I came upon a story about a facet of our current economic environment as it relates to art: A report from Sotheby's about the secondary art market. I don't think it will significantly effect large numbers of people compared to, say, the recent report of staggeringly high unemployment numbers, but it seems like a telling detail for the art world. In a press release from November 7, 2008, Bill Ruprecht, Sotheby's President and CEO states, "...our business is not immune from the unprecedented global economic turbulence." This message is positioned for Sotheby's clients in a recent video report called "Contemporary Art Market: A Candid Look from the Inside."
By viewing the video we learn that auction sale prices are down and estimates for art auction sales in the future are also expected to be lower. Tobias Meyer, Worldwide Head, Contemporary Art and Anthony Grant, Senior Specialist, Contemporary Art Worldwide, are using the November, 2008 auction most specifically, and their collective experience with several significant market cycles, to quantify recent changes in the art market. There are exceptions, they were careful to point out, but overall, prices are back to where they were 3 - 4 year ago.
The video report is based on the period between last summer, as artworks and estimates were assembled, and this fall, when Sotheby's large Contemporary Art Sales in New York City took place on 11th and 12th, 2008. During this time period, the Dow Jones Industrial Average dropped over 3,500 points, or 30%. Meyer saw the November auction as a "very, very important event in the art market" due to the weakened economic environment. Grant, observed a shift from "telling a collector how much they had to pay" for an artwork to "[the collector] telling us where they would be."
Beginning in November and going forward Meyer put special emphasis on the "presence of the object" for sale. "A great work holds and exceeds its estimate." A tightening of standards is underway and collectors will be looking for works that are"rare, great and fresh." The specialists observed that the buyers in November were established collectors who watch prices over time and recognize the opportunities presented. Meyer believes that "there is a market, it is stable and has a long tradition" and for now "it is a collector's market."
My takeaway from the report is that the financial market's volatility means art market assumptions will have to be checked more often, and possibly even thrown out and replaced with brand new ones. A broad-brush approach won't work as easily in the future: both in assessing the artworks to sell and the intentions of their potential buyers. Even though prices for blue chip artworks are down, the market's capacity for buying must be down, as well. I think, as with other markets, such as the stock and real estate markets, the level of uncertainty is high for the foreseeable future.
So, stepping outside the large, corporate art sales environment of Sotheby's for a moment (but staying safely within the art world): will there be any increased opportunities for art sales in the primary market? Will collectors who might not find the high level of quality or "freshness" that Meyer and Grant are suggesting they look for in the secondary market, look beyond Sotheyby's and buy quality art as it comes into the primary market though galleries and artists? I noticed a recent comment from art critic Jerry Saltz that parallels the positives in the message delivered by Sotheby's experts, but from a more grass-roots point of view. Saltz observes, "Now is a great time to be in the art world; chaos breeds art and life; artists don't have to open "big" anymore; small numbers are powerful again." The chaos of the financial markets has disrupted the status quo of the workings of established art markets and that creates opportunities.