The Art Market is Shrinking

A man wanders an empty art gallery.

Image: Shutterstock

Last year, sales at Sotheby’s and Christie’s were booming: combined, the two auction houses brought in over a billion dollars. This year, the two have only raised a total of $560.6 million, a far cry from where they stood last May. And the $78.1 million raised by Christie’s pales in comparison to the $705.9 million raked in from a major event last year, the “Looking Forward to Tomorrow” sale. These numbers still seem high because they’re in the millions, but stunted revenue is an indication that the art market is cooling down.

Part of the reason the market isn’t quite as spicy as it was last year is in part the fault of social media. The nature of the game has shifted to one that values ecommerce and easy access. While that means the art market is more seamless, as millennials prefer, millennials are more difficult to get to buy things. Young people do view art as a good investment, but they typically have less money than older generations. However, the art market’s slowing down is not likely to be permanent—it may just be making the shift to an ecommerce business model.

Buyers themselves might just be more choosy, bidding low and shelling out less. “Buyers are just a lot more selective,” says Judith Selkowitz, an art advisor.

“The market has definitely shrunk,” says Wendy Cromwell, another New York-based art advisor. “But that isn’t a result of sellers not wanting to sell in an uncertain market, but a lack of spectacular guarantees. There’s a cause and effect.”

Ecommerce certainly does lead to uncertainty and a market that’s more difficult to control. But that’s not all bad news. Earlier this month, Christie’s sold a Jean-Michel Basquiat painting for $57.3 million, a high number for that artist. Sotheby’s has seen some good numbers as well, which is good and unexpected news—they were recently acquired by the Art Agency Partners, a New York art firm.

Still, the absence of a “Picasso or Modigliani” at Sotheby’s “Imps and Mods” sale meant lower-than-expected revenue for a “once-dominant category that brought in a combined $268 million, half of what the [auction] houses raised last May.”

These kinds of ups and downs aren’t uncommon for the art industry. It saw record highs in 2014 and a few lows in 2015, with an increase in online sales. Currently, about 32% of buyers purchase art from a tablet or cell phone—a pretty incredible statistic, given that mobile commerce has only been around for a few years.

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