in other words

Everything you ever wanted to know about the art market but didn't know who to ask

Where we were and where we are going

Then and now: ten years in the market

Diego Velázquez, The Triumph of Bacchus (1626-28). Wikimedia Commons

BY Allan Schwartzman
co-founder of AAP & chairman of Sotheby's Global Fine Arts

Published
In Allan's Intro

A couple of weeks ago a journalist called me to inquire if a particular collector I work with had snapped up a lot of bargains in the wake of the financial collapse of 2008. As I remember it, that period felt as though the whole world was holding its breath in disbelief when many of the central institutions that underpinned the financial stability of this country and much of the world began toppling like a house of cards.

And yet, while a deep chill permeated much of the art market, and amid hiccups, slowdowns, and the inevitable shifts in taste that happen at moments of both vulnerability and strength, the art market did not collapse. Certainly, there were a few over-leveraged titans who were forced to sell masterworks for quick cash, but by and large the art market remained solid, and has since grown bigger, more confident and more intelligent than ever.

Demand for clarity

In general, the going was slow, but even so, great works continued to sell for exceptional prices at auction and privately. A number of clients we work with got some of the greatest opportunities in their many years of collecting art. Sometimes these were opportunities of price; more often, of greater access to the most desirable art. Indeed, our advisory clientele grew in 2009: both seasoned collectors seeking clarity about the market to gain confidence about continuing to collect art and in a couple of instances, new collectors.

How I saw it, the broader confidence in art as rare, significant and valuable, if not always rapidly liquid (to the benefit of art and the market) was resolute, even if temporarily challenged. The very rich, who are the foundation of the art market, were still very rich; much of the market slowdown at the top end was rooted more in uncertainty about how long they should keep their cash squirreled away than any loss of confidence, faith or enthusiasm for collecting art.

Collectors got smarter and more select. We are seeing this momentum towards the highest levels of rarity and quality being borne out today—whether for an ever-shrinking supply of masterworks by the most important artists of the past 150 years or for artists yet to face the test of time.

Again and again we have seen previously unimaginable prices achieved for the best pieces, while average works, often by the same artists, become increasingly difficult to sell, even for a fraction of their previously perceived value. We will see this again at the November auctions, no doubt.

Fundamental shifts

There will always be bubbles and shifts in taste—they keep the art market on its toes, even if only after lengthy bacchanalian feasts. At the same time, the world and the market have changed fundamentally over the past ten years. Art production and collecting have moved away from a principally western orientation and are now truly global. A new generation of private and national museums has been born, on par with, yet substantially different from, the Barneses and Fricks of the past. The rise of mega-galleries has concentrated power, taste and value often, as we are just beginning to see, at the expense of the pioneering spirit of collectors and patrons that shaped art collecting for well over a century. Countless artists and galleries are being caught in the crossfire of the ever increasing commodification of art while, at the same time, there is both fatigue amongst the new collectors who have emerged over the past ten or so years—now no longer so new—and an increasing appetite amongst other collectors for exploring realms that have been previously ignored.

Whether we consider this hindsight or entrepreneurial resourcefulness, the art market is becoming a kind of self-sustaining beast, digesting and expelling art while foraging to re-evaluate some of the same old things from new perspectives.

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