The Journey of Antiquing–7

Will the Antiques Biz Recover with the Real Estate Market? Maybe Not.

A savvy observer assures me that when the real estate market recovers the antiques business will follow. That sentence was a pull quote I spotted while glancing at the magazine of a fellow passenger in flight. It was from Elizabeth Pochada’s Editors letter in the Summer, 2010 issue of The Magazine Antiques.

We’d all like to think the antique business will recover with the real estate market, but I wouldn’t be too sure. The antique business wasn’t that good before the bubble started to burst a few years back. In part that was because the bubble was caused by folks buying more home than they could afford, plus speculators buying several homes. Neither of those situations call for much in the way of antique purchases.

There are other reasons why the antique business may not recover with the market.

Houses are getting smaller. Data from the National Association of Home Builders found the average size of a new home that was completed in 2009 fell to 2,480 square feet from 2,520 square feet in 2008. That’s not a big difference but there are likely more even smaller houses on the less expensive end. The trend is likely to continue. This means there just isn’t as much room for furniture as there once was.

Baby boomers are downsizing, sometimes dramatically. One article in the Christian Science Monitor mentions a retired couple moving from a 4,000 square foot suburban house to a 400 square foot apartment. Several articles reference the large number of baby boomers moving to downtown areas, into condos and apartments. This has two consequences. First if they had collections of antiques, many of them are hitting the market place simultaneously, making things worse, not better. Second, there is less space to put new purchases.

If you’ve moved, you know it seems at times easier to replace everything than move it. That’s not so easy with antiques, but a more mobile population will be less likely to begin a collection. Mobility has decreased somewhat in recent years, but I suspect its still playing a role in terms of people in their 30s and 40s being willing to make expensive purchases. People who move often know the cost of moving can diminish the value of an antique sideboard.

Finally, in shear numbers Generation X, who could be likely purchasers of antiques, is smaller than the Baby Boomer generation. We may have to wait until Generation Y has purchasing power, and with any luck an appreciation for antiquities, until things pick up.

So what can those in the antique industry do? To address not having as much space as we used to, I think it would be important to emphasize that each piece could be of higher value. If there are fewer square feet, why not fill it with the best? To those afraid to have to move, I’d say first you lose money when you buy new, especially if you buy new each time you move. With antiques, the higher value can be a supportive reason to move them since they can’t as easily be replaced. Finally, you’ll keep a good piece of antique furniture for a long time. If you add in the long-term cost of buying, moving and replacing production furniture, chances are you’ll come out ahead with an antique.

What not to do? One thing that turns me off is when a dealer says “antiques can be great investments.” Yes they can, but just as often they are not. Today’s consumers are savvy. They won’t be fooled into thinking they can beat the stock market with a Regency sofa. The survey’s I’ve seen say beyond personal taste, those who go for antique furniture do so because they know they’ll be able to get some or most of the money back, not because they hope to produce great profits.

Note:

The Journal of Antiquing is an editorial series regarding the trends, practices and other general topics of antique business. Read the rest of them through this link.

About Eric Miller

Eric Miller is co-founder and contributor to Urban Art & Antiques. His website is ericmiller.me

8 comments

It’s fair to say that the antiques market is definitely struggling from numerous forces at act here. The housing market is definitely one of them – though there are enough consumers out there who still need things to furnish their spaces with.

I agree with your comments about the value of antiques over newly made goods. I still have things which I purchased twenty years ago and still love them. And yes, they were purchased purely out of love and an appreciation for value – not investment potential. Was I thinking like an investor way back then? No, I was thinking like a consumer who appreciated nice things which held their value.

From my perspective, perhaps it’s time for mid-range dealers in particular to start looking at higher-end catalog home decor companies such as Restoration Hardware and the like – and start to present their inventory as design solutions/genuinely nice things to the CONSUMER, particularly the 30-40 something one.

Pricing is important – though quality is a factor which will help prevail over the ‘more convenient’ catalog and on-line options. The concept of ‘collector’ is likely to be hampered for a bit on the retail level, so it’s good to use this time to ‘introduce’ and ‘create’ new enthusiasm for the material. As always, education is key. You can compete with mass-produced if you focus on the differences and the benefits!

As you know, most of the material produced by catalog companies is made of particle board with laminate and the furniture is in effect virtually worthless once it leaves the warehouse. I’ve spoken with moving companies in NYC that prefer not to handle it since it doesn’t travel well at all. Priced very similarly to lower-mid range and mid-range antiques, it is frustrating to dealers that the niche which exists for their material has not been reached yet.

