We have been slightly MIA with our blog posts, but really busy with clients IRL and observing the changes the art market has been undergoing since the beginning of the year...
Time to sum a few of those observations up, as the marquee May auctions in New York are over, and we have a short breather before the Art Basel 2024 takes place.
Market Correction Still Has Not Attained Price Equilibrium
2023 was the year art market saw prices starting to cool off since 2020, which has continued unabated into 2024, for a number of reasons. From the end of post-pandemic revenge buying and ultra contemporary artists' speculative bubble beginning to burst, to global conflicts, volatility and persistently high interest rates finally catching up with the art market. Notwithstanding the common dogma that the art market is not correlated with the stock market, it does correlate with the broader economic and geopolitical mood of the given time. And the mood right now is caution.
Cautious sellers prefer to hold off from selling their artworks, as they are waiting for the signs of the art market hitting rock bottom, meaning the next cycle is going to be upwards and they'll be able to sell on more favourable terms then.
Our prediction: the rock bottom will be in November, 2024. With the looming US Presidential election chaos, the big auction houses already admit that it is harder to secure consignments, because wary sellers fear the attention of the world would be on political rivalry amidst the most polarising election and potential instability.
After the inauguration in January, 2025, we hope the world would be a more stable and predictable place.
Cautious buyers, on other side, refuse to pay prices rooted in the exuberance of 2020, that the sellers forgot to readjust to the 2024 reality. Hence, a discrepancy that is at the core of the current art market conundrum. We have witnessed shallow, timid bidding on a number of lots at the New York auctions, indicating that the pool of potential buyers for high-value lots has diminished and guarantors were most likely the final buyers of those works, as the money got more expensive (high interest rates to blame) and the clientele more discerning (desiring only the very best of the series/by the artist).
While the lots in the middle market, between $100k to $3m, performed slightly better, due to the wider selection available in this segment and more leeway for negotiation possible.
Our advice: the auction houses have to lower the estimates even further to entice more bidding. The galleries need to bring their primary prices more in line with the auction results and obvious reality. The buyers with liquidity, however, have a great opportunity to acquire historical works for lower prices leveraging their standing in the current dire market conditions. Smart collectors were able to secure bargains by acting as guarantors at the auctions and/or not encountering much competition.
2. Female Renaissance
Beyond rediscovering overlooked historical artists and betting on promising mid-career artists for still reasonable prices, the major trend in the game is female artists.
The dominant trio of female artists, snatching all the money lately, has been Yayoi Kusama, Joan Mitchell and Georgia O'Keefe. But this May saw intense bidding wars for Surrealist Leonora Carrington's work Les Distractions de Dagobert, 1945, that sold for $28,485,000 against the estimated $12-18m at Sotheby's Modern Evening Auction. Lucy Bull's work, 16:10, from 2020, shot up to $1,814,500 versus $500k-700k estimates at The Now Evening Auction at Sotheby's, establishing the new auction price record for the artist.
On top of the recent record breaking sales and major museum solo exhibitions by female artists like Jade Fadojutimi, Julie Mehretu, Cecily Brown, etc., it is delightful to observe female artists gaining such momentum and well-deserved spotlight.
In conclusion, our main advice would be "Fear Not", as the market always goes in cycles: the current downward cycle means THE ONLY WAY FROM HERE IS UP! And even this down time could be spent wisely by making financially sound purchases, if you analyse the market correctly. For that purpose MERVEILLE Art Advisory is always just one click away to assist.
Yours truly,
MAA
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