Art Market Still Strong – artmarketblog.com
Newsflash: The art market is not cooling, slowing, correcting, busting, bursting, sinking, dying, convulsing, tanking, melting, freezing, crashing, dipping, slumping, softening, flopping, straining, cracking, collapsing or any other choice terms chosen by the media to represent what they have incorrectly identified as a reduction in the value of fine art. As far as I am concerned an art market correction would be defined as a significant reduction in the frequency of sales and a significant reduction in the prices being paid for works of art even though there was still plenty of money available to be spent on art at all price points. Because the current economic crisis has affected virtually all the different investment markets I do not think that an art market correction can be called at this point in time.
If an art market correction was taking place I would expect the whole market at all levels to be affected but the top end of the market is still going strong which would suggest that if we were not currently experiencing an economic crisis that has reduced the amount of money people have to spend and reduced the likelihood that people will be investing money in anything at the current time that the bull run would be continuing across all sectors and price points of the art market. In my opinion what is currently occurring is an adaptation to the current economic conditions the result of which will be a period of contextualisation and evaluation characterised by caution and discrimination. I have no reason to doubt that people would continue to pay increasing amounts of money for works of art at all price levels if the money was available and if we were not in the midst of a global economic crisis so until I see widespread proof that this is not the case I cannot agree with those of the opinion that the art market is currently experiencing a correction. In reality, the state of the art market cannot be truly determined until the current economic and financial market crisis are over and because only then will people’s true opinion of the prices being paid for art can be determined.
People may not be able or willing to pay as much for art while the economic crisis continues but this does not really reflect the true value of the works of art in question. It is important to view the value of an artwork and the price people are able to pay as two different things. The value of the work is what people would pay if they had the money and the price of an artwork is the dollar amount people would pay at the current time. I am sure that some people having read this post will be thinking: but isn’t the value of an artwork determined by the price people are willing to pay at the time which in turn is determined by the amount of money available for those people to spend? My answer to this question would be yes, to some extent, but the value of an artwork can still be higher or lower at the time of purchase than the price someone paid for the work at that time. Consider the following scenario: Even though there may not be anyone who is willing to pay $100 million for Jackson Pollock’s “Blue Poles” at the current time the current value of the work is still $100 million however if the work was put on the market during a time when the art market was in the middle of a bull run and confidence in the market was high and the most someone was willing to pay was $80 million then there would be reason to re-assess the value of the work.
The fact that the top quality quality, most desirable works of art are being increasingly viewed as a hedge against the volatility of other markets such as the stock market is proof that there is still plenty of vitality left in the art market. The media will of course continue to exaggerate and speculate in an effort to attract as many readers as possible. Until the wider population realise that the art market is not like other markets and cannot be treated like other markets or compared to other markets there will continue to be misunderstanding and misapprehension in relation to the health and status of the art market.
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.