With Peter Loughrey, Director of Modern Design & Fine Art at Los Angeles Modern Auctions (LAMA), Appraiser with PBS Antiques Roadshow
An appreciation for art, like for beauty, is in the eye of the beholder, but a shift is occurring in the art market today that has little to do with art for art’s sake.
Director of Modern Design and Fine Art at Los Angeles Modern Auctions, Peter Loughrey, is perhaps the most experienced modern art and design specialist in the auction house industry, but he’s probably most well-known for his appearances on the PBS Antique Road Show.
Peter explains that the change in the art market has much to do with the difference in the motivation of the collectors of today as opposed to those of 30 or 40 years ago—the baby boomers vs the millennials.
An Object Of Beauty Or A Good Investment?
Back in the mid-80s when Peter began his career, baby boomers were buying art for mostly aesthetic purposes. So whether the purchase was a pop-art painting of a rising artist or a Louis XVI French slipper chair, it was bought to be enjoyed. Since then several things have occurred to change the landscape: Baby boomers are retiring or downsizing and either selling off or passing on these treasures to their heirs. In addition, over the decades, the value of many of these items has increased dramatically, qualifying them—if they weren’t already—as investment pieces. A whole new resale market has emerged that could benefit the seller who might be in need of additional finances going into retirement.
The millennials who are now coming into the art market, says Peter, “have a taste for modernism and for contemporary art periods and movements. They’re focusing more on the pieces that have the most value-oriented backgrounds.” His advice to them always is to “find pieces that you like that are also holding their value and are consistently tradable.”
Who Can You Trust In The Digital Age?
The digital age has placed a limitless supply of information literally at our fingertips. In the past, one had to trust an art dealer who may or may not, in fact, be trustworthy and who typically held on to information making it difficult to determine the value of an item at any particular moment.
The Art Market Turned Upside Down
The dramatic change, says Peter, is that… “there’s a whole network of dealers like myself who will share that information for free and very quickly. That is actually a unique distinction about the market today, as opposed to thirty years ago. That gives people the option of understanding what things are worth, almost on a daily basis. Almost like you would look up your stock portfolio, you can now look up your art collection portfolio.”
Exciting stuff if you are an art lover or investor.
Disclosure: The opinions expressed are those of the interviewee and not necessarily of the radio show. Interviewee is not a representative of the radio show. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by the radio show.
Steve Pomeranz: With the new digital age ever encroaching into our lives, even the art market is changing rapidly. As baby boomers age and then begin to de-accumulate their art, millennials are right behind them snapping it up in their own unique fashion. To take us into this new art world and it’s ever changing landscape, Peter Loughrey joins me. Peter is recognized as being the most experienced modern art and design specialist in the auction house industry. He’s the Director of Modern Design and Fine Art at Los Angeles Modern Auctions. Also you may know him because he happens to moonlight as the modern art authority on PBS’s Antique Road Show. Hey, Peter, welcome to the show.
Peter Loughrey: Thanks Steve.
Steve Pomeranz: Give us some historical context. When did you start in the industry, and what was it like back then?
Peter Loughrey: Actually I started very early. Almost as a kid. I was eighteen and just out of high school. My older brother had developed a business of selling mid-century modern furniture and twentieth century icons of popular culture. I joined him as kind of an intern. By the time I was twenty, I was already developing kind of a sense of connoisseurship about works made in the twentieth century.
Steve Pomeranz: You were initially involved in furniture, right? You started your own gallery or your own store, right?
Peter Loughrey: Yeah. Our original passion was objects. Furniture was a big part of it. We also sold glass, ceramics, books, jewelry. Anything that was made by a twentieth century artist or crafts person that was rejecting classicism and taking avant-garde practices into their medium.
Steve Pomeranz: Did you eventually sell that business and move into another area of the art world? How did that transition?
Peter Loughrey: No, actually it just kind of morphed into a more developed art model. The buyers today are completely different than the buyers back then. I think I used to sell the enthusiasts. People who just wanted to surround themselves with these interesting objects, including works of art. Today people are looking more at these objects in the context of investment, as well as nice objects to surround themselves with.
Steve Pomeranz: Yeah. I want to get into that. The difference between the baby boomer buying art and let’s say the millennial market. Baby Boomers are more apt to collect for aesthetic reasons. I guess in a sense … I’m a Baby Boomer, we’re used to buying and having objects. If they’re objects of great beauty, surrounding ourselves with them as you said.
Millennials have kind of a different attitude, I think. Maybe they’re more into the experience of things? Rather than owning things? I don’t want to put words into your mouth. I wanted to kind of get that conversation started and see if I’m going down the right path.
Peter Loughrey: Yeah. I think when I started in the mid-80s I was selling mostly to baby boomers. They really did want to have an aesthetic experience of acquiring pieces. Becoming what they perceived as being a modern day collector of objects that you can use, as well as just objects to surround yourself to enhance your daily life. Over the years that’s kind of morphed because a lot of this material that was very inexpensive at the time has gone up in value. You really can’t ignore the fact that when you’re buying these pieces today, it is an investment. It’s one of the biggest reasons to make a decision. “Am I going to really buy this dining table that is forty-five thousand dollars today?” That’s a significant investment.
It’s going to take an investment to acquire these pieces today, so you really have to be more cautious and more thoughtful of what you’re buying. To make sure that you’re buying the works that are continuing to hold their value.
