American Federal Period Furniture -
A Current Market Report

Historical Perspective.

Before we look at the current market, it might make sense to get an overview of the trends of the past few decades to give a historical perspective. The Federal period furniture market (both price levels and volume of sales) is determined primarily by the overall macro-economy of the country. We would all agree that it is certainly difficult to sell furniture during a recession, no matter how good a salesman one is, and, conversely, it is relatively easy to do so in a booming economy.

The 1980's began slowly with recessions in 1980-1982 but the economy started to turn around by the middle of the decade and came roaring back the second half. The Federal furniture market followed in lock step. New price highs were established at auction for American furniture of all periods and the first million dollar price for a single piece of furniture was achieved.

The 1990's also began with a recession in 1990-1991 as the furniture market grinded to a halt. But once again it turned around by mid-decade and came charging back the second half. New price highs were achieved and volume was greatly elevated.

Unfortunately we all remember the beginning of the next decade, a terrorist attack on 9/11 followed by a recession in 2001. But for a third time both the economy and the antique furniture market were turning upward within a few years and by 2004 through most of 2007 sales and prices were strong and getting stronger. 2006 turned out to be the best year ever in the 40 year history of Artemis Gallery. Federal furniture businesses were all poised to set new records and we saw no reason to doubt that the trends of the previous two decades would be repeated. But of course we found out soon enough that this was not to be.

For along came the disastrous Great Recession of 2007-2009. A dark shadow fell over the business as people became preoccupied with more important things than buying antiques, like keeping their jobs and not losing their homes. We are told by economists that the recession ended in 2009 but the recovery has been so incredibly weak by historic standards that many of us feel as if we are still in it. Certainly those of us who are in the antique furniture business by and large feel that there has neither been a recovery nor even a significant turn-around yet.

The Present Market.

In addition to the poor economy depressing the antique furniture market, there are various demographic factors at work. Let us take a look at some of these.

I used to feel that antique furniture sales correlated closely with overall retail sales in the general economy but now I believe they correlate better with the strength of the housing market. It is easy to imagine a couple moving into a new home wanting to get some new furniture to start fresh. And if they happen to like antiques then they may well go shopping for some at a convenient antique show or dealer’s shop and, if none are nearby, then on-line.

Housing markets tend to be local but I think we are safe in generalizing that they are still significantly depressed from the mid-2000’s peak. Not only are there fewer people moving into new homes but housing prices have substantially decreased. This brings up the so-called “wealth effect”. When you feel your wealth decrease, and for most people the bulk of their wealth is in their homes, you become much more reluctant to treat yourself to some goodie like an antique even if you can afford it. It is a difficult psychological barrier to overcome.

How about the younger generation, are they becoming buyers of antique furniture? First of all, total outstanding student debt just recently topped the trillion dollar mark. Students are graduating from college with ever increasing debt and, because of high unemployment, many are being forced to move back in with their parents. Among those who do find a job, however, getting married, buying a house and raising a family are being postponed to later and later ages. This is hardly a promising source of antique furniture buyers.

In analyzing the Federal furniture market we must also consider the current styles that are in and out of fashion. At the present time the fashion in home decorating seems to be strictly on the basis of what visual impact a piece of furniture has with little or no regard as to how old it is or where it was made. Is it dazzling in color or form? Does it have spectacular veneers? Does it light up a room? Will it impress my friends when they visit? These are the questions that concern people and not is it 200 years old, was it made by Duncan Phyfe, etc. People are decorating, they are not collecting. They do not want dark wood ponderous pieces of furniture but will be drawn to Federal pieces if they have brilliant tiger maple, flame birch or satinwood veneers.

So with these demographic factors playing against a depressed economy, where does the Federal furniture market presently stand? Prices have tumbled and sales have significantly decreased since the peak years 2006-first half 2007. Prices have decreased on a sliding scale roughly from 25% to 75% depending upon the quality level of the piece; the higher the quality level the smaller the decrease. Let me make an important point here. When I say quality level I do not mean price. I mean, of its type, is it the best or worst example or where does it rank in between? For example, if I have an inlaid candlestand that is among the best I have ever seen I would not have expected its price to have decreased much. If it was $12,500 then maybe it would be $10,000 now. But if I had a midlevel one at $3500 then it might be $1500 now. A 20% decrease vs. a 57% decrease. And the price of a fairly nice Hepplewhite inlaid sideboard might have fallen from $25,000 to $15,000, a 40% drop. Notice that the sideboard experienced twice the decrease as the best candlestand although its price is still 50% higher.

