May 4, 2019

Values change. They go up, they go down, they remain the same, they go flat, and then the cycle begins again. This cycle has been happening for thousands of years and across all markets, segments, and economies. Why would antiques be subject to different trends? You must think your antiques have dropped in value; otherwise, you wouldn't be looking up "why have antiques dropped in value" online. While everyone's financial perspective on this subject is unique, the underlying inquiry for this question is, "have antiques dropped in value"? What does this question mean, and what would give you the idea that your antiques have lost value? Is it based on the price you paid initially? The amount someone told you your antiques were worth years ago? If so, what was that value based on? Research? Analytics? Someone's opinion, some marketing trick or gimmick? Did someone recently tell you your pieces are not worth much, all the while making you a "fair" offer for your old dirty unpopular stuff? Unfortuntunitley this question has no one simple answer. 

I often find that the value of antiques is very subjective. If you paid nothing for a table and I bought it from you for twenty-five dollars, would you think that your table lost value? If you spent five hundred dollars on a table and I bought it from you for fifty dollars or even five thousand dollars, would you think the same? What if you saw a table just like it sell at auction for five hundred thousand dollars after I paid you the five thousand? How about then? You would probably feel sick. The value of antiques is about perspective, and so this idea of antiques dropping in value may be based on several things. You may have paid to much for what you bought, your things are not worth what you thought they were worth either now or when you originally bought them, or sometimes, the market does things that are outside of your control, such as when the auction market begins underestimating the values of art and antiques by ten to twenty times less than the actual market value such as the Chinese antique market and the auction estimates placed on that property. That is why you see Chinese antiques with fifty to eighty dollar estimates at auction sell for one hundred thousand dollars. It becomes a fad, and suddenly everyone at every auction house estimates Chinese art at estimates similar to those found on the same property over twenty years ago, even though the market has seen a massive spike in values since 2008. The only sellers willing to take that risk these days are usually people that have passed away, and their estates are making the decision, or the pieces the seller consigns are knowingly fake, and the seller doesn't care what financial risk they assume. Any price is fine, and honestly, sometimes fake antiques sell better than the real thing as they are in far better condition.

Outside of irrational market forces that one cannot control, like the example of the Chinese antique market, let's look at the things you can control, such as the prices you pay in the first place. Let's give you a hypothetical story, although I am sure I can quickly think of thousands of stories that are almost identical to this one. Forty-five years ago, when you first decided to decorate your home, you chose to fill it with these cute little figurines called Hummels. You found a very reliable retailer that was able to receive orders directly from the Hummel factory, and based on a list that included all the prices; you could order them as you desired. Every shelf and nook in your home was filled with these little figurines, and you enjoyed them until yesterday when you decided it was finally time to move to a smaller abode and bring your mint condition Hummel collection still with the original boxes to market. Hopefully, to be enjoyed for another 45 years as you had enjoyed them by another collector such as yourself.

You decided to ask a few dealers and Hummel specialists over to appraise your collection for market value purposes, and to your shock and surprise, the bill for the appraisal costs more than your entire collection. Forget what you paid, that it seems was a fore-gone-era. Now some people will argue that 45-year-old items are not antiques, some will say that they aren't even vintage; however, for the purposes of this article, it will suffice.

Now, this isn't only an article about Hummel's, collectibles, and lower-end priced items. Aside from Hummels, some franchise collectibles such as the Charles Schulz franchise and vintage Peanut collectibles retain a loyal following and have seen their values steadily increase. Some sites do a fine job presenting unique Peanuts collectibles for sale. The values have remained somewhere steady over the years. Collect Peanuts is one example of a site that caters to a unique collectibles market and All The Decor is another. Each has a unique selection of Peanuts characters and Snoopy character items, but those markets by in large are exceptions with regards to many retail and secondary markets for collectibles. I could also go on about tulips and tulip mania, and I am confident you probably don't collect them nor see them as investments. 

I find these days on the internet; terms are becoming more nebulous than ever — antique, vintage, modern, etc. Rarely anymore does the term "antique" mean an item is 100+ years old, regardless of what your dictionary or your grandmother told you, and rarely does vintage mean an item is a minimum of 20 years old. What is vintage decor anyway? There interesting articles that delve further into the subject, of what is vintage, and I have included some information herein. So when people want to know why their antiques have dropped in value, rarely does this solely refer to things that are only over 100 years old. Today we have an evolving concept of new and not new and not new can be described as a lot of different titles. 

So back to our original question, why have antiques dropped in value? Often, I am asked about the general value of art and antiques in today's market? Such as "how is the art and antique market doing? Alternatively, many people that own antiques have heard that the antique market is not doing well and are looking for a professional to reaffirm this idea or provide some insight.

