The new reality—the state of the art market in 2009 is not easy to predict

The new reality—the state of the art market in 2009 is not easy to predict

The Outlook for the 2009 Art Market is noy very good. A tremendous amount of money was lost in the Stock Market. People with Art Collections are selling with losses. Signals are reaching us from individual artist, galleries and dealers about a rapidly deteriorating Art market. The traditional fairs and exhibitions in the first month of 2009 until now have been underperforming.
From the financial point of view Art is a luxury. This could become the year of 'the shrinking Art market'.

(This article is an excerpt from The Art Newspaper, click on the link to read the whole article).
The general economy and also the art economy is clearly headed for some choppy waters…” This is what mega-dealer Larry Gagosian told his staff in a tough-talking, if ungrammatical, memo published last November in Flash Art, as the global financial meltdown continued to panic investors, the US recession was officially confirmed and unemployment figures for the country soared by 533,000 in that month alone.

In Miami, the trendy French dealer Emmanuel Perrotin has shuttered his gallery, and now will only reopen it for Art Basel Miami Beach next December. Sotheby’s is also trimming its workforce, and has announced it has abandoned guarantees for the foreseeable future. The firm, and its arch-rival Christie’s, were badly hit by the collapse in art prices during New York’s sales of impressionist, modern and contemporary art in November, which garnered only half the expected totals. Those sales were prepared before the autumn, when art prices were still riding high. Some works sold in November for half their low estimates, and up to 75% of the works in some sales were bought in.
Today a different reality prevails. The lacklustre 2008 autumn fairs, Frieze and Art Basel Miami Beach, saw dealers prepared to be flexible on prices, accepting discounts of up to 30%. But, as journalist, sociologist and lecturer (and The Art Newspaper contributor) András Szántó points out: “Just as designer brands are now being offered at huge discounts in the high street—were those shoes or handbags really worth the previous prices?—so those [pre-financial meltdown] prices should never have been so huge. Some dealers priced art so aggressively, and the prices went up with such velocity, that it is inevitable that they should fall back sharply.”
These prices rose with the greatest speed for contemporary art. But the picture of the art market, as 2009 opens, is far from simple. It is always worth remembering that the market is not a single block, but a whole series of sub-sections.