As I continue to study the art market’s very slight, but seemingly strong rebound, I will continue to compile reports which should lend insight, not only to the workings of the art market as it improves, but to trends that should grow out of this latest bubble burst. What follows are some things to look out for and what they mean for the future.
First recoveries: Old Masters, 20th Century Decorative Arts
Why: steady prices, academic prestige, strong vetting
Old Masters are the last to fail, the least effected, and the first to rebound. The fusty, the academic, the tried and true, may bore the speculators and thrill seekers, but they are the best investment and a good early signifier of market growth. As I noted in an earlier piece about Banksy, the art market loves a good prank for sure, and mystery has worked well for street art, just as experimentation works well for contemporary art: but they don’t encourage confidence. Mystery = Uncertainty = Risky Investment.
Second recoveries: Rare Opportunity Buys
Why: Last Chance Appeal
Scarcity is always a driver. If your Picasso was painted in 1932 and there are only five 1932 Picassos and most of them are privately owned and not like to to be sold within your buyer’s lifetime, then your gaudy, nearly sentimental, middling painting becomes a “powerful memento of Picasso’s most famous lover” and goes for a record $1065.5 million.
Best Signal of a Confident Market: The Big Two start guaranteeing minimum sales prices again
Christie’s has already announced that it is negotiating minimums with clients. But they will be trying out new ways to share risk. We will know that the art market is thriving again when risk sharing is just one part of negotiations and auction houses feel free to offer minimums to clients without transferring burden: then sellers will not resort to selling through dealers in order to guarantee the value of their pieces. In the past few years, more and more sellers have turned to private dealers rather than risk falling hammer prices at auction.
As I noted in an earlier story, the auction houses seem to have caught on to the fact that they can hedge their bets in iffy financial times by placing resources in private dealerships: Christie’s recognized fully 12.5 % of it’s increased sales last year through Haunch of Venison and other private dealerships.
Another Signal of Art Market Improvement: Christie’s has also announced no plans to further cut staffing.