Steve Pomeranz: When you’re younger and you don’t really have the wherewithal to spend a lot of money, then it’s for art sake because you like it. If that table was a thousand dollars thirty years ago, and now it’s a forty-five thousand dollars and you’re going in there going, “I’m going to spend forty-five thousand dollars on this dining room table. There better be another element.” Or at least the question you ask yourself is, “What is the value of this thing going to be in the future.” Right?
Peter Loughrey: A more significant portion of your funds are going towards these purchases today I think. You have to be cautious and make sure that you’re making a wise decision.
Steve Pomeranz: One of your ideas that you’ve written about is one where you think baby boomers—I mentioned this a little bit in the intro—will be de-accumulating their art over the next twenty years. You think the baby boomers, in a sense, will be out of the art market, and the art market has changed, or the collective psychology has changed. In other generations, a lot of this art would have been passed down through inheritances, but that may no longer be the case. Can you explain that to us?
Peter Loughrey: The Baby Boomers have now been collecting for over thirty years. Imagine the arch of a collector. They start collecting when they’re in their thirties and forties. At some point, those collections need to be disseminated. In the earlier eras, these works were just passed down through the family, like you mentioned, as sort of heirlooms. Today, we’re seeing collectors and their offspring, you have different ideas of what they want to keep and what they want to sell. Sometimes these pieces have gone up so much in value, that it really is a strong consideration to consider the financial value of these works. I think we’re seeing more baby boomers starting to sell now as they get to that age where transition of their collection is going to be more popular. Rather than keeping these works together as collections.
Steve Pomeranz: I guess the idea is that if, in fact, you’ve been fortunate enough to own this art, and it’s now appreciated greatly, you’re going to ask yourself the question, “Why don’t I just sell it now and get the benefit from the value of these thing. To diversify my financial holdings, maybe do some of the things I want to do.” Not knowing, first of all, what the value of this art is going to be decades from now as tastes and fashion shifts, and maybe the kids don’t really care for the art anyway because they have their own sense of style. If, in fact, baby boomers are going to be selling off their art into the marketplace, what are the opportunities for investors there? I’d love to see something that’s almost a significant long- term trend, it seems like you could make some investment plans to take that opportunity.
Peter Loughrey: I think one important thing that exists now that didn’t exist thirty years ago when I started is the readily transfer of information. It’s just so much easier to understand what things are worth now than it was thirty years ago. Thirty years ago, you really needed to go to an expert. The expert tended to keep the information to themselves. It wasn’t in a dealer’s best interest to share that information. You really never were sure about what something was worth thirty years ago. You only could find out by asking what a dealer was charging for it.
Today, information is so easy to exchange that almost anyone now can look up the value of works that they’re collecting. There’s a whole network of dealers like myself who will share that information for free and very quickly. That is actually a unique distinction about the market today, as opposed to thirty years ago. That gives people the option of understanding what things are worth, almost on a daily basis. Almost like you would look up your stock portfolio, you can now look up your art collection portfolio.
Steve Pomeranz: There’s all this greater transparency which is a very, very positive outcome of the digital age. I personally have bought items online through various auction sites. I’ve been very, very happy with the idea that I can buy a David Hockney, which was one of my favorite artists and know that it’s the real thing. Then have it delivered. Then have it framed and have it up in my home. I don’t think I really would have done that. I’m kind of a low-level collector. I wouldn’t have done that necessarily twenty-five or thirty years ago. It would have taken a lot more effort for me to go and start shopping dealers and understanding the market. As you say, they would keep the information close to the vest.
Let’s talk about digital. By the way, I’m speaking with Peter Loughrey. He’s the Director of Modern Design and Fine Art at Los Angeles Modern Auctions. You may know him because he also moonlights as the modern art authority on PBS’s Antique Roadshow. Peter, how much has the digital world changed the art market? Tell us now where millennials are headed in this area.
Peter Loughrey: The digital world has turned the art world upside down. Thirty years ago it was very difficult to get information as a collector. Today, it’s very easy. That means you can be sure of what you’re buying, that it’s authentic, for example, or what it really is worth. You can find out things like prints and multiples, objects that are not unique, but made in multiple. You can find out what other examples have sold for fairly easy and very quickly. You can understand, “Well, the last one sold for X, then I feel comfortable paying X for this one.” That presents the marketplace with a kind of a creditable market value that was not seen in previous generations.
Steve Pomeranz: Right. What are millennials buying these days?
Peter Loughrey: I am seeing a large group of millennials coming into our auction galleries and they are looking for investment-quality, twentieth- century art and design. That means that they have a taste for modernism and for contemporary art periods and movements. They’re focusing more on the pieces that have the most value-oriented backgrounds.
Steve Pomeranz: What does that mean? Give me an example of that.
Peter Loughrey: If you had a Venn diagram of a circle of all of the things that you like. Another circle of all of the things that have tradable, reproducible value, and you overlap them in some way. Where they overlap is where you should be focusing on. That’s the advice I give young collectors. Find pieces that you like that are also holding their value and consistently tradable.
Steve Pomeranz: That’s very interesting. Unfortunately, we are out of time. Peter Loughrey is with me. You can find him at LAModern.com and also follow him. Are you still working the PBS Antique Roadshow or was that something you did a few years ago?
Peter Loughrey: No, this is going to be my fifteenth season coming up.
Steve Pomeranz: Wonderful. Congratulations.
Peter Loughrey: Very proud to be associated with the show. It’s just an incredible experience.
Steve Pomeranz: You can find more about Peter Loughrey at LAModern.com. Hey Peter, thanks so much for joining us.
Peter Loughrey: Thank you, Steve.