Tangible Personal Property in a Post-COVID World: The Current Market for TPP
Unlike in 2008-2010, the market for fine art, furniture, collectibles, and jewelry has not fallen off the precipice. Surprisingly, the market has been as strong if not stronger than this time last year. Logically, this does not make much sense as major corporations were laying off staff, small- & mid-size businesses were closing down, and there was a general sense of economic dread.
The auction market for tangible personal property was unsettling at the end of March through April and into May as the uncertainty of the economy had buyers holding their cash. However, the market did not crash but, instead, maintained a status quo, and as the summer months began, people began to buy: Why? Because the majority of Americans were working from home, many started to look around the room in which they were working and realizing that it was time to make some changes: a new painting to brighten up the room, a more comfortable chair, a real desk rather than working off of the dining table. Buyers had cash burning a hole in their pocket: going out for meals stopped or was significantly limited; although budgeted, the family vacations were put on hold; and the stock market was increasing still (especially in tech). In addition, many clients had planned or started interior design projects but had less options where to acquire property except to purchase from local sources or through the auction market. Often, dealers would travel to Europe and across America annually to acquire interesting and unique items for their clients. With travel halted or limited, many in the trade found alternative outlets in which to find property.
As a personal property appraiser, my business has never been busier. The beginning of the COVID shutdown brought a few alternative date-of-death appraisals as attorneys and CPAs were making adjustments for real property and client portfolios. Although a small part of the overall estate tax filing, the change in value for the personal property was minimal, and, in some cases, increased. With the trust companies and banks back to working after a shutdown in the second quarter, everyone is catching up as the IRS has not allowed any extensions in filing for the 706.
With the uncertainty of the elections over yet a potential “second wave” of COVID cases coming this winter, the market for tangible personal property is uncertain. However, if we are forced back into working from home and have some economic stimulus, I believe that the market for TPP will stay strong in 2021.