I’ll get back to the new series Art Mythunderstandings next time with a post about artist’s signatures; but for now I want to look at the art market’s performance in 2011 and think about what 2012 might bring us.
It is usual this time of year (that is, after the last one and before the next one gets going) to look back at the art market numbers for the previous year and various magazine articles are addressing that. Here is my general take and then an opinion of what is driving the high-end sales that we keep hearing about.
In 2011, everyone told me whenever I went into galleries, to lectures or to parties, “the art market is kicking ass!” How do people know that? Easy. The huge PR departments of Sotheby’sand Christies, and increasingly Bonham’s and other second tier auctions, are busy after every sale sending out spin releases showing that the results were absolutely astounding and (it is at least suggested) art and valuable personal property are a great investment and the richest and the smartest are confirming that with every sale.
It is apparently true that the sales at the very top of the international market are doing well. There are record sales being made and “new” money from China and, to an increasing degree India, has replaced the Japanese money that launched the modern international art market. In 2011 not only have the prices paid been up from the previous two years, but the number of artworks “bought in” (not reaching their reserve price) has dropped.
If, however, one looks at the market for decorative art (a big topic in my book), it is impossible to escape the fact that a lot of art shops and galleries have gone out of business. It is not difficult to find empty storefronts and galleries in art districts of every city. Interestingly, here in Santa Fe there is another factor affecting the less expensive levels of the market. Since a lot of people come here with the expectation of returning home with a painting under their arm or an Indian pot being shipped home, many sales still take place, but it appears they are for less expensive works. One very popular painter of western landscapes has moved from painting “home size” paintings in the 24 X 36 inch range, to doing what he calls “depression paintings” that are just as appealing, but a quarter the size and price of his traditional creations.
So what about the middle of the market? For all but a few galleries it seems that the vast portion of the market between the top and the bottom continues to be much like the middle of a donut–a hole. I believe that the most and the hardest hits have been taken in the midrange and it is in those galleries that the beautiful, young art history graduate art consultants have been replaced by the owners themselves. Shows are mounted on smaller budgets and relatively few new clients come in the door.
So what makes the expensive art so desirable to those who still have lots of money, disposable money? Art has come to function as an all but liquid currency of ballooning excess wealth. We all know that in recent years the number of fabulous fortunes has skyrocketed, in spite of national near-meltdowns, unemployment figures and the US Government’s calculation that one third of all Americans meet the requirements to be considered poor. That’s 100 million people! Those concerns do not impinge on the way the superrich spend their money.
With so much evidence that we’ve been ill-served by traditional financial institutions and investments, is it any wonder a lot of people have become interested in “tangible assets”? The art sales at auction have gotten peoples’ attention. 2011 saw the largest auction season ever: $10.7 billion, according the Artprice.
Interestingly, just a year ago the auction spin was informing us that the antiques market was hot! hot! hot!–especially antique furniture. Well, it just didn’t continue and we are once again reminded that there is no such thing as “THE art market”. My book Artful Dodgers will demonstrate this. Some sectors are doing well and are probably going to continue doing reasonably well in 2012, but I expect to see a lot more vacancies on those famous art streets: Worth Avenue, Michigan Avenue, Canyon Road and Soho, Scottsdale, Fisherman’s Warf and Carmel.
A lot of the support for the high-end sales is coming from China and places like India and the United Arab Emirates, the Russian buyers are less in evidence and the eurozone is on thin ice. I think my son in Rio de Janeiro should be developing a practice in international art advisory and sales.
The outlook for 2012 is a lot like a weather forecast; we have lots of information today, but just what will happen when an airmass meets the mountains is anyone’s guess.
Next year at this time I’ll look back over 2012 and say, “See. I told you so.” Perhaps you won’t remember that I ducked the art market prediction trap.