Quarterly Market Report: 4th Qtr 2014 December 1st, 2014 ADVISORY - Getting Worse for Dealers The current market is stagnant for a long-lasting reason: changing demographics which I first noticed in January of 1991. Its an Econ 101 lesson plain and simple. I remember several of my profs from the 1970s and early 1980s tell us students about the python and the bolus. The timeline from 1945 to the present is the snake and we the Boomers are the bolus moving through the conduit. The bolus effected/effects every aspect of the marketplace - world-wide. In the beginning it was the demand for single family homes on a plot with a white picket fence, then coonskin hats, then school infrastructure, then VWs and college infrastructure, then..... The bolus continues to move. Boomers are rapidly downsizing across the globe and are dispersing their personal property amongst their heirs and/or are dumping what remains en masse at auction. Furthermore, uncertainty in the marketplace is manifested by dealers consuming their existing stock, commonly at diminished margins or at a loss, rather than refreshing inventories at auctions. Older dealers who remain optimistic in spite of the obvious demographics either cannot adapt or are in denial or are delusional or suffer from a combination of all of the above. Thus their retail art and antiques shops are depleted and often look haggard, a combination which tends to perpetuate demise. Hence collectors have been and are buying at auction because product availability is often far better and less expensive at auction than in retail shops. The overall effect on the market is descending retail and wholesale prices across the board. Older collectors who remain optimistic in spite of the obvious and continue to hoard will erode the net asset value of their estate. Antiques show promoters and dealers who ignore or are oblivious of the trend with crash and burn or wither away. The show business is dead and getting deader. Dealers are old and getting older. In short order they are going the way of the dinosaur. New collectors are younger and have matured in the digital age. They will present themselves and their collections online, not so much the old-fashioned way. In general, demand will not return to pre-2009 levels for at least 20 years, in my opinion. The reasoning is elementary: demand is weak and diminishing as supply is plentiful and increasing in a threatened world economy with clueless or hopeless younger generations. Sage advice for Boomers: dispose now rather than hope for another bubble recovery. And for you younger generations: buy! buy! buy! Dollar cost average only the crème de la crème. By the time the 30-somethings are 80 and their children are 60, what they bought cheap (now) will be expensive once again (in the 2070s). This is not just a trend, this is The New Order. As always, there are exceptions to the New Rule: fine art by listed artists, the noble metals, mid-20th century moderne, etc. For various reasons too complex to explain on this page, each category has added strength even in these times. Seek advice before adding to one’s collection. In the event of a loss the subject properties would necessarily have to be replaced by scouring auction venues if comparable replacements cannot be found in retail galleries, thus auction results are often retail. The subject properties should be re-evaluated by an accredited professional appraiser of personal property about every five years. If the insurer or the client notices a significant fluctuation in values, prompt consultation with an accredited appraiser of personal property is recommended. The client’s relevant market is global and his market level for these properties is upscale retail venues or auction venues of the better sort. mgrove
Posted on: Tue, 02 Dec 2014 22:06:02 +0000
Trending Topics
Recently Viewed Topics
© 2015