Latest News on the US Rare Coin Market

The good people over at Heritage Auction Galleries have released a video recording of two of their executives discussing the state of the rare coin market in the US at present, following their most recent series of auctions held in Florida recently. If you have an interest in keeping abreast with the situation both here an in the US, I'd certainly recommend that you watch it.

Heritage are easily the largest coin dealers in the world, and are 3rd in the world in terms of tangible asset auctioneers, only behind Sotheby's and I think Christie's. (I don't recall who the two biggest are but from memory it's Sotheby's and someone else - Heritage is certainly big anyways!)

I'll leave it up to the experts to recount exactly how they see the market, but for those of you that aren't interested in clicking through, the following are the most salient points that I believe were made:

  1. The clearance rate of 83% was achieved by "working with vendors" - the cynical types among you will have a mental picture of what that looks like! My impression of these two executives (and by association Heritage's overall corporate culture) is that they are aligned with maximizing the interests of all of their clients, buyers and vendors alike, in which case "working with vendors" looks very much like experienced numismatists explaining what the reality of the market is like in market phases such as this.
  2. The clearance rate was enhanced by extending credit to buyers that had not requested it previously. I understand that before this auction, Heritage also communicated with their vendors the benefits of allowing buyers to digest their purchases over a period of time. By effectively extending credit to buyers (over some reasonable periods of time I might add!), the clearance rate improved also.
  3. Decent coins are still making decent prices. "Problem" coins, those that are not in favour with collectors and those that lack eye appeal are quite soft, while decent coins are doing quite well.
  4. The clearance rate for other auctions has been as low as 20% - 30%!! It didn't surprise me to hear their comment that those auctions whose consignors were "6 - 12 months too late" had their stock returned to them, we're certainly seeing this here in Australia.

As for how this translates to Australia, although I think the economy in the US is far worse than it is here, I believe the same premises apply. The vendors that respond to the new market conditions the quickest will have cash ready to get back into the market. I'm starting to think that the vendors that hold out for the market to get "back to normal" will end up doing worse than those that move first - time will tell of course!

Category: Market News