Whenever fireworks are set off, it takes a while for the smoke to dissipate. Despite the impressive first-day sales at Art Basel, comments from many sellers, buyers and consultants at the show underscored that market dynamics remain extremely complex. In fact, one of the few things that arts professionals across the spectrum seem to agree on is this: anyone who tells a simplistic story about the current state of trade is likely either misinformed or pushing an agenda.
“What is happening in the art market is difficult to describe and difficult to decipher,” said Dominique Lévy, co-founder of Lévy Gorvy Dayan. “The world has forgotten the word ‘nuance.’ From the art market to the stock market to the political situation, everything seems to be at one extreme or the other.
The art market is not monolithic, this is a self-evident truth in the industry. However, the impulse to accept a catastrophic narrative during an ongoing market correction shows that understanding this mantra and applying it are often two separate tasks – and the same is true when selective evidence of recovery begins to mount.
Mike Kelley’s 1979 painting states, “Things that are scarce are more precious.” Dryad (from Parasitic Lily) At the Vedovi booth David Owens
For example, the headlines surrounding Art Basel’s first preview day (including this publication) were dominated by reports of seven- and eight-figure sales by the most blue-chip dealers. But these large deals divert attention from the ongoing challenges facing sellers. On Tuesday afternoon, one international dealer described their situation, saying: “We’re doing OK, but it doesn’t feel good.” That sentiment sums up what reporters have heard from much of the industry over the past 18 months or so. In most cases.
The friction between facts and feelings is consistent with similar frictions in the wider economy since society as a whole recovers from the Covid-19 pandemic. This mentality is particularly strong in the United States, where some of the positive data-based indicators—rising real incomes, relatively low unemployment, narrowing inequality, markedly easing (if still stubborn) inflation, etc.—have proven irreversible. The widespread influx of money has negative attitudes toward work and living conditions.
Everyone else is struggling
While people acknowledge that they are looking for ways to get by, they often express a belief that others are struggling even more, with no relief in sight. Reporter Derek Thompson atlantic organization Call this mentality “Everything sucks, but I’m fine.” Many art trade professionals are going through something similar.
Part of the reason for this sentiment is that the effort required to continue selling art has changed dramatically in recent times, not just this week but for much of the past two years. “The sense of urgency that has long characterized the art market is definitely changing,” said Steve Henry, senior partner at Paula Cooper Gallery. “Everyone works extra hard.”
The story is much the same in the private secondary market. “Overall, this year’s Basel is no different from last year, or the year before that, or the year before that, really, until COVID-19 hit,” said London-based consultant Morgan Lang. “I hate the word ‘market correction,’ but this is That’s where we are now. There’s still a lot of private sales happening, and quite a few big deals still happening, but they’re all pieces that people have been looking for, the prices are reasonable, and the access is there.
The extra labor is even more noticeable than the easy profits for dealers and auction houses handling works by the most popular young artists in the post-Covid boom. While this segment of the trade receives significant attention, it represents only a small portion of the larger group of galleries selling work by emerging and mid-career artists.
There is a twofold consensus among this tier of dealers at Art Basel: first, the speculators who drove the purchases have now all but disappeared from the market; Secondly, this disappearance did little to no harm to their activities in selling the works of other young artists on the primary market. This has never been their business model, so it has nothing to do with their list or collectors. All of the above factors have led market observers to conclude that all supermarket deals are in trouble, following the public collapse of some young talents who had once achieved great auction results – most of whom were barely there during their rise to prominence. The conclusion that there is little or no institutional support – is wrong.
Trickle-down economics?
However, there is one way in which slowing sales of many market darlings may affect dealers who have never worked with them: a trickle-down effect on waiting lists. Sources say that in some cases, long-standing clients of modest-sized galleries have begun to obtain major works once in demand from larger galleries that, a year or two ago, had little incentive to offer them. But as higher-profile buyers reconsider the commitments they made in competing for the aphrodisiac in their bloodstreams, the remaining galleries holding inventory have made offers to less sought-after collectors — some of whom Profit by spending your money higher than other collectors.
This shift could ultimately hurt the mid-sized galleries that these collectors have been maintaining, but it’s unclear whether the scale of the spending shift is large enough to have an impact. During this time it became another new corridor in today’s trade maze.
Just as it is misleading to assume that all artists of a certain age or experience level are created equal, it is equally misleading to assume that all buyers prioritize what (or whether) to prioritize.
Levi warned that there is no such thing as a simple market. “I’ve been in this business for over 30 years and I don’t think two transactions are the same, I don’t think two collectors are the same, I don’t think two collections are the same, and I don’t say no two artists are the same. identical.
The diversity of opinions among the contemporary collector community makes it a difficult task to draw the comprehensive conclusions that observers want from sales activity at major shows. For example, the most investment-minded buyers now consider more economic factors than ever before, from regional interest rates and the currency strength of the home currency relative to the purchase price of the work, to historical price comparisons and relative liquidity if they want to move forward later. For a quick exit, you can purchase a work through resale or art financing.
But this is still only a subset of the collecting crowd, and their purchases tend to be skewed toward a select group of dealers who are well-versed in viewing transactions through the lens of investment optimization. Other groups of collectors, oriented toward other priorities, are less sensitive to increases in purchasing power that may result from interest rate cuts by central banks in their regions. “It’s not a common conversation,” Henry said of this example, adding another divide elsewhere in the industry: “What I call brand galleries has more brand-oriented clients. Our conversation It may be different from their conversation.
Nonetheless, from the primary market to the secondary market, from dealers to advisors to collectors, the final consensus is that the slowing pace of transactions has brought with it a glimmer of hope, namely deeper engagement, more thoughtful conversations, and, therefore, more thoughtful dialogue. Build stronger connections between both parties. Does this mean the extra effort this week could see trading peak again soon?
“People forget that markets are cyclical,” Henry said. “Most of the time, it’s hard. When things are easy, it’s unusual.
