The use of these false designations and credentials by personal property appraisers has come to the attention of the Appraisal Foundation, which has recently released guidance on the topic. According to the Appraisal Foundation and the Appraisal Qualifications Board, “there is no such credential. The use of the expression ‘USPAP Certified Appraiser’ is misleading. Completing a USPAP course does not entitle one to call oneself a ‘USPAP Certified Appraiser”.
The Appraisal Foundation continues:
One requirement for an appraisal or appraisal review is that the report include the appraisers’ certification that, to the best of his or her knowledge and belief, the work was performed ‘in conformity with the Uniform Standards of Professional Appraisal Practice’. The use of language such as ‘USPAP Certified Appraisal’ could be taken by intended users to mean that there was some independent certification of compliance. If that could be inferred from thee language used, this would also be misleading”.
The fine and decorative art collector who is looking to have his collection appraised should consider how the appraiser represents their credentials. With this guidance, appraisers who have taken the 15 Hour USPAP class and passed the exam, and who have taken the required updated classes, should note that their appraisal reports are written in compliance with the current version of USPAP and the ISA Report Writing Standard. If the appraiser is stating that they are ‘USPAP Certified,” users of appraisers should proceed with caution. As the Appraisal Foundation notes, it is misleading and misrepresents the qualification.
If you have a question about the credentials of your appraiser, contact the appraiser’s organization for clarification. If you have a USPAP question on qualifications, contact the Appraisal Foundation through the Appraisal Qualifications Board.
Reprinted with permission from the International Society of Appraisers
What is an Appraisal?
There seem to be more and more opportunities to take items to an Appraisal Fair, Appraisal Day or other venue and have someone look at it and give you a value.
The question is, when you have attended one of these have you gotten an appraisal?
Technically speaking, what you have just received is not an appraisal. Rather, it is a “Verbal Approximation of Value”. Is it useless or wrong? Not necessarily, it just does not contain all the attributes and components required by the major Appraiser accreditation societies to be considered an appraisal.
Often, the people who are valuing objects at these events are longtime dealers or collectors who specialize in the objects they are examining. Sometimes they are Accredited Appraisers. They have a very good knowledge of their specialty area and the current trends and values.
On television shows like Antiques Roadshow each person giving values is an expert in their area yet what they are giving still must be classified as a Verbal Approximation of Value.
If that’s so, then what is an “appraisal”?
I often have people bring things into my shop with an item that is ‘very old’ so they are certain that it has great value. While age can certainly have an impact on the value it is but one of the many characteristics which go into determining an object’s value. Since all of the several types of value (See How Can There be Different Values for a Single Object?) are inter-related this article will talk about generic value rather than a specific type of value. In addition to these characteristics there are economic, political and market effects which impact value. These will be discussed in a later article.
– since age is the characteristic people most often associate with value it is a logical place to start. Age may have a positive, a negative or no affect at all on the value of personal property. Generally, the value of an antique is enhanced by age. Depreciable property loses value over time. For instance, have you tried to sell a five year old computer or television lately?
Artist or Maker
– In comparing two tables of the same size, design, wood and construction, the one made by a known and respected maker will have a higher value than one by an unknown or lesser known maker. The same is true of paintings, pottery, jewelry and almost any other field.
– an original or authentic item will have more value than a copy or reproduction. In fact, when an item has been reproduced it often will cause the value of the authentic item to go down due to confusion in the market. The harder it is to distinguish the difference the more the value is impacted. Examples are certain Depression Glass patterns, some cast iron toys and other items. Often it requires an expert to distinguish the difference.
– The intrinsic value of the materials can impact the value of an object. A mahogany chest vs. one made of poplar, a gold ring vs. one made of brass, silverplate flatware vs. sterling.
Size or weight
– A 5 carat diamond is worth more than a 1 carat diamond. However, an oversized or exceedingly heavy piece of furniture may be too large or difficult to move to fit in a modern home, thus limiting its market. This also is a factor in what people collect. You can have a thousand buttons or marbles in your collection in a small space. How much room would you need to collect pianos?
– In general, the rarer an item is, the higher its value. A rare baseball card is more valuable than a common one. However, an item can be so rare that there is no collector market for it. Even though an item is very rare other characteristics can result in no collector desirability.
– If one characteristic has to be the most important I would say it is condition. A rare object in poor condition will have greatly reduced or no value. The effect of condition will impact different objects differently. A chip in a piece of Depression Glass or porcelain will have a great impact because there are numerous perfect pieces available and serious collectors of these demand perfection. A chip or glaze flake on a piece of majolica will have less impact because these pieces tended to have these flaws and collectors are more forgiving. Some signs of wear can actually be beneficial for determining authenticity. Antique glass objects should show at least some wear on the bottom; a round antique table top should exhibit signs of shrinkage across the grain; patina and oxidation differences should be evident on wood surfaces. However, broken, replaced, poorly repaired pieces, missing parts, refinish on period furniture and polishing the original patina off of metal objects all can greatly harm value.
– Some subjects are more desirable than others. Prints and paintings with children, dogs or cows are always popular and desirable.
– if all the other characteristics are equal, the object with the highest quality will have the highest value.
– items which are associated with significant historical events are more valuable than similar items which are not. A pen used to sign a treaty is more valuable than an identical pen which was not. Letters from soldiers describing major battles are more valuable than a simple letter home.
Style or Fashion
– As styles and popularity of different fashions change, so does the desirability of items reflecting those styles. This is especially true in antique and vintage jewelry but also for furniture styles and accessories.
– this is the history of ownership of the item as well as any exhibition history. If there are associated with prominent individuals it can greatly enhance the value. For instance John f. Kennedy’s golf clubs which sold for many times what they would have otherwise.