This demonstrates once again that the advice to buy the best is still good advice. Even if you have to forgo making a purchase of a lesser piece in order to save up, it still makes sense. But be cautious because even the top pieces have suffered some price depreciation.

An important consequence of fallen prices is decreased availability of supply. When prices are low people hold back offering their pieces, waiting instead for the inevitable rebound. This is particularly true of the better quality pieces where the risk of selling at auction may be the greatest. Unfortunately there are those who must sell into this poor market either for personal or business reasons and they will invariably be very disappointed. I have lost track of how many times I have counseled people not to sell pieces of furniture right now if they can possibly wait. But what if the necessary waiting period extends to years? What if selling at auction now results in getting 25-50% of cost back? Is that better than waiting an unpredictable number of years and getting back 75%? It can be a difficult choice. So as time goes by the availability of the best stock continues to spiral downward along with the prices achieved by the remaining pieces.

The Future Market.

It is usually true that when things seem bleakest and everyone talks doom and gloom we have reached a market bottom. I'm starting to sense that we have. I've seen some indications that very market savvy people are beginning to buy again because the low prices have become too hard to resist. Now mind you, their buying is very focused. They are looking only at the best quality pieces with the most eye appeal. A rarity made by a top quality cabinetmaker but with midlevel eye appeal is not what they want. They want it all including eye appeal. They want their friends to be impressed with their antiques when they visit. They want their antiques to make a statement. They are not necessarily looking to build a collection but are more inclined to buy one special piece to highlight in a room. Think best example of its type.

The housing market, which is so key to the success of the antique furniture market, appears to be headed for small but steady gains over the next decade. In addition, the huge gains in the stock market over the past two years should combine with this to give a boost to the "wealth effect" and encourage antiques buying.

Over the past six years a huge amount of pent up demand has been built up among the true collectors, those who have spent a lot of time and effort to learn the fine points of antique furniture. Unfortunately many of them have been hurt badly by the Great Recession. They come to the antique shows and look at the offerings but know that they can't make a purchase. You can sense the frustration that they feel. As the economy improves, hopefully more and more of them become able once again to make purchases.

And don't forget about the "baby boomers". They are now in their 50's and 60's. A good number of them have been successful in business. The kids have grown up and left their home and now they can indulge themselves. Some may find that they like antiques and become collectors.

And most importantly styles can actually change in our favor. As an example, several years ago a friend mentioned that when people build homes today they do not include formal dining rooms any longer. They build instead open kitchens with a counter that separates it from a large open living area. Dinners are served buffet style and people sit anywhere there is a chair or sofa. No wonder I wasn't selling dining tables, sets of chairs and sideboards like I used to. Well lo and behold there was an article in the NY Times Sunday Real Estate section a few weeks ago about how people are getting disgusted looking at counters and sinks piled up with dirty dishes and pots and pans while they entertained and how they were putting up walls to make dining rooms again!

Everything runs in cycles and antique furniture will have its day once again, we just don't know how long a wait there will be. In the meantime more savvy investors and dealers and knowledgeable collectors will reenter the furniture market and start picking out the plums at very friendly prices. But don't wait too long because if the economy or the housing market picks up steam prices might just take a strong jump and leave you in the dust. I know that I will be hearing from people 3 or 5 or 10 years from now complaining how they missed the greatest Federal furniture buying opportunity in their lifetime.

As a side note, another casualty of the poor market has been the loss of many dealers who no longer find that they can earn a livelihood in the antiques business. So with insufficient supply of better quality antique furniture and fewer dealers to work with, what should a beginning collector or decorator do? (Or someone who just doesn't have the time to put in to become an expert in vetting Federal furniture?) Here is a hint; every good collection that I know of was built by someone with the help of one or more good dealers. Who else would know the ins and outs of a complex antiques marketplace; know what is available and what provides the best value? I suggest checking out the website of the Antique Dealers Association of America (www.adadealers.com). This is a group of over a hundred of the most dedicated, professional, knowledgeable and ethical Americana antique dealers in the country that is celebrating its 30th year of operation. These dealers would welcome the opportunity to assist you in your collecting. (full disclosure: I'm a proud member and on the Board of Directors). One of my fellow dealers in 18th century American furniture assured me that my views about Federal furniture are equally true of all period American furniture and decorative accessories to boot.

I am eager to hear your views on this important subject. Please feel free to email them to me ().