The antique market has undergone massive changes recently. These developments have altered the antiques marketplace in one important way that few experts, much less casual observers, are aware of. While high end, investment grade antiques have soared in value over the last 10 to 15 years, non-investment grade antiques - what I refer to as collectibles - have crashed.
This pricing revolution became starkly apparent to me as I was doing in-depth pricing research for guides I was writing. I saw the same pattern again and again. Investment grade antiques - high end coins, jewelry, silverware, mechanical watches, illuminated manuscripts, etc. - generally cost two to three times what they did a decade ago. Sometimes they cost four times as much. Very rarely, the increase was a bit less than two times. These price increases were across the board, but only for antiques that fell into the investment grade category. In other words, only those antiques that are portable, high quality, durable, scarce and reflect the zeitgeist of their era benefited.
The situation hasn't gone nearly as well for the rest of the antiques market, however. The price of more pedestrian collectibles - most memorabilia, ceramic figurines, antique furniture, glass, china and crystal - has plummeted since the turn of the millennium. Markets that used to be vibrant for these antiques have collapsed in value by anywhere from 25% to 80%. And the trend doesn't seem to be changing anytime soon. The demand collectibles formerly enjoyed is simply no longer there.
As interesting as this bifurcation in the antiques market is, I find the reasons why the split has occurred even more intriguing. If we can understand why it is happening, we have a chance to reasonably predict future demand and relative price movements. There are several interconnected reasons why the collectibles market has weakened while the investment grade antiques market has simultaneously appreciated.
The aging of the acquisition-oriented Baby Boomers is first and foremost on the list of trends that has tanked the collectibles market. Around the year 2000 the Baby Boomers were in their late 30s to mid 50s. This was their prime collecting age, when they stuffed their newly built McMansions full of every conceivable antique and collectible. But now that the Baby Boomers are aging into their 60s and 70s they have slowly changed from net buyers of collectibles to net sellers.
The Great Financial Crisis of 2008-2009 also brought profound, irreversible changes to the antiques market. Before the crisis, many people spent a significant portion of their discretionary income on collectibles. After the crisis this extra income - and by extension a great deal of collectible demand - has evaporated.
The trend towards young people living in condos, apartments, townhouses or other, smaller homes has meant there is less room for knick-knacks and shelf sitters among the younger demographic. It has also resulted in younger generations highly valuing portability. Many of today's Millennials live semi-nomadic lifestyles, changing apartments often and even moving across the country for job opportunities. Because of this, antiques that are durable, small and easily transported have a tremendous edge over ponderous, fragile furniture, china and other unwieldy collectibles that grandma may have favored.
Another important factor in the escalating prices of investment grade antiques is the price of bullion. Gold, silver and platinum have all increased sharply in value since the early 2000s. Any antiques containing significant amounts of precious metals have, consequently, seen their value rise, as well. This trend applies to other fine raw materials, too. For example, fine gemstones and exotic woods have also increased in price over the last couple decades, indirectly driving up prices for antiques that incorporate them.
Finally, many younger people, having grown up in the Age of Wal-Mart, have developed an aversion to mass produced junk. Instead they recognize and strive to own fewer, but higher quality items. Investment grade antiques, with their old world workmanship, individuality and scarcity, effortlessly fit these requirements.
None of these trends are likely to end anytime soon. Therefore, I think we can expect more of the same. High quality, investment grade antiques will continue their brisk appreciation while more common collectibles will remain stagnant at best.
