Appraising in a Time of Turbulence

by William Warmus

This brief essay appeared in the Art Alliance for Contemporary Glass Newsletter, Spring 2009. The turbulence referred to in the title was the Great recession of 2008, and this was about its effects on the art market.

“As for collectors, I have yet to see evidence that they are fully aware of the increasingly precarious nature of the market.”

When I teach my seminar on appraisal practices at the Rhode Island School of Design, we inevitably discuss USPAP 7-3-c. Most appraisers follow the Uniform Standards of Professional Appraisal Practice (USPAP) written by the Appraisal Foundation, and 7-3-c establishes the seemingly straightforward requirement that appraisers “analyze the relevant economic conditions at the time of the valuation, including market acceptability of the property and supply, demand, scarcity, or rarity” of, in our case, the artwork being appraised.

The period from September 2008 to March 2009 has been a tremendously difficult period for compliance with USPAP 7-3-c. What is the relevant economic condition of the studio glass market? I’ll try to answer that question, not by making a USPAP qualified statement, but by providing a thumbnail sketch of where I think the market is now.

Even in the best of times, our market is quite small. I call it a boutique market. When you appraise work, you seek to cite a few comparable recent sales that will argue the case for the Fair Market Value you have listed in your appraisal report. I try to find at least three, and sometimes that can be difficult. There simply may not be three comparable sales of a given artist’s work in one year or even two, or sales may be difficult to ferret out because I can’t find the correct dealer who has been selling the work, or a dealer doesn’t want to answer my queries. So with that caveat in mind, my first comment about the studio glass market in 2009 is that we haven’t had enough sales activity to confidently identify a downward trend.

Nevertheless, discussions with dealers, artists, and collectors seem to indicate that sales are down substantially, perhaps by 50 percent or more. But prices are holding at their pre-September 2008 levels. Discounting seems to be about the same as has become customary. Of course, all this is inter-related: because dealers and artists are still holding firm on prices, sales have dropped as collector wealth shrinks. It also seems that dealers are scaling back in order to weather the storm, with the hope of surviving until the economic turbulence abates. I have heard that a few prominent dealers are cancelling planned attendance at art expos. Some dealers are showing a preponderance of work in the under $10,000 range as a more marketable price point, while others are seeking rare and “iconic” works by prominent artists in the over $50,000 range, this type of work thought to be more resistant to devaluation.

As for collectors, I have yet to see evidence that they are fully aware of the increasingly precarious nature of the market. I’m sure that many collectors have seen their wealth decrease seriously. I only hope that the collectors who have discretionary funds will step in and help to support the market, and make my role as an appraiser easier by stabilizing the market.

William Warmus has been appraising glass since 1976. The author of a dozen books, he was a curator at the Corning Museum of Glass and currently serves as a member of the Collections Committee at the Museum of Glass (Tacoma), as well as a board member of the Art Alliance for Contemporary Glass. In 2005 he received the AACG award for outstanding accomplishment in the field of contemporary glass.