This time last year, the art market was clawing its way out of a deep, deep hole. In the first half of 2020, as the world shut down and commerce screeched to a halt, fine-art auction sales tumbled more than 50 percent, to $3.3 billion, the lowest total in over a decade. But just as the broader economy has experienced a V-shaped recovery, so too has the art market.

In the first half of 2021, fine-art auction sales rebounded to $7.8 billion, according to the latest figures published in the fall 2021 Artnet Intelligence Report. That’s a nearly 140 percent increase over last year—and almost 12 percent higher than for the equivalent period in 2019, our last “normal” year.

“Over the past six months, the strength of the art market has been a surprise to everyone,” said Doug Woodham, the managing partner of Art Fiduciary Advisors.

What, exactly, is driving this boom, and what do the contours of the market’s recovery tell us about where it’s headed? Read on for answers. And if you like what you read, be sure to download the full Intelligence Report, which offers an even more in-depth look at the factors shaping today’s art market.

© Artnet Price Database and Artnet Analytics 2021.

Let’s start with the top line numbers. How much have auction sales grown in the first half of 2020 compared to the first half of 2021?

Short answer: a lot. Longer answer: Almost 140 percent. A total of $7.8 billion worth of fine art was sold at auction in the first six months of 2021, compared to just $3.3 billion in the equivalent period in 2020, when many countries were still in the midst of lockdown. This year’s first half is also up 12 percent from the first half of 2019, long before most of us had ever heard the term “social distancing.”

People are buying art again, got it. Why, exactly, is this happening on such a large scale?

One explanation is economic: It’s common knowledge at this point that rich people got richer during the pandemic. (The top 1 percent of American households saw their wealth increase 23 percent between late 2019 and early 2021, according to a recent study from Oxford Economics; the bottom fifth saw only a 2.5 percent gain.) Now, continued recovery in equity markets and low interest rates are keeping the wealthy feeling flush—and fears of inflation are encouraging them to put money into tangible assets like art.

But the wealthy are spending money on all sorts of assets, from video games to baseball cards. Why is art specifically seeing this kind of post-pandemic recovery? 

It all comes down to supply and demand. As sellers become more bullish, they are more willing to offer higher-quality material; buyers, in turn, are more willing to pay bigger prices. (Exhibit A: The sale of the Macklowe collection, which was put on hold during the pandemic, will finally be offered at Sotheby’s in November.)

But the no-rules environment of the pandemic has also helped auction houses organize sales strategically on a rolling basis—and move more product than they have in years. A whopping 181,438 fine-art lots sold in the first half of 2021, more than we’ve seen in the same stretch of any calendar year since the art market’s last peak, in the mid-2010s.

People say the art market isn’t one market, but actually a group of smaller markets clustered under a single heading. Which of these smaller markets is enjoying the biggest rebound?

I could answer that question a number of ways: by regional market, by price point, or by genre. Let’s take it one at a time.

OK, start with region. 

China is clearly the most improved thanks to aggressive COVID measures that enabled its economy to restart with a bang, as well as eager spending by its rising class of young, moneyed collectors. In the first half of this year, the Asian nation generated $2.4 billion in fine-art sales at auction, up an eye-popping 399 percent from the equivalent period in 2020.

What about price point? 

From January through June 2021, the fine-art market delivered increased sales in every price bracket compared with the equivalent periods in 2019 and 2020—but particularly at the very top end. As buyers’ and sellers’ confidence returned, sales of works priced above $10 million rose nearly 30 percent over those in 2019, and more than 200 percent over those in 2020.

Now do genre.

Anyone who has witnessed the recent heated competition for works by artists such as Matthew Wong, Avery Singer, and Emily Mae Smith—especially in Hong Kong—would not be surprised to learn that the ultra-contemporary sector is the fastest growing in the auction market. (We define the category as work made by artists born after 1974.)

Notably, ultra-contemporary was not just the genre least affected by the lockdown, falling only 1.3 percent in the first half of 2020; it also rebounded the most dramatically.

From January through June of this year, sales in the category ratcheted up to $302.6 million—almost 300 percent above their most recent peak, in 2019. Remarkably, the size of the market for ultra-contemporary art now rivals that for Old Masters, which tallied $338.2 million worth of sales in the year’s first half. (For perspective: the former genre covers art made over the course of fewer than 50 years; the latter, more than six centuries.)

COVID case numbers are on the rise again, along with concerns about new variants. Are we concerned that we’re in for another art-market nosedive this winter?

Experts predict that the state of public health will be somewhat disconnected from the state of the economy moving forward. With vaccination rates still ascending (albeit slowly), fewer cancellations and shutdowns are expected. “That link between cases and activity is weaker now than it used to be,” said Benjamin Mandel, the head of portfolio strategy at Itau Asset Management.

The prevailing mood is optimistic. As Mandel said: “I have no doubt that rich people will continue buying art.”

Want more insight into the art market, from the five tech tools that are poised to shape the market’s next decade to profiles of the next generation of tastemaking collectors? Download the fall 2021 Intelligence Report here.