Photo Credit: Tom Hilton
2020 has been an eventful year in the antiques market. Hell, 2020 has been an eventful year in just every other market too. As we all know, the coronavirus pandemic struck a major blow to the global economy. Of course, the real problem wasn't the artificially induced economic standstill - an unintended side effect from the lockdowns meant to control the spread of the virus. Instead, it was the fact that this act radically destabilized the "Everything Bubble" that had pervaded the global securities markets for nearly a decade.
We currently are in the midst of the knock-on effects from this historic (and ongoing) economic debacle.
To say the 2020 antiques market has been tumultuous is an understatement. We are seeing a plethora of cross-currents pulling the market in different directions simultaneously. The situation is, to put it mildly, confusing. But I'll try to untangle some of the 2020 antiques market trends that I've been seeing.
First up, I want to talk about the bullion market. This might seem a like an odd topic to bring up when talking about antiques, but precious metals are a major component in many fine vintage items (particularly those that are considered investment grade). So it is quite pertinent, in my opinion.
Well, the precious metals market experienced a massive shortage starting in March of 2020. Silver, gold and platinum coins and bars disappeared from both physical and online coin dealers, shooting premiums through the roof for any remaining inventory you could find. Even as I write this in July 2020, the bullion market has not yet fully recovered from its annus horribilis.
This feeds into our first 2020 antiques market trend: rising prices for old gold and silver coins - but only in the low-end of the market. This means that worn or common collector coins that sell primarily based on the value of their contained gold or silver have risen with the strong bullion market. But, paradoxically, better date or higher grade coins that typically sell for high premiums over their melt value have tended to stagnate or even decline slightly in price.
So for example, I purchased a pair of common date Morgan silver dollars in decent circulated condition for $43 from eBay in February 2020. Fast forward to today (July 2020) and the exact same eBay seller is listing very similar Morgan silver dollars for $57 a pair. That is a price increase of over 32% in just a few months! And people are willingly paying that new, higher price too.
But if you take a look at slabbed common date Morgans in MS-63, MS-64 and MS-65 conditions - classic collector coins - you will find that prices have barely budged from earlier this year. In other words, it costs more to get into the low-end of the coin market while better condition coins languish due to the economic apocalypse. It also means that a relatively small step up in price will often get you a dramatically better piece.
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Antique sterling silverware has also been plagued by similar tendencies to the coin market. Premiums on sets of sterling flatware have been trending downward for more than a decade now, but prices have ultimately been supported by the underlying scrap value of silver. Only desirable makers and patterns garnered continued interest and strong bids during this period of decline. But during the chaotic 2020 antiques market, premiums on sterling flatware and hollowware have more or less collapsed.
Whereas before sets of silver from renowned luxury makers such as Tiffany & Co. or Puiforcat were still able to reliably command high prices, now even these storied brands are feeling the undertow of our Greater Depression. Lately I've seen many eBay listings for sterling pieces by respected makers like Gorham, Birks and yes, even Tiffany, go for not much more than melt value. This is an undeniably monumental development. It is clear evidence that the progressive and ongoing impoverishment of the middle class is effectively crashing the 2020 antiques market.
Vintage watches are the next category of antiques I wanted to talk about. As you can probably guess, the trend here has been quite similar to what we've already seen with rare coins and sterling silverware. The low-end of the vintage watch market is still fairly robust, with over 10,000 watches changing hands on eBay in the $150 to $500 price bracket over the past few months. But volume drops off precipitously at higher prices, with less than 900 watches selling on eBay in the $2,000 to $10,000 price range over that same period of time.
Many fine antique wristwatches go begging for a bid in this environment. It is all too common to see stately, older Hamiltons, Lord Elgins and Bulovas sell for little more than the value of their gold cases. Even watches from hallowed European makers such as Omega, Longines and Universal Genève can struggle to surpass the $700 price point. Only the very strongest brands - the Rolexes, Patek Philippes and Vacheron Constantins - still command top dollar in today's vintage watch world.
Not every aspect of the 2020 antiques market is gloom and doom however.
There is anecdotal evidence that the antiques trade is finally completing the painful transition to online sales - a trend that many old-time dealers fiercely resisted for many years. It appears that Covid-19 simply accelerated the movement to online-only sales that was already evident for more than a decade beforehand. Of course, the downside to this sea change is that many small antique shops with physical storefronts will not reopen in the wake of the pandemic.
Online sales are ultimately a very good thing for the antiques industry. They allow a larger pool of sellers to connect with a motivated throng of buyers. And, honestly, the antiques market needs to make this transition or risk fading into permanent irrelevancy. Despite the short-term teething pains this might cause some people involved in the antiques business, it is still for the best in the long-term.
But the aspect of the 2020 antiques market that I find most intriguing is the increasing trend for Millennials and Generation Xers to buy antiques and vintage collectibles as investment vehicles. After all, if your savings account is going to yield zero interest pretty much forever, why not turn your wealth into physical objects? You'll have a much better chance of preserving your purchasing power with a carefully chosen portfolio of fine antiques than you will gambling in our insane casino stock market.
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The only downside I see is that many people new to the field of antiques are buying vintage 1980s and 1990s collectibles, rather than older antiques with an established track record. This is to be expected as middle aged people have a tendency to purchase items they fondly remember from their youth, thus driving up prices for those items. But this trend has a dark side too. 1980s and 1990s collectibles will predictably rise in price until their demographic tailwind is exhausted. At that point, everyone will try to sell, but to whom?
In the year 2040, no one will want your Alf memorabilia.
This is why I recommend that antique investors stick to classic, high-intrinsic value antiques such as rare coins, vintage wristwatches, antique jewelry and sterling silverware. These are categories that have stood the test of time, reliably appreciating over decades, if not centuries. And as an added bonus, these older, established antiques are currently selling for ridiculously low prices relative to stocks and bonds.
I say that if the 2020 antiques market insists on offering us such grand bargains, we would be foolish not to accept them. Invest accordingly.
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