How to Turn Rugs into Riches
THE CARPET-COLLECTING MARKET IS A COMPLICATED FIELD FOR POTENTIAL INVESTORS, EXPERTS NOTE.
Many of us value carpets solely for their decorative and utilitarian value. While that’s a fair classification for most rugs, it’s not the case for collectible carpets, which qualify as and are priced as works of art.
Top-grade antique rugs can sell for prices well into the mid- and upper-six figures and higher: Sotheby’s auctioned a Persian carpet for over $30 million in mid-2013.
Making the Grade
As with other art categories, there are multiple sub-markets and quality grades among collectible rugs.
Jan David Winitz, president and founder of the Claremont Rug Co., in Oakland and Berkeley, California, created the Claremont Rug Pyramid as a classification tool to summarize the market’s dynamics.
At the pyramid’s pinnacle, Level 1 rugs are museum quality with historical value and date from the 13th to 18th-centuries. These pieces are unlikely to show up in a private collector’s home, Winitz says.
“Rugs from the First Golden Age of Persian Weaving (Tier 1) were woven during the reign of the famous patron of the arts, Shah Abbas, in the 16th and early 17th-centuries,” he explained. “These pieces rarely come to market and are almost entirely owned by royal families and museums.”
Level 2 and Level 3 carpets are considered “high collectible” and “collectible,” with dates ranging from the early 19th century to 1875 for the former and circa 1875 to the late 19th century for the latter, according to Winitz.
Levels 4 (1900-1925) and 5 (1925-1969) are the high-decorative and decorative categories, respectively, while Tier 6 rugs are reproductions that typically date from 1970 to the present.
Rugs below Level 1 are more readily available to collectors, and Claremont’s inventory consists of pieces from Levels 2 through 4, which range in value from approximately $20,000 to more than $500,000.
Highly collectible to museum-level rugs (Levels 2 and 3) can easily be valued in the $70,000 to $500,000 range, depending on size, rarity and condition, he notes.
The wide array of prices and styles, which can range “from geometric rugs woven by tribal groups in the countryside to floral rugs created in the large cities,” make it difficult to summarize buyers’ preferences, Winitz notes.
It’s a global market, as well. Claremont’s clients reside on five continents and include “more than 50 Forbes list billionaires, many of whom have private art collections which include their rugs.”
From a general perspective, however, there are some broad facts for potential investors to keep in mind.
“For collectors the most highly prized weaving groups include the tribal rugs of the Caucasus Mountains, Ferahan and Ferahan Sarouk, Mohtasham Kashan and Bakshaish. At their finest, rugs of these types are comparable to rare classical paintings or sculpture in their artistic expression and market value,” the rug expert explained.
“The best 19th-century rugs of the 85 subgroups of the Caucasus Mountains, the Bakshaish rugs of northwest Persia, the Ferahan Sarouks of central Persia and the finest of the classical Persian city rugs, such as Mohtasham Kashan and Laver Kirman,” he said, “have a particular strong following among connoisseurs because of their unique artistic and mature color palettes.”
Guidance for Collectors
News reports of increasing prices at the top end of the market indicate that interest in high quality antique rugs continues to grow.
Nonetheless, carpets will be a new asset class for many buyers, so the usual caveats apply about starting cautiously and working with trusted advisors while gaining market knowledge. The Claremont website has numerous buyer-education resources and an online gallery for getting started.
Winitz also shared several suggestions for buyers: “First, rugs produced after 1920 to the present day may be interesting as home furnishings, but they have no intrinsic art or investment value,” the expert shared. “Because almost all rugs from the Second Golden Age were originally placed on the floor and encountered foot traffic, their conditions will vary.”
According to the rug expert, “The best and most collectible rugs will almost always have signs of use and the passage of time. This includes some wear to their pile and perhaps some stellar restoration done by highly skilled specialists using natural dyes.”
In addition, he noted, “The vast majority of Oriental rugs available today are decorative and have no investment and little artistic merit (Levels 5 & 6 in Claremont’s Pyramid.).”
The expert advises those interested in collecting to find a dealer who specializes in rare antique rugs. Such an individual “can help educate them” and should have “a broad inventory of Second Golden Age rugs and has knowledgeable staff.”
Finally, while the best (Levels 1-3) antique Oriental rugs are potentially significant precious tangible assets, according to Winitz, the market “is more attuned to those who collect art for its intrinsic value with the understanding that its appreciation in value has been steadily upward for more than three decades but only at the top end.