As to why ILAB would take this position there are three possible reasons –
[1] They recognize the market has declined and wish to avoid disputes with future collectors who buy from ILAB members believing their purchases are investments and later find out they were not.
[2] Historically dealers have bought back material that was sold by the trade. In suggesting that books, apparently irrespective of value, are baubles rather than gems, they set the stage for declining to buy back material at anything but a steep discount.
[3] Or Mr. Gerits may view the current economic environment as one that requires a restatement of the financial prospects for future collectors because circumstances may be radically different. For decades it has been possible to buy, own and resell ten to 25 years later and achieve a positive financial outcome. Mr. Gerits seems to be suggesting collectors ought not have this expectation.
To test this I used the Americana Exchange Database of 3.2 million records to create charts showing year-by year-changes in median values, adjusted for inflation, from 1914 to the present, to see if the financial underpinnings of collecting are changing. Click on the image on this page,
In looking at these charts I can see why the president of ILAB would not call rare books an investment. We are currently in the deepest decline in collectible book prices in a hundred years. Close up, looking at online listings and material posted at auction it doesn’t feel so bad but from a distance it doesn’t look good. Prices have gone up and down over the decades but books have usually maintained parity with other things. During the depression, the second worst downturn for books in the past one hundred years, prices were down for almost all forms of assets and books suffered correspondingly and in time recovered correspondingly. Recently, in what we now see is a far worse downturn in book valuation, books are uniquely suffering. They are dropping relative to other things, the drop is substantial and the prospect unlikely for this trend to reverse anytime soon. We know this because auction realizations are coming down, not because dealers are necessarily lowering prices. If dealer prices do not adjust Mr. Gerits’ admonition is well taken.
