What has Happened to my Antiques Values?

collage1As 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 Fellcollage2

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).

What is an Appraisal?

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?  The answer to this question is “maybe”. Quite a bit has changed since I originally wrote this article  several years ago so an update is definitely in order.

In my article “Are your appraiser’s credentials real?” I discuss credentialing of appraisers. I discuss that, unlike real estate appraisers who must be licensed by the state, there are no such requirements  for licensing of personal property appraisers so how do you know that the person giving you an appraisal is qualified to do so? One of the best ways is to verify that your appraiser is credentialed by one of the major personal property appraisal organizations and that they follow the requirements of the Uniform Standards of Professional Appraisal Practice (USPAP).

All members of the International Society of Appraisers (ISA), of which I am one,  are required to  develop and transmit their appraisals in conformance with USPAP so when the USPAP rules change so do we. USPAP defines an appraisal as an opinion of value. ISA ads “or cost” since we are often asked to estimate  replacement cost for insurance purposes. Consultation, on the other hand, is the act of forming a non-monetary opinion. USPAP also comments that an appraisal must be numerically expressed as a specific amount, a range of numbers or as a relationship (e.g. not more than, not less than).

The question of “what is an appraisal?”, particularly pertaining to appraisal fairs, came from the USPAP’s requirement  that appraisals be transmitted as a written document. This left appraisers who wanted to abide by USPAP but were often asked to participate in appraisal fairs in a quandary. It led to the creation of the term  “Verbal Approximation of Value”.  If an ISA appraiser wanted to do appraisal fairs they would have the customer read a document that said they were getting a verbal approximation of value “which was not an appraisal because of limited research opportunity and the report was not in writing”. This was not a very satisfying solution. After much discussion between the members of the Appraisal Standards Board (the governing body responsible for USPAP) and representatives of the various appraisal organizations USPAP declared that the transmission of an appraisal result could being writing, as a digital file or verbally. They said,  you are giving an opinion of value while acting as an appraiser therefore an ISA appraiser is required to comply with all the requirements of USPAP including explaining the objective, the approach to value and the intended use as well as keeping a work file.

So, when might you want a verbal appraisal as opposed to a written one. There are really quite a few circumstances. The most important consideration is what is the intended use of the appraisal?  You certainly need a written report if you are donating  something and need a value for a tax deduction. If you are going to use the values for obtaining insurance coverage or for filing a damage claim. Anything that might be used in a court case such as a divorce settlement. All these would need a written report. However, if you are pricing items for a garage sale or want to know what might need an appraisal and what does not or you need a walk-thru just for equitable distribution. Part of the appraiser’s job is to help determine what you need in light of what your intended use is and to recommend the most economical approach that meets your needs.

So, is what you are getting at an appraisal fair an appraisal? The answer is yes. Is it being done in compliance with accepted appraisal guidelines and methodology? That depends on the appraiser.

For a more detailed discussion see “Why do I Need an Appraisal?”

For a discussion on different types of value see “How can there be Different Values for a Single Object?”

For more information, contact:

Michael Logan via email or

 call
941.209.0850

Serving Punta Gorda, Fl, Port
Charlotte, FL, Sarasota, FL, Fort Myers, FL, Naples, FL and all of SW Fl