Playing the Antiques Roadshow Game

Do you love the Antiques Roadshow as much as we do?

Drew and I have been playing the Antiques Roadshow "game" for about 10 years. It goes like this: the owner of the thing presents his item and its story to the appraiser on the show; before the appraiser divulges their value determination, each of us predicts the outcome; closest number wins. If there's disagreement with their evaluation, we do the research to determine if they're "right." Truth be told, Drew's a winner. I'm betting you play this game, too. Some people in our (appraisal) profession don't have kind things to say about the show. They say that the values represented on the show are at best, dubious, or at least, not realistic representations of the marketplace. As entertainment and information, Drew and I find it compelling. In any case, it's a show we need to watch and know about because our customers, clients and friends watch it. If I had a nickle for every time a client said "I saw one of these on the Antiques Roadshow so I thought I better have it appraised" I'd have at least enough for a lifetime subscription to the Antiques Roadshow newsletter.

I like a couple of the appraisers a lot, mostly because I learn from them and they are funny, smart or both. We've met many of them and have a few on speed-dial. Alan Fausel on fine art, Noel Barrett on toys, David Rago on early 20th C. arts and crafts, Philip Weiss on collectibles, and of course, the Kenos on antique furniture are favorites to watch. Sometimes, they are like kids in a candy store. I've included links to each of their archived TV appraisals on video. I get a kick out of watching these more than once because I do learn something new every time. Then again, I have America's Funniest Videos on permanent DVR, too. Remember, AFV was America's first social networking site!

Continuing Care Retirement Communities

July 26, 2010 Senate Begins Hearings on CCRCs On July 21, the Senate Special Committee on Aging chaired by Herb Kohl (D-Wisconsin) convened a hearing on the state of the CCRC (Continuing Care Retirement Community) industry. For readers or followers of the newsletter, Apex Health News, you may recall a number of articles on the state of the industry and specifically, how the CCRC and Senior Housing industry has been impacted by the economic downturn in general and the the languishing housing (residential) market specifically. In addition, Reginald Hislop, III, Managing Partner of Apex Healthcare has written numerous articles on his Blog regarding CCRCs and their fortunes in the current economic climate. Recall that in the wake of the failure of the Erickson Retirement Communities, some associated but not related concerns regarding other high-profile CCRCs in financial distress (the Clare in Chicago, etc.) and negative industry outlooks and debt downgrades in the sector via Fitch, the Senate Special Committee on Aging began an investigation into the CCRC industry. The most notable step taken was a request to the GAO to complete a study on the industry. Somewhat simultaneous with the GAO request, the Committee sent out letters of inquiry to five CCRC organizations. A report summarizing the information received via the inquiry was produced. As he reviewed the findings in both reports, he noted similarities in themes. He also noted that the Committee’s skew would be toward calling for added regulation of the industry, directed state to state. As the Senate Special Committee has only “fact-finding” and “recommendation” powers, we didn’t expect a great call or swell for federal involvement beyond this point. Providers and trade associatons however, should take caution as the recommendations from the committee reports (GAO and other) are likely to produce added regulations for the industry on a state to state basis, especially given the nature of the findings. Mr. Hislop's summary of the information is below. The vast majority of states offer minimal regulation of CCRCs and fewer still (17) include requirements for periodic actuarial studies (a recommendation from the Committee). Twelve states have no regulations at all. CCRCs that were tied to certain forms of debt instruments such as bonds were more closely watched financially than those that had other forms of debt structure or no debt at all. While bankruptcy and/or failure in the industry is rare, the biggest risk to residents in financially unstable CCRCs is abrupt rate or fee increases. A secondary, less likely risk, is loss of principle or investment via a downpayment or entry fee should the CCRC become illiquid. Only 16% of CCRCs pursue voluntary accreditation. Recent downturns in the economy have added real estate and credit risk to the industry. Providers have found it difficult to secure new debt or to refinance existing debt at competitive terms in the current credit markets, making operating costs associated with debt more expensive and/or, keeping the CCRC from proceeding with needed capital improvements. From a real estate perspective, the fall in housing prices coupled with a very slow re-sale market for existing homes has hurt CCRC occupancies and thus, revenue profiles. Operating cash reserves and cushions as well as investment reserves have declined significantly over the past two years. Of the facilities reviewed by the Committee, four out of five claim to have reserves equal to two months or less of operating expenses. Three of the five report having debt levels greater than asset equity and one reports having a refund liability on contracts equaling eight times more than net worth. The Committee is recommending that states adopt more uniform regulations for CCRCs in the focal areas of licensing, reserves, recurring monitoring and analysis, periodic reviews and analysis, and consumer disclosure. Important or notable recommendations include requiring periodic actuarial analysis, periodic financial examinations conducted by the state or under the auspices of the state (i.e., independent accounting firm following a prescribed methodology), a review of marketing practices, audited financial statements, and a review of financial ratios to assure capital stability and liquidity. On a final note, Mr. Hislop found both reports interesting in terms of their similarities and their differences. It is clear from the report generated via the Committee’s direct inquiries that the inquiries were made to less established CCRCs and/or newer developments. This sample, in our opinion, is hardly representative of the industry. In the GAO report, the investigation probed through activities in only eight states. While he found the GAO report more “balanced”, neither document shed any new light on the industry or its issues. The bottom-line and somewhat concluded within both reports is that the industry, while somewhat temporarily troubled by the economy, is good for seniors and offers a significant and important option for retirement and long-term care. The troubles that are so often highlighted in recent times, are representative of a small slice of the total industry, typified by newer developments, focused on affluent seniors, in crowded markets, heavily leveraged, and in his opinion, less than adequately researched prior to development. Stabilized projects under the control of experienced ownership groups and operators, will continue to prosper and remain stable, even through the slow recovery.

Fraud for Gold - SHAME ON THEM

NJ gold selling consumers beware! The Star Ledger published an article Thursday, July 2 Cash-for-Gold fraud tips the scales against sellers. We've been warning our clients and friends for years to avoid selling their precious metal jewelry and coins to charlatans. "They sound so nice and professional."

The Better Business Bureau and Consumer Reports has been warning that consumers have been underpaid or flat-out robbed by television and internet cash-for-gold operators. The NJ Office of Weights and Measures has formed a Precious Metals Task Force to conduct surprise inspections of scales. The biggest rip-offs are the "transient buyers;" the ones that take out the full-page ads in the Star Ledger! Springs were found in their scales, cheating customers out of accurate measurements of their gold and silver. Some fraudulent NJ dealers even had store-fronts, with scales that were all inaccurate in their favor. What a coincidence!

In case you're interested in selling your unwanted gold and silver jewelry, we've just gotten a new state-of-the-art scale to help you take advantage of $1200/ounce gold. Fridays are a good day to meet with Drew and weigh-in on your decision making. He'll explain the testing and weighing methodology. Give a call and make an appointment! You'll be richer for it.