RINKER ON COLLECTIBLES — Column #1376

Copyright © Harry Rinker, LLC 2013

The Recovery Has Started

In recent weeks, I have spoken with over a dozen auctioneers, trade paper editors, dealers, and show promoters about the current state of the market.  Three universal themes emerged from our conversations: (1) market prices have stabilized, (2) a tentative recovery is underway, and (3) while some regions still have not experienced the turnaround, a spirit of optimism prevails.  This is very good news.  Life is much better this summer (2013) than a year ago.

Prices in the secondary antiques and collectibles market have been stable for almost a year, supporting the supposition that there is a minimum price at which every antique and collectible will sell.  While the minimum price may not please older dealers, especially those who paid more for an item than they can receive when selling it, there is a minimum price.  Late 19th century and early 20th century pattern glass goblets find buyers at $4.00 to $6.00.  The fact that the buyers are using the goblets for drinking as opposed to collecting purposes is irrelevant.  Pattern glass goblets are being preserved instead of sent to the landfill.

Dealers are selling antiques and collectibles again because of lower prices.  The 2010s market is a volume market driven by customer demand.  Dealers recognize and accept that their customers are more decorative and reuse than collecting oriented.  Antiques and some collectibles dealers, especially those selling material from the mid-1920s through the early 1960s, are no longer in a position to dictate to their customers what they should and should not buy.  Customers know what they want.  The trade either supplies it or not.  If not, the customers will go somewhere else.

[Author’s Aside #1:  There are two exceptions.  Traditional antiques dealers who cling to the premise that their objects are still worth the prices found in decades-old printed price guides continue to fail to attract new customers.  Their collector base is dying.  The dealers themselves are vanishing from the show circuit.

The high-end market is the second exception.  It remains strong across the collecting spectrum.  The top two to three percent in any collecting category continues to sell at top dollar.  Record auction prices continue, albeit they are being paid more by investor-speculators than collectors.]

Flea market and antiques and collectibles show attendance is increasing.  Although antiques and collectibles show dealer decline has stabilized, show promoters continue to be concerned about the advancing age of many dealers.  The good news is a steady growth of young dealers in the flea market circuit.  While not every flea market dealer advances to the antiques and collectibles show circuit, some do.  There is a mobility ladder in the trade – flea market to show dealer is one of the upward steps.

Auctioneers continue to adjust their selling practices in response to the digital age.  The role of the internet buyer continues to increase.  In late May 2013, I talked with Sandy Alderfer from Alderfer Auction & Appraisal in Hatfield, Pennsylvania.  He told me that Alderfer’s sold its fleet of moving vans and warehouse.  Items intended for sale at the Auction Gallery are now put into lots at the site of the consignor.  Items not selected for sale at the Auction Gallery are photographed and assigned to an online auction.  Local winners are required to visit the consignor site to pick up the items they purchased.  Sandy Alderfer and his staff recognized the necessity to change and did.

The back porch auctioneer is an endangered species, having vanished completely in some parts of the country.  The same is true for the local auctioneer selling $5.00 to $50.00 lots in a rented fire or social hall.  They are being replaced by estate sale specialists.  In some markets, the estate sale is the primary method of disposing of household contents.  No one knows better than an estate sale specialist the value of stable secondary market prices.

Historically, the antiques and collectibles secondary market relied heavily on the ability of dealers to predict what individuals want and what they were willing to pay.  This worked when collectors were the primary buyer.  Once decorators and those buying for reuse became the primary buyers, the market became trendy.  Dealers lost the ability to adequately predict future need.  What sold one month at a flea market, mall, or show, failed to sell in the months that followed.

Now that prices have stabilized, a greater level of future predictability is possible.  By tracking sell through prices on eBay, observing what other dealers are selling, and listening to customer requests, dealers are able to effectively price merchandise so it sells through.  In order to achieve this, dealers adjusted their buying price, much to the disappoint of sellers who think, thanks to a misinterpretation of prices seen on reality television shows, the wholesale values of their things are far higher than they actually are.

The recovery is tenuous.  The maxim “it is too good to be true” applies.  Three good economic months does not necessarily signify a recovery, but it is a good start.  The antiques and collectibles trade is taking a wait and see approach and wisely so.

Attitude plays as much a role in recovery as economic stability and gain.  What I am finding is a rebirth of an optimistic attitude at all levels of the trade – auctioneer, buyer, dealers, mall manager, and show promoter.

Although the level of discretionary income is rising, individuals are spending it conservatively.  Competition for these dollars is and will remain intense.  A smaller portion than in the past will be spent on antiques and collectibles.

Historically, there was a time when the antiques and collectibles trade operated in an economic vacuum.  By the early 1990s, the trade’s fortune was linked to the national economy.  In the 2010s, it is tied to the global economy.  Hence, good national and global economic news positively impacts the trade.  In 2013, the good economic news is primarily national.  Housing prices and starts are increasing.  Unemployment has reached acceptable levels.  Theoretically, anyone who wants a job can find one, alas not always at a salary they feel they deserve.  The Dow Jones Industrial Index achieved a record high in May.  15,000 is the new magic number.  New car sales are up.  Walt Disney raised the daily admission price at Disney World.

Globally, the news is not as good.  Unemployment in the Euro-Zone is the highest it has ever been.  Greece, Italy, Spain, and other Mediterranean countries are a long way from solving their financial problems.  Unrest in the Middle East continues.  Global stock markets fluctuate one to three percentage points per day.  While America is not immune from global economic forces, the impact role they play has lessened over the past six months.

Cautious optimism remains the best approach.  If the current economic picture holds for the next six months, “caution” can be dropped.

There are regions of the country that lag six months to a year behind the rest.  The Oregon coast is one example.  I measure recovery in the trade based upon how the low and middle segments of the market are performing.  Full recovery occurs only when all regions experience growth.

In a conversation with Barb Stillman of The Antique Register (Arizona), she told me about an antiques mall that reported that 25 percent of its customers were under 30.  The owner pointed out that the younger customers bought items primarily for decorating and reuse.  Who cares?  They were buying.

[Author’s Aside #2:  Are there signs of recovery where you live?  If yes, what form is it taking?  Share your observations with me at harrylrinker@aol.com.]

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 and is archived 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, $17.99), Harry’s latest book, is available at your favorite bookstore and via www.harryrinker.com.