Art vs. Economy
By Barbara Guggenheim
SINCE LAST FALL’S MARKET CRASH, I’ve been swamped with calls from art collectors seeking advice. Buy? Sell? Hold? And more than once I’ve heard, “If only I’d bought the painting you offered me last summer, I’d have lost less in the market and I’d have something beautiful to look at.”
The art world isn’t immune to the plunging economy, but a seller’s market has turned into a buyer’s market, and savvy collectors are seeing this as a period of opportunity.
The big change for collectors is how art is being sold. For years, auction houses had a lock on the market because they offered sellers high guarantees (the sum promised, whether or not the work sells). Last year, guarantees cost the houses millions, so they’ve cut back on their offers significantly. If a seller can’t get a guarantee from an auction house and doesn’t want to risk the piece being branded a turkey if it fails to sell altogether, he’ll turn to a dealer instead.
In the past, buying from galleries was just as hard as dealing with the auctions. Your chances of walking into a contemporary art gallery and getting something from a hot artist were nil. Waiting lists were a kiss-off. Now, with many buyers sidelined, you’re more likely to get what you want for less, but you must choose carefully. Today’s hot artists may crater with the financial market and never come back.
To sum up, it’s a buyer’s nirvana out there, so take advantage. Most great, once-in-a-lifetime works continue to command premium prices, but expectations have been lowered across the board. Panic and highly motivated sellers present unique opportunities. Invest selectively, and you and your collection will prosper.
illustration by Anthony Arias