A Sharp Downturn in the Art Market
We explore how a slowdown is affecting a rising generation of artists.
Amani Lewis with the painting “Galatians 6:2 — the carriers.”
I cover the worlds of art and money.
As art became a serious business over the last few decades, with record multimillion-dollar sales eclipsing one another, it seemed as though values could just rise in perpetuity. But this year has been a reality check.
High-end art sales have slumped. Sellers have withdrawn prominent works from major auctions at the last minute, for fear of jeopardizing artists’ markets. More than a dozen galleries have closed in Manhattan. Layoffs have begun to creep through the $65 billion industry, as one of its largest companies, Christie’s, saw revenue plunge. It took in $2.1 billion from auctions in the first six months of this year, down from $4.1 billion during the same period in 2022.
In today’s newsletter, I’ll explore some reasons the art business has slowed, and how it’s affecting a rising generation of artists.
The high point
Jaws dropped on a November evening in 2022, when collectors bought a record $1.5 billion worth of paintings in a single night at the Christie’s auction house. Buyers snapped up a parade of masterpieces by artists including Vincent van Gogh, Paul Cézanne and Gustav Klimt — all from the collection of the Microsoft co-founder Paul G. Allen.
That frenzied night seemed to forecast a booming future for an industry that had been getting hotter by the year. But it actually marked the peak of the market.
High interest rates and inflation bear some responsibility for the slowdown. Collectors who view artworks as financial assets have flinched at the rising costs of doing business and the diminished ability to get favorable loans to buy paintings they hope will appreciate in value. The supply of modern masterpieces has also decreased as potential sellers sit on their investments until economic conditions improve for the ultrawealthy.
Hesitation breeds uncertainty and doubt — dangerous emotions in an industry prone to mood swings. The more collectors fear a downturn, the more likely it becomes.
Allison Zuckerman’s “Woman With Her Pet.” Allison Zuckerman Studio and Kravets Wehby Gallery
A pipeline problem
You could be excused for thinking the art world was still flying high. A jet-set crowd of wealthy collectors and influencers has shuttled around the world this summer from Venetian palazzos to Swiss chalets, stopping to party in Tokyo before ending their grand tour in the mountains of Aspen, Colo., for an art fair where participants enjoyed cocktails at a home decorated with an Ed Ruscha painting of the Rocky Mountains that boldly exclaims, “IT’S RIDICULOUS.”
When you’ve been to enough of these fancy shindigs, you start to notice who’s missing: young artists.
Four months ago, I started compiling a list of promising artists who found market success early — many in their mid-20s and fresh out of graduate school. Collectors had purchased their still-wet paintings during the pandemic and flipped them for profit at auction months later. The pictures often sold for six or seven times their estimates at auction, fetching $150,000, $200,000 and sometimes more.
Decades ago, this kind of speculation could get a collector blacklisted in the art world. Artists and dealers wanted to create stable markets, steadily build careers and attract museums that would add their works to collections. But as the wealthy began to use paintings as investments, speculators flooded the market.
The market for young artists reached its peak in 2021, when collectors spent nearly $712 million on their works at auction. Last year, the market lost nearly a third of its value — and it continues to shrink. In the first half of this year, sales for this group dropped another 39 percent.
The calamitous fall
My colleague Julia Halperin and I spoke with a group of devastated younger artists. Powerless to stop these auctions, some watched in tears as the markets for their works declined. One painting, by the Ghanaian artist Emmanuel Taku, sold at auction in 2021 for $189,000. When it was put up for auction again earlier this year, its price plunged to just $10,160.
“You are buying a piece of my life — a little history of me and my people,” said the artist Amani Lewis, whose income fell by about 75 percent as the auction world’s failures rippled into studios and galleries, where artists make most of their sales.
Those who have experienced the churn hope it’s made them stronger. But they also remain frustrated by a system that treats paintings as commodities for speculation.