Auction Trends Updated: Reality
- by Bruce E. McKinney
Declining prices have begun to stabilize
A week ago we updated the auction trend charts. They tell an interesting story:
December is almost always a positive month for book auctions. The best material often comes out in the fourth quarter and it’s bound to achieve high prices even if the outcomes are less than some consignors hope. The median price increased $20 from the October low of $342 but was still well below the $378 median a year earlier. As the 12 Month Moving Average of Median Auction Prices chart shows auction realizations are still caught in the downward trend that dates from February 2008.
The change in Year to Year Change in 12 Month Moving Average however also suggests that the downward trend is leveling out as the difference in year to year comparisons by month is moving back to zero. Before the chart can go positive it has to first escape negative year-to-year comparisons. This aspect looks better although these year-to-year comparisons are getting easier because last year was a weak year. This year’s comparison is still negative but approaching “net no change.”
The sell-through rate remains mired at 68%, an unhealthy level that’s about 7% below the average of the past ten years. This suggests that reserves and buyer willingness to bid are probably about 10% apart. Said another way the minimum prices buyers are willing to pay are, on average, about 10% below current low estimates. Consignors would do well to listen carefully to their auction houses if they suggest lower reserves. Sending something into the rooms means the consignor wants to sell. Not selling in 2011 and trying again next year doesn’t appear, based on the trends, to be a moneymaking strategy. Too much material is in the wings. The selling venues are going to get crowded.