Recession and low inflation have taken their toll on the collectible market, deflating the overblown prices of the 1980s. Which could make 1991 a good time, if you have the money and inclination, to seek out art, vintage cars or other collectibles that haven't been this low in price for quite some time.
Keep in mind that the value of any collectible is always subject to fluctuation based on economic and market circumstances. So, if you aren't careful to do your homework as you shop and instead enter with stars in your eyes, you can get badly burned.
"Contemporary and impressionist art, which ran up irrationally in price between 1987 and 1990, has had a major price adjustment and now the true collectors, rather than speculators, are back in the market," observed John Marion, chairman of Sotheby's North America in New York. "On the other hand, items that didn't experience such a dramatic rise have maintained good price levels, among them English and American furniture, American folk art and jewelry."
The time of incredibly huge price tags for art is over, according to Karen Tallackson, modern art specialist with the San Francisco-based Butterfield & Butterfield auction house.
"All art prices are down to more realistic levels, making it a definite buyer's market because this leveling off of prices has resulted in some undervalued pieces," said Tallackson.
After a strong run-up in the prices of collectible cars during the mid- to late 1980s, there was a dramatic drop in mid-1990. The most exotic examples, such as Ferrari, Jaguar and Aston-Martin, took price hits of 40 percent or more, but other less expensive examples also declined in value quickly.
"The market price for lower-end collectible cars that sell for less than $10,000 is totally stalled, making cars such as the later-model Mustang a great bargain at this time," said David Brownell, editor of Hemmings Motor News, based in Bennington, Va. "Since this lower end of the market is where new collectors should be looking, the prices are right."
It pays to buy a car in good shape. A full professional restoration of a battered, rusted car can cost many thousands of dollars and you're unlikely to recoup those costs if you sell later.
Before you leap into the art market, Marion of Sotheby's suggests that you get involved in the process by reading as much as you can about your area of interest, talk to experts and generally educate yourself.
"Don't depend on someone else to tell you what to buy and what it's worth, but know all that before you shop around," Marion counseled. "Also, don't approach art like your other investments, but instead choose what you enjoy the most and then, if you did your homework, expect financial rewards to follow."
If you're starting with $2,000 to $5,000, try to find artists on the rise whose works are likely to appreciate in value long-term. If you can't afford paintings, consider black-and-white sketches or other examples. Slowly build a thoughtful collection that you like.
Two emerging schools of art, which, according to Tallackson, feature relatively reasonable prices, are the San Francisco Bay area figuritic school (1950 to 1965), including artists such as Elmer Bischoff, Joan Brown and David Park; and Latin American art, featuring the work of Matta, Enrico Baj and David Alfaro.