How to move in this direction? Perhaps start by changing one’s approach – both on-line in your print presence and physical space. Modernize one’s website, ads, take a look at your inventory and re-focus your presentation to reflect what consumers actually desire these days..merchandise like the best of them. It’s not a matter of changing your inventory entirely – it’s about highlighting the things that are of interest or even better creating the desire for them. Visit well-merchandised retailers for ideas and inspiration. Read interior designer blogs. Make your space one which screams ‘come visit’.

Focus on attracting new, and winning back those who may have jumped to other options – whether its auction houses or catalog companies. Find the need that they are NOT filling and focus on it. Become the specialty, bespoke-quality store we all drool over.

Have a strong on-line presence, start a young collector meet-up if your city is large enough, host fund-raising events at your space. Promote antiques as green! Change window displays frequently and really focus on making them clean, eye-catching and in touch with what attracts these days. Unique is the key word here.

Consider adding some contemporary art or ethnic material to your window displays along with antiques. Meld multiple interests since contemporary/unique does still garner a lot of attention. Re-arrange your space very frequently so that people want to visit you just as frequently. A great space does much to overcome on-line shopping entrenchment.

And yes, people are downsizing, but it does not mean that antiques are not the strongest option out there for people (even the 30-somethings) to purchase – we just need to start getting creative and think differently.

And yes, the over-inflated housing market will likely take a while to recover – I’ve read as long as five years, which is discouraging. It seems a good time to get creative and walk the walk since shrinking is never a viable option.

Sorry for the long comment, Eric. 🙂

Wow, great post, very informative. Great comment Eric, I don’t think you need to apologize about the length, especially when many pay for such concise, pertinent information. Your comment and advice was very well said. But easier said than done, I’d say. 🙂
Au Revoir,
Danette

Oops, I apparently was confusing in my last sentence. This was not Eric’s response, but my own. Thanks for your comment and compliment.

As with all change, the difficulty is overcoming outdated ways of doing business as well as apathy. No one website, no one show, or no one blog is going to do it – this is a group exercise 😉

As with all change, overcoming apathy is the first step – but it is safe to say that it will take a concerted group effort to work.

It’s my tendency to overlook immediate economic factors in favor of demographic trends. In a recent exchange with Bob James, who recently exited the antique show business, he also mentioned generation x not liking antiques. On that front the industry really needs to put some research into uncovering just what generations x and y think about antiques.

The immediate economic outlook will change and it has more to do with the outlook for particular auctions and shows. Long-term however there’s more trouble on that front as well. The American middle class simply doesn’t have the purchasing power it once did. The high end may be where sales will be concentrated for a long time to come. With some saying the employment outlook may not improve much in the next decade, there seems to be gloom in the economic, as well as demographic short-term.

Based on my own experiences, the two younger groups like them – they are just under extreme financial pressures, see antiques are being cost-prohibitive and do not have the buying power that the now 40-somethings had in their 20’s. Because of this, the trade would need to highlight the ‘buy less, but buy better’ guidelines we have always fostered in collectors. We are clearly living with less ‘stuff’ – that which we do have should be great, hold its value and offer something if one chooses to sell it down the road. Accumulation in a hap-hazard way was never the way to collect to begin with… it’s just become more apparent now.

For this reason, the younger consumer would benefit from some exposure to antiques versus poorly or newly made throw-away goods. Collecting, as well as home decorating, has always included making longer-term choices. We need to return to these truths.

“For this reason, the younger consumer would benefit from some exposure to antiques versus poorly or newly made throw-away goods. Collecting, as well as home decorating, has always included making longer-term choices. We need to return to these truths.”

This is an absolutely crucial point!

Too many members of Gen X (I’m one) grew up in a “don’t touch” “don’t use it” atmosphere. If we wish the antiques sector to survive, let alone grow and thrive, we need to make a connection that antiques and vintage items are functional and useable. Financial pressures, smaller living spaces, all of these factors mean we can’t rely on the cachet of “antiques” in and of themselves. Unless you are a “collector” who has the money to purchase and space to store items you do not use.

The only sector of the market that I have any insight into is sterling silver. Too many people see silverware as high-maintenance and old-fashioned. Who has the time to polish anymore? – I’m asked that all the time.

The notion that sterling can go in the dishwasher (with some caveats) is an absolutely riveting one. On many occasions I have seen this information completely alter an individuals mindset. The silverware is no longer a source of guilt because it has not been used in 5 years since there is no time to polish it. Instead it can become a source of pleasure, as an item you can use frequently and enjoy.

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