Let's give you a hypothetical story although I am sure I can quickly think of thousands of stories that are almost identical to this one. 45 years ago when you first decided to decorate your home, you chose to fill it with these cute little figurines called Hummels. You found a very reliable retailer that was able to receive orders directly from the Hummel factory and based on a list that included all the prices, you could order them as you desired. Every shelf and nook in your home was filled with these little figurines, and you enjoyed them until yesterday when you decided it was finally time to move to a smaller abode and bring your mint condition Hummel collection still with the original boxes to market.  Hopefully, to be enjoyed for another 45 years as you had enjoyed them by another collector such as yourself.

You decided to ask a few dealers and Hummel specialists over to appraise your collection for market value purposes and to your shock and surprise the bill for the appraisal cost more than your entire collection. Forget what you paid, that it seems was a fore-gone-era.  Now some people will argue that 45-year-old items are not antiques, some will say that they aren't even vintage, however, for the purposes of this article, it will suffice.

Now, this isn't an only article about Hummel's, collectibles, and only lower end priced items. I could also go on about tulips, and I am confident you probably don't collect these either. I am talking about a global market that transacts billions of dollars every year. I am referring to the art and antique market.

I find these days on the internet, terms are becoming more nebulous than ever. Antique, vintage, modern, etc. Rarely anymore does antique alone mean an item is 100+ years old, regardless of what your dictionary your grandmother told you and rarely does vintage mean an item is a minimum of 50 years old.  So when people want to know why their antiques have dropped in value rarely does this solely refer to things that are only over 100 years old. Today we have an evolving concept of new and not new and not new can be described as a lot of different titles.

So back to our original question why have antiques dropped in value?

Often, I am asked about the general value of art and antiques in today's market?  Such as "how is the art and antique market doing? Alternatively, many people that own antiques have heard that the antique market is not doing well and are looking for a professional to reaffirm this idea or provide some insight.

I think as any market intelligence people look for one answer to their question. Yes, the market is good, or no the market is terrible. I think the first mistake anyone makes in attempting to understand an exchange is to consider that an entire market moves as a whole and entirely in one direction. The art market, the antique market, the vintage market, the classical Chinese painting market, the federal American furniture market, the post-war-contemporary art market.  In my mind, these titles all represent separate markets and may have a different pool of market participants altogether.  These categories may not be related at all with the exception that they are being sold in the same venue and depending on the scheduling, may have some cross over buyers as a matter of convenience or coincidence. Maybe the buyer that is buying antique paintings, also realized they also need a chair and so it begins.

These categories may not even move in one single market within their own category. Individual pieces of federal American furniture may sell better or worse than others, and that indeed happens. It is becoming an increasingly common theme that in some auction sales 5% of the lots are representing more than 50% of the entire sale proceeds. That means that in an auction that consists of 100 lots. 5 lots are selling for more money than half of the wholesale of 100 lots. Sometimes that number is even significantly perhaps 75-80%. You may see a press release after the sale that says the market is exploding with growth, but in fact, the market is separating and experiencing an explosive shift that is eliminating value in 95% of the items in that given sale.  Marketing is a heck of a thing if you know how to spin it. To me, that means that my consignment in that sale has a 95% chance of not selling well at all. Not the highest odds, if I was a gambler.

There is a saying in the stock market, buy low, sell high: The idea of the value of antiques rising or falling in value to me is only relative to the price point in which they are being referred to. Meaning the price that was initially paid and the value of the currency paid for those items at the time they were purchased. To me, the question of antiques losing value is really about how much it was initially paid for it.

The Hummel buyer that began our story lost because to start with they purchased their Hummel's when they were brand new and without a great deal of understanding of the retail market for new décor and collectibles. I am also aware in the case of our Hummel market study that during specific periods dealers were charging a good deal for used Hummel's, but again many buyers for these pieces were doing so without a good deal of understanding of the market. These days when someone wants to acquire Hummel's they generally conduct detailed market analysis and go to global exchanges were Hummel's openly trade. There you will find that are many sellers offering Hummel's and few bids and so the price points react accordingly. If this sounds ridiculous to you, what do you think e-commerce venues are? Bids, offers, they are exchanges. The global transparency of these markets has changed the parameters of the market. Before you had a dealer standing at a table in some rented out college hall that was selling Hummels in some type of antique and craft fair. If someone wanted to know the value of the dealer's inventory they might have had to refer to some book that was organized at the beginning of the year based on global sales and a general feeling talking to key specialized sellers of those particular assets. Yes, even Hummel's can be referred to as assets.  These days a buyer approaches that sellers table with real-time exchange data on their phone.  A buyer may generally have an idea of the global availability of that particular item and the going market price. Informed buyers are far less likely to overpay or at least enter into a transaction without being informed on market data. What that means is more buyers are less likely to feel their "antiques have lost value" because they entered the deal at a more informed price point.

Back during the Victorian era, Piano shawls were all the rage and extremely expensive with some costing thousands of dollars over a hundred plus years ago. Today depending on a variety of conditions a shawl could sell for 100 dollars.  Of course, some shawls are rare and sell for 10,000 dollars or more. However, if you calculate inflation and the fact that most shawls don't trade for anything close to $10,000 these days an observer could safely make the statement that the shawl market hasn't really kept up with the times. Had you purchased a shawl in 1890 for 10 cents on the other hand and attempted to sell it today, if you kept it in good condition, you would be able to sell for much more than you originally paid for it. This concept of a beginning price and ending price is relevant to one's understanding of value and how an item loses value or gains value. Everything increases in value or loses value relative to the initial starting point. At the same time, these Shawls like the Hummel's were new when they were purchased.  New purchase prices have no relation to not new purchase prices, but many buyers initially fail to make this distinction. This can make venues like Artzze a great place to purchase. 

The real issue underneath why antique have dropped in value is not about a rising market or a dropping market but about market fluctuations.

Let's say you inherited an item from a family member, they found this item on the street. Their investment in this item was $0 and by inheriting it, let's say your cost into this item is also zero. Now anything you sell it for is a profit. However, when you attempted to sell it last year, you were offered 10 dollars, and this year you were offered 5 dollars.  Why?

Some people will tell you about the changing popularity of items, and this may be true to some extent. People generally don't want the same type of antique furniture or decor they wanted 30 years ago, I don't entirely agree. Buyers may be more sophisticated than they were 30 years ago and there may be fewer people that want those items now, but the price to some extent can still be obtained within reason.

More and more values obtaining better, or lesser values are about the venue in which they are sold. Some venues are lousy for getting a better price, and some venues are tremendous like Artzze, but commonly a component of obtaining a better price is also about timing. It may take time to extract the value you are looking for.  Sometimes a seller's concept of value will never be realized. Someone asking a million dollars for a $200-dollar table will probably never find a buyer in their lifetime or any other lifetime.

The conclusion to why antiques lose or gain value is not really a statement but a ratio of component parts consisting of the following variables: Supply, demand, visibility, venue, marketing, and timing. Depending on your position you may have lost value the minute you purchased an item, or you may have gained value the moment you acquired the piece. On the other hand, prices fluctuate for a variety of reasons as well, but most of the reasons for these fluctuations include components of the above variables.