After carefully observing Day and Evening auctions at Sotheby's, Christie's and Phillips in New York this May, one key fact was obvious - the art market is not immune to changes in the macroeconomic climate. It is vital to look closely which economic indicators are more determinative, than others.
Stock market does not correlate with art sales: in November, 2022, when Paul G. Allen Collection was sold at Christie's for record-breaking $1.5 billion, the stocks were 5% lower than today. However, higher interest rates, not seen for almost twenty years, have direct impact on liquidity, as cost of capital becomes higher, and, coupled with uncertain future of global economy, have resulted in modest less speculative bidding and cautious behavior of buyers. 'Evening auction sales dropped 41.7% from Spring 2022 and 46.9% from November 2022', (ArtTactic).
On one hand, many collectors and investors are holding off from offering their artworks for sale during these uncertain times, wary of the potentially unsatisfactory ROI. The buyers, on the other hand, are taking fewer risks and gravitating towards established names with proven track record. Even the works by such blue-chip artists, as Pablo Picasso, Paul Cezanne and Jackson Pollock, were among the bought-in lots, signaling that it is no longer sufficient to be just a top name, the work has to be a prime example of the artist's oevre to be worth the investment.
The most fierce bidding at the auctions was happening among the lots with low estimates in five-six figures, while the top-end of the market (with few exceptions) saw continuous bidding only up until the low estimates. However, it is worth noting that buyers aren't abandoning the playing field altogether. Rather, they are using their leverage against the sellers in the given economic climate by offering lower prices. It was a great opportunity for serious collectors with liquidity.
Top 3 Sold Lots
Gustav Klimt, Insel im Attersee, 1901-1902. Sold at Sotheby's. Price realized: $53,188,500 (all final prices listed include BP).
2. Henri Rousseau, Les Flamants, 1910. Sold at Christie's. Price realized $43,535,000.
3. Rene Magritte, L'Empire des Lumieres, 1951. Sold at Sotheby's. Price realized $42,273,000.
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