As an economic recession looms larger, the future prosperity of the art market remains very much a concern. OMNP continues its earlier coverage with further headlines and analysis on the treacherous path ahead and how Old Masters will be affected.
October rounds out with lukewarm results from the Frieze Art Fair in London-the first major commercial event for the Contemporary art world since the financial collapses of September. Judd Tully described the sober scene in ART INFO:
The Era of the Five Minute Decision is Over [Judd Tully, ART INFO]
Other coverage:
Art imitates life as boom shows signs of bust [Richard Brooks, UK Times Online]
Big New York Auction Houses Brace for a Slower Dance at the Fall Sales [Carol Vogel, NY Times]
Further disparaging news came later in the month from Sotheby’s. In addition to its stock value plunging more than 75% over the past year by early October, the auction house disclosed that it had recently lost over $15 million dollars on auction guarantees for underperforming lots In order to win business, auction house agree to guarantee a consignor a certain base price for a consigned work,work regardless of whether the work sells.
Sotheby’s Says It Lost $15 Million on Art Auction Guarantees [Philip Boroff, ART INFO]
The struggles of such a substantial commercial institution does not spell for a rosy future ahead for the market-a view echoed by the annual report of research database ArtPrice on October 22nd. From an optimistic standpoint, however, it can be surmised that the current struggle could be a mere tempering of the breakneck pace of the market’s rise over the past two decades. As ART INFO reported:
“According to the report, which was issued this week to coincide with the FIAC contemporary art fair in Paris, between midway through 1991 and midway through 2008, contemporary artwork rose in value at a rate of 132 percent, or five times the appreciation of Old Masters, 19th-century, and modern and postwar pieces.”
The Sober Mood Moves to Paris [Art Market Monitor]
A Sharp Correction to Contemporary Art Market Likely, Report Says [ART INFO]
Conversely, market opportunities have simultaneously come to light. One pervasive thought has been that bear market conditions will allow for connoisseurs and committed collectors to prosper, as the cash-strapped will put masterpieces back onto the market. Art advisor Lowell Petitt remarked upon this in reference to a $40m Degas pastel recently being put up for sale, in Liz Gunnison’s article below:
“The bears really bring good things to market, so the highest-ticket items are coming out of the woodwork now, arguably even greater trophies than in the past few years that could garner even greater record prices,”
Painting a better picture [Liz Gunnison, Portfolio.com]
Perhaps the most pithy remark to emerge from the glut of opinion,however, came from the online publication Art Market Report. In response to the preemptive cries of the market’s demise, by the mainstream media, a recent entry to the site postulated that:
“(B)y definition, the art market is a bubble.”
The market’s sudden drop in prices comes from a misconception of art’s performance as an investment. This is a commodity that has solely been considered as one that appreciates.In reality, of course, it fluctuates:
“The problem with the art market as a market is that it only feels comfortable with one side of the market action–the rise in value. However, markets go up and down; and both directions are about distribution. Objects move from one set of hands to another based on prices. Falling prices create opportunities for buyers just as rising prices create opportunities for sellers.
That only works in markets where the participates are comfortable with a greater level of exchange than the art market has heretofore been able to countenance.”
The End is Nigh (and Other Press Hysterics) [Art Market Report]
More market dissection and upbeat perspective here:
Cool-headed buyers are now running the show [Souren Melikian, International Herald Tribune]
Collectors Snap Up Fontana, Quinn; Shun Riskier Artists at FIAC [Scott Reyburn, Bloomberg]
FIAC puts the squeeze on Frieze [Georgina Adam, The Art Newspaper]
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