RINKER ON COLLECTIBLES — Column #1320

Copyright © Rinker Enterprises, Inc. 2012

The Stability Line

Historically, antiques and collectibles secondary market prices were stable, varying little more than plus or minus five percent year after year.  Occasionally, a collecting category would “run.”  Prices increased at a rapid rate for one to three years.  Although individual collecting categories were linked to a greater whole, each acted independently.

The 2008 Great Recession (Little Depression) ended this collecting category independence.  The entire antiques and collectibles market suffered a decline, a phenomenon never before witnessed within the trade.  Values fell for common (low-end) and above average (middle market) material in all collecting categories.  No collecting category was immune.

[Author’s Aside:  The strength of a collecting category is measured by the success of its common and above average pieces.  It is a mistake to measure a collecting category’s strength based upon its high-end market, which often remains strong even in a soft or down market.]

As prices declined, many in the antiques and collectibles community lost sight of the fact that eventually every collecting category reaches a point where its common and above average pieces achieve an affordable purchase price point capable of attracting new buyers—not necessarily collectors but buyers none the less.

A May 9, 2012, e-mail from Darwin in response to a blog I wrote for www.rubylane.com reminded me of this.  “You mentioned EAPG [Early American Pattern Glass] and I am Happy today to purchase Spooners for $10 at Antique shows and estate sales and sell them for $25.  I know it is not the $35-$65+ as in the old days, but it is still good business (better than the interest on a savings account)!

“Another example: Hummels are selling!  it may not be at the prices once received; but back in the 1980’s, I loved Hummels and was not able to pay the High prices (remember that Hummels only cost about $4.99 after the war)  So I am happy today that I can collect these beautiful hand painted figurines in the $20-50 range some are still in the $$$$$ range.  Don’t cut these collectibles short.  (The price is better than doo-dads at walmart).  In the old days it may take 6 months to sell an item and with the internet it may only take 6 days.”

In 1988, Arbor House, an imprint of William Morrow, published my How to Make the Most of Your Investments in Antiques and Collectibles: The First Insider’s Guide to Manipulating the Antiques and Collectibles Markets to Maximize Your Investment.  Every time I quote the title, I have to pause in the middle to take a breath.

When I wrote the book 25 years ago, I was a strong proponent of the cyclical market theory, one in which collecting categories ran hot, cooled off, ran hot, cooled off – the pattern occurring ad infinitum.  Time proved my assumption wrong.  Today, I maintain: (1) most collecting categories, over 90 percent, will not recycle and (2) those that do recycle will do so irregularly and not on an easily predictable basis.

In the first chapter of How to Make the Most of Your Investments in Antiques and Collectibles, I proposed a seven-point “Market Movement Graph” to explain collecting category runs.  The seven key points were the old stability line, takeoff, run, peak, level, fallback, and new stability line.  Two assumptions in the “Market Movement Graph” were: (a) collecting category runs were limited in time and (b) the new stability line leveled at a price point above the old stability line.

There were a few exceptions where the new stability line fell below the old stability line.  The 1980s oriental carpet craze is one example.  When the Persians (Iranians) and West German buyers withdrew from the secondary market in the late 1980s, its collapse was total.  Examples sold for pennies on the high-market dollar.  Almost 30 years later, the common and above average oriental carpets still are struggling to recapture their mid-1980s highs.

My 1988 stability line price concept still is valid.  “A new stability line is reached when the fallback stops.  There are no major price increases or decreases for several months, only the normal deviation pattern of plus or minus five percent.

“Objects from the collecting category do not disappear entirely from shops, booths, and auction houses.  There still is some buying activity in the new stability line.  However, the trade papers relegate information about the category to the middle and back sections.  In many cases, it disappears entirely.  The trade papers report about what is hot, not what is not….

“After five years, the new stability line is designated an old stability line.  Intense selling activity in the category has totally disappeared.  A few dedicated collectors are left, to be joined occasionally by a new recruit.”

Darwin is correct in suggesting, indirectly, that new stability lines have developed for many collecting categories in the antiques and collectible field.  The difference between the 1990s new stability lines and 2012 new stability lines is that the 2012 new stability lines are substantially below their pre-2008 starting points.

The antiques and collectibles trade learned two lessons from the late 1980s economic recession.  First, there is a price point at which every object will not sell.  Second, pieces and collecting categories can price themselves out of the market.

Is the reverse true and, if so, is this a lesson to be learned from the 2008 Great Recession?  Is there a price point at which every object will sell, even common and above average objects?  The answer is yes.  Given this, why did it take me so long to realize this?

The decline of the printed general antiques and collectibles price guide is the first reason.  I no longer use these references.  With the exception of Terry Kovel, the editors of these guides whose research methodology I trusted no longer serve as editors.  Further, the remaining general guides and most specialized reference guides are market props.  Their prices do not accurately reflect the selling prices of objects in the field and, more important, on the internet.  Although the importance of eBay in the antiques and collectibles trade has diminished, its sell-through prices, not “Buy It Now” prices, still accurately reflect worth.

My visits to antiques and collectibles flea markets, malls, shops, and shows produce confusing messages.  There is no price consistency.  Further, it is difficult to tell what objects are selling through and what are not.

Although I write about collector, decorator, and reuse value, I still find myself thinking primarily in terms of collector value.  Old concepts die hard.  Darwin’s Early American Pattern Glass and Hummel examples are clear indicators that decorator/nostalgia and reuse values are more important than collector value.  While I am not certain why someone would pay $25.00 to buy an EAPG spooner, I know it is not to hold spoons.

Finally, too much information is not necessarily good.  The internet has created information overload.  There are not enough hours in the day to view all the data available at hundreds of antiques and collectibles internet sites.  Compilation sites such as WorthPoint.com are helpful.  But, the information found on them is raw data.  It needs to be interpreted to be understood and placed into proper context.

Rinker Enterprises and Harry L. Rinker are on the Internet.  Check out www.harryrinker.com.

You can listen and participate in WHATCHA GOT?, Harry’s antiques and collectibles radio call-in show, on Sunday mornings between 8:00 AM and 10:00 AM Eastern Time.  If you cannot find it on a station in your area, WHATCHA GOT? streams live on the Internet at www.gcnlive.com.

SELL, KEEP OR TOSS?  HOW TO DOWNSIZE A HOME, SETTLE AN ESTATE, AND APPRAISE PERSONAL PROPERTY (House of Collectibles, an imprint of the Random House Information Group, $16.95), Harry’s latest book, is available at your favorite bookstore and via www.harryrinker.com.