The popular rhyme, for children, does not tell us whether the piggy was buying or selling at the market. However, he appears to be going there to be in the center of things – he is not at home nor is he eating roast beef. Which brings to the point, that antiques and collectibles are not valued, sold, or bought in the secluded world of one’s home, subject only to the owner’s thoughts, wishes, or desires. Transactions occur in a market. In fact, transactions can occur in many markets. We as appraisers are concerned with selecting the most common market. The most common market is defined as the one in which the property would most frequently sell to the public.
For instance, a person could sell a painting by Matisse in an estate sale but the most common market is an auction. Not any auction, but a cataloged auction by a large well-followed auction house with international presence. It is important to note that the most common market for valuation can change based on a variety of factors or market forces. Factors can include condition, location of the property, how quickly the sale must occur, reason for the valuation, the market that the person most normally shops, and quantity buying or selling. Forces can include a recent death of a famous person or an increase in demand simulated by either a craze or an economic factor.
An example of an economic factor that we have seen recently is citizens of a country that was previously oppressed politically or economically open up. This introduces a large number of “new” people into the marketplace with new wealth attempting to procure items and build a collection. Frequently, these people are interested in owning or buying back part of their national heritage. Recent examples include Japan, Russia, and China. I found this article on Digg that highlights this point. A pair of Chinese vases that had an auction estimate of 40,000 – 60,000 pounds and sold for 500,000 pounds. The article states “The market for Chinese items of high quality has boomed in recent years due to the incredible growth of the economy in China. Some Chinese antiques are worth five times as much as they were just three years ago.”