Why architecture isn’t collectible

By Felix Salmon
June 29, 2009

David Galbraith, looking at a floor of Le Corbusier’s Villa Stein on the market for €1,080,000, concludes that either “architecture is vastly under valued or painting prices are almost entirely irrational”.

I hope he’s right: architecturally-important residences should sell at a premium. It’s by far the best way to prevent them from being demolished. But it’s hardly irrational that they don’t.

The apartment in the Villa Stein, for instance, is in Garches, an undistinguished western suburb of Paris which, in the words of one website, is “mostly known for the Raymond PoincarĂ© Hospital, which is specialized in medical treatment of road accident victims”. Not the kind of place that a rich art lover would really want to live. What’s more, it’s only 105 square meters, or 1,130 square feet: decidedly cramped if you’re the kind of person who is likely to drop millions of dollars on an artwork.

A great piece of architecture in a desirable location can sell at a premium, and a great piece of architecture which can be packed up into six containers and reconstructed anywhere in the world will sell for even more. But in general people looking to buy important architecture only want to do so if there’s a reasonable chance of them actually living in the house in question — at least for some of the year. If such people don’t want to live in Garches, then the seller of the Villa Stein flat is out of luck.

I am ultimately bearish about the prospects for collectible architecture — while it’s possible to imagine a world where it exists, it seems impossible to get there from here. But that doesn’t mean that the entire art market — a market where people get to buy unique and portable objects to savor and enjoy at their leisure — is irrational. It just means that architecture doesn’t behave in the same manner.

More From Felix Salmon
Post Felix
The Piketty pessimist
The most expensive lottery ticket in the world
The problems of HFT, Joe Stiglitz edition
Private equity math, Nuveen edition
Five explanations for Greece’s bond yield
3 comments so far

If “architecturally-important residences should sell at a premium”, is that due to the pleasure of owning (and conserving) them or the pleasure of living in them? If it’s entirely the former, someone could buy this up and rent it out. If it’s partly the latter, the rent price could go up, but then your observation about the kind of person who would want to live in the neighborhood becomes more salient again.

Today’s unobtrusive web cams would enable the art collector owner of a significant architectural space to display visually striking or significant views of the space on a large screen at the collector’s lavish and spacious primary residence.

This possibility could be combined with the renting out that dWj describes, affording the collector a private “watch other people live” web site.

Posted by bdbd | Report as abusive

You shouldn’t downplay the lack of a secondary market that has self-interest as a motive of establishing and increasing value. Even a modest home by an architect (well know or not) is difficult to value or to finance (regardless of the RE market). So the traditional secondary market is unstable. If galleries bought and sold actual structures (which, given the pricing, isn’t unreasonable — Gagosian or Saatchi could quite easily afford a number of notable home, even speculatively) instead of drawings, then the market would probably increase. This might encourage museums to do the same, though problems of access would arise. The Lowell House in LA was for sale (maybe still is? I think you covered this a while back) and being marketed as a collectible of sorts, but there is next to no public access. You can’t even see it (at least you can walk down the street in Silver Lake and see a collection of three Neutra houses with some degree of satisfaction) from the street, let alone appreciate the complexity of the plan. The best you can get is watching L.A. Confidential.

Posted by 99 | Report as abusive
Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/