I think as with any market intelligence, people look for one answer to their question. Yes, the market is good, or no the market is terrible. I think the first mistake anyone makes in attempting to understand an exchange is to consider that an entire market moves as a whole and entirely in one direction. The art market, the antique market, the vintage market, the classical Chinese painting market, the federal American furniture market, the post-war-contemporary art market. In my mind, these titles all represent separate markets and may have a different pool of market participants altogether. These categories may not be related at all with the exception that they are being sold in the same venue and, depending on the scheduling, may have some cross-over buyers as a matter of convenience or coincidence. Maybe the buyer that is buying antique paintings also realized they also need a chair, and so it begins.

These categories may not even move in one single market within their own category. Individual pieces of federal American furniture may sell better or worse than others, and that indeed happens. It is becoming an increasingly common theme that in some auction sales, 5% of the lots are representing more than 50% of the entire sale proceeds. That means that in an auction that consists of 100 lots. Five lots are selling for more money than half of the wholesale of 100 lots. Sometimes that number is even significantly, perhaps 75-80%. You may see a press release after the sale that says the market is exploding with growth, but in fact, the market is separating and experiencing an explosive shift that is eliminating value in 95% of the items in that given sale. Marketing is a heck of a thing if you know how to spin it. To me, that means that my consignment in that sale has a 95% chance of not selling well at all. Not the highest odds, if I was a gambler.

There is a saying in the stock market, buy low, sell high: The idea of the value of antiques rising or falling in value to me is only relative to the price point in which they are being referred to, which means the price that was initially paid and the value of the currency paid for those items at the time they were purchased. To me, the question of antiques losing value is really about how much it was initially paid for it.

The Hummel buyer that began our story lost because to start with, they purchased their Hummel's when they were brand new and without a great deal of understanding of the retail market for new décor and collectibles. I am also aware in the case of our Hummel market study that during specific periods dealers were charging a good deal for used Hummel's, but again many buyers for these pieces were doing so without a good deal of understanding of the market. These days when someone wants to acquire Hummel's, they generally conduct detailed market analysis and go to global exchanges were Hummel's openly trade. There you will find that are many sellers offering Hummel's and few bids and so the price points react accordingly. If this sounds ridiculous to you, what do you think e-commerce venues are? Bids, offers, they are exchanges. The global transparency of these markets had changed the parameters of the market before you had a dealer standing at a table in some rented out college hall that was selling Hummels in some antique and craft fair. If someone wanted to know the value of the dealer's inventory, they might have had to refer to some book that was organized at the beginning of the year based on global sales and a general feeling of talking to key specialized sellers of those particular assets. Yes, even Hummel's can be referred to as assets. These days a buyer approaches that sellers table with real-time exchange data on their phone. A buyer may generally have an idea of the global availability of that particular item and the going market price. Informed buyers are far less likely to overpay or at least enter into a transaction without being informed on market data. What that means is more buyers are less likely to feel their "antiques have lost value" because they entered the deal at a more informed price point.

Back during the Victorian era, Piano shawls were all the rage and extremely expensive, with some costing thousands of dollars over a hundred plus years ago. Today depending on a variety of conditions, a shawl could sell for 100 dollars. Of course, some shawls are rare and sell for 10,000 dollars or more. However, if you calculate inflation and the fact that most shawls don't trade for anything close to 10,000 dollars these days, an observer could safely make the statement that the shawl market hasn't really kept up with the times. Had you purchased a shawl in 1890 for 10 cents on the other hand and attempted to sell it today, if you kept it in good condition, you would be able to sell for much more than you originally paid for it. This concept of a beginning price and ending price is relevant to one's understanding of the value and how an item loses value or gains value. Everything increases in value or loses value relative to the initial starting point. At the same time, these Shawls like the Hummel's were new when they were purchased. New purchase prices have no relation to not new purchase prices, but many buyers initially fail to make this distinction. This can make venues like Artzze a great place to purchase. 

The real issue underneath why antiques have dropped in value is not about a rising market or a dropping market but about market fluctuations. Let's say you inherited an item from a family member; they found this item on the street. Their investment in this item was $0, and by inheriting it, let's say your cost into this item is also zero. Now anything you sell it for is a profit. However, when you attempted to sell it last year, you were offered 10 dollars, and this year you were offered 5 dollars. Why?

Some people will tell you about the changing popularity of items, and this may be true to some extent. People generally don't want the same type of antique furniture or decor they wanted 30 years ago. I don't entirely agree. Buyers may be more sophisticated than they were 30 years ago, and there may be fewer people that want those items now, but the price, to some extent, can still be obtained within reason.

More and more values obtaining better or lesser values are about the venue in which they are sold. Some venues are lousy for getting a better price, and some venues are tremendous like Artzze, but commonly a component of obtaining a better price is also about timing. It may take time to extract the value you are looking for. Sometimes a seller's concept of value will never be realized. Someone asking a million dollars for a $200-dollar table will probably never find a buyer in their lifetime or any other lifetime.

Why antiques lose or gain value is a ratio of component parts consisting of the following variables: Supply, demand, visibility, venue, marketing, and timing. Depending on your position, your antiques or art may have lost value the minute you purchased them, or you may have gained value the moment you acquired the piece. On the other hand, prices fluctuate for a variety of reasons as well, but most of the reasons for these fluctuations include components of the above variables.