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.
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.