Wednesday, September 23, 2009

Antique Maps and Rare Maps as Investments

One of the more common questions our clients ask us is, will my rare antique map increase in value? When I am asked this questions, I generally answer “Yes, but it is a long term position”. A more comprehensive answer requires a deeper understanding of the rare map trade in specific and the vicissitudes of the antique trade in general. While it is easy to chart auction results or dealer catalogue values for specific map, such an analytical approach ignores a number of important factors, such as condition, restoration factors, colorization factors, etc. It also fails to take into account various factors ranging from the economy to vogue periods for certain items.

Antique dealers in general are in the unique field of art speculation. The job of a dealer is to find and identify an item that can be acquired at a reasonable price, kept for a period of time, and then resold at a significantly higher price. In doing so the dealer looks for pieces that may be undervalued by analyzing buying trends, his or her particular clientele, availability of similar pieces on the market, the overall trading activity at any given time, the historical importance of the item, and finally, perhaps most importantly, makes an aesthetic judgment.

Like many business, the rare and antique map trade has a fashion all its own. Certain maps and regions come into vogue and out of vogue frequently. In the 70s and 80s maps of Texas became extremely desirable pushing prices for this material well beyond similar maps of similar areas. Today Texas maps are still extremely desirable, but the bubble has burst and the rampant price increases of the 80s are no more. In fact, some Texas maps may have slightly decreased in value since the height of their desirability.

Today maps of Chinese and Indian cities are experiencing a similar price bubble as affluent collectors in Beijing, Shanghai, Bombay and Delhi enter the global marketplace. The price tenacity of maps of these areas remains very much in question. Though highly desirable now, one can only speculate on how global economic factors and general interest trends will affect this market. Like a savvy stock market investor, an antique map investor would have been wise observe the rapidly growing Asian economies and recognize an opportunity. Such an investor would have been able to snatch up these maps ten years ago when they were both common and easy to acquire and sell them today at a high profit. One might see a similar opportunity today with regard to maps of Russia, which are just beginning to see dramatic rise in interest.

Many antique map dealers who specialize in particular parts of the world command much higher than average prices for their target maps. Dealers based in places like Hawaii or New York City, must work constantly to keep their important local stock fresh for both ardent resident collectors and the tourist market. Such dealers, faced with limited availability, will often have no choice but to acquire their material at premium prices and resell at even higher prices. Despite their higher price point, such dealers are often the only active purveyors of their special maps and may well be the only resource for the desirous collector. From an investment perspective, there is still plenty of room for high profits, especially with regard to the rarest of these maps. In some cases, a collector may even sell their maps back to the dealer who originally sold it to them at a big profit! However, to be fair, this probably entails holding a map for several years.

There are also price spikes in the rare and antique map market. A few years ago I was bidding on an Ortelius map of Iceland at a New York City auction house. This wonderful map is a classic example of 16th century map making and features numerous bizarre sea monsters. Nonetheless, though interesting to look at, this map had not historically sold for exceptionally high prices because Iceland was simply not a hot area for collectors. The auction estimate was 2000-2500 USD, I was prepared to go to 2500 USD. The map ultimately sold for 10000 USD. Within a few days dealers, knowing that this map would be difficult to replace at former prices, updated their pricing on this map from 4,000-6,000 USD to 11,000 to 13,000 USD. Today prices have diminished from this high point and this map is now acquirable at 5000 to 9000 USD in some galleries.

Generally speaking, maps that are less common are better investments. Many maps are very popular because of their historic or aesthetic value and maintain consistent high prices despite being commonly (obviously this is a relative term) available. Such maps do increase in value over time, but the number of such pieces on the market keeps the price increase slow and steady. Such maps are unlikely to spike in value or increase dramatically over the short term. Unique or one of a kind maps, however, can command a premium and will almost inevitably increase in value dramatically over relatively short period of time. Many dealers, on acquiring such maps are at a loss with regard to how to price them. Without a sale history, the dealer must rely on his or her own experience, personal aesthetic and a historic evaluation of the map to determine its value. Even so, a investment collector can often safely acquire such a piece with the expectation a substantial increase in value over time.

And then, of course, there is the economy. More and more, investors disillusioned by wall street, are turning to the art market as a stable shelter to the disorientingly erratic stock circus. While economic issues may reduce the overall quantity of maps sold and dramatically affect auction values, most dealers and collectors purchase their inventory with the understanding that they may have to hold their stock for several years before selling. What this means for the buyer, is that the economy does not significantly affect rare and antique map values at the gallery level. However, it does significantly impact auction values. The current recession has been hard on many auction houses whose profits come from a fast turnaround of a quantity of items rather than timely appreciation. This also creates an opportunity for the savvy investor to snatch up rare finds at excellent prices.

Even so, it tends to be only the most ardent and dedicated collector who can win in an auction room. Many collectors are drawn to auction rooms by the possibility of acquiring valuable maps at a fraction of the retail price. This is, alas, also where many collectors make their biggest purchase mistakes. Succeeding in an auction room takes either luck or incredible knowledge of all aspects of the antique business. Many antique dealers, ourselves included, act as auction advisers and often bid for their clients – in this way map collectors are saved from making dramatic mistakes and overpaying on items that are misrepresented, overpriced, or unlike to accrue in value. Even with the fees assessed for this service by various dealers, it tends to be a very good value in the long term.

In conclusion, the answer to the question, “Will my map increase in value?” is “Yes, it will.” Generally speaking, map investors should plan on holding their purchases for about ten years to guarantee a significant increase in value. Those interested in maps as investments should also seriously consider developing a relationship with a good dealer who can help them direct their collecting interests and avoid the many pitfalls to successful investment in rare antique maps.

by Kevin James Brown