How Has The Recession Affected The Market For Collectibles?

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Given that collectibles are, by definition, luxury goods, it is not surprising that the market has nosedived since the recession kicked in. Tough economic conditions and rising unemployment have led to an increase in the supply of collectibles, with many collectors being forced to sell off some of their prized collections in order to make ends meet. By the same token, collectors have had less money to spend on building up their collections, and the net result of this has been to drive down the prices of most collectibles.

For example, in the US market for baseball collectibles, prices of rare baseball cards have fallen through the floor, with cards that were worth hundreds of dollars a few years ago retailing for tens of dollars – and they are still moving slowly. The popularity of online auction site eBay has also had a downwards influence on prices, which has made things increasingly difficult for dealers. During a recession, hardcore collectors rarely stop collecting, but they will slow down, and buy less expensive items. For more information on this topic, take a look at this article from the Missourian newspaper blog.

However, at the top end of the market, ultra-rare collectibles are still fetching record prices. This is because the market for these types of items has always consisted of high-net-worth individuals who have less to fear from the recession than the majority of working people. It is likely that this trend will continue for the foreseeable future, and some dealers have repositioned themselves in order to cater for this low-volume, high-value end of the market. This increases the risk for dealers, starved of the cashflow produced by a steady stream of low-value collectibles sales, but for those dealers who have stayed in the business, this remains an area where great profits can be made if they are sufficiently well-connected.

On the other hand, for those who have the disposable income to spend on collectibles, there has never been a better time to buy, as prices will surely begin to rise as the economy recovers.



Photo Credits: Mike French of Dugout Sports Cards in Columbia; by Irene Rojas of the Missourian.

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Deanna is the founder of Inherited Values, among other sites. She is also an antique dealer.