In a recent report by ArtNews from September, Daniel Cassady questions the accuracy of art market writers’ assessments, suggesting that the market may not be as distressed as portrayed. He highlights the perspective of Kenny Schachter, who argues that the data may be skewed, with the closure of some prominent galleries in New York City not truly reflecting the overall market condition. Cassady emphasizes that the constant negative coverage of the art market may be contributing to the downturn.
The primary market writers for Artnet News and ArtNews have been diligent in their analysis, but they may be looking at a limited set of data, as I will elaborate. In reality, the market may be facing more significant challenges.
I delved into art collecting during my early 20s while in medical school, financing my purchases through weekend jobs and loans. Back then, there were no art databases or auction history to reference. I vividly remember overpaying for our first contemporary artwork, Kenneth Noland’s “Shift” (1966). The art market experienced a sluggish period in the ’70s, but in 1981, it began a remarkable upward trajectory. The international art scene expanded, with galleries flourishing, especially in the vibrant East Village and Soho. Prices escalated rapidly, with some artists seeing their works triple in value after being featured in the Whitney Biennial.
However, in 1990, the art market abruptly crashed due to various factors, including the withdrawal of Japanese collectors and financial crises. The market slowly recovered until the 2008 financial crisis, which led to a significant downturn and subsequent reset. The market saw gradual growth until May 2022 when a sense of malaise set in and intensified.
The current decline in the art market can be attributed to several factors:
1. Irrational speculation pre- and post-COVID, resulting in inflated prices for untested artworks.
2. The Chinese real estate crisis and restrictions on moving money offshore.
3. Post-COVID spending on unseen works based on poor advice and algorithms.
4. High primary market prices that were unsustainable in a downturn.
5. Increased online sales by auction houses, leading to challenges in obtaining quality consignments.
6. Oversaturation of the art market, particularly with the rise of platforms like Artsy.
7. Expensive and excessive art fairs, deterring American collectors.
The declining market has been exacerbated by soaring art shipping costs and escalating rents, particularly in New York City. The closure of numerous galleries, including many younger establishments, has largely gone unnoticed, painting a bleaker picture of the market than what is being reported.
While art market analysts provide factual information, the data may not fully capture the true extent of the market downturn. Galleries’ private sales and profits are often undisclosed, making it challenging to gauge the actual state of the market. Reports from art fairs and auction houses offer insights, but they may not reflect the overall quality and selection of artworks. As the market navigates this downturn, galleries are adjusting prices and promoting lower-cost works, signaling a potential correction on the horizon.
In conclusion, despite the current challenges facing the art market, there are signs of optimism and resilience. New galleries are emerging, art fairs are bustling with activity, and collectors are reengaging with the market. As the market undergoes necessary changes, there is hope for a revival and a return to a healthier state.
