These Are the Worries Haunting a Post-‘Babylonian’ Art Market in 2024

Behind the scenes, there's a recalibration of values going on.

The crowd at the annual White Cube party during Art Basel Miami Beach, 2023. Photo by Annie Armstrong.

Happy New Year, reader! The first column of 2024 finds some of you on the beach, others packing up to get your kids ready for school. Some are cementing deals which started in late 2023 and others are looking to drum up new business. Some of you are preparing for or have just completed expansions in an environment of higher interest rates and lower sales.

To all of you, I wish good luck!

Because luck is what we all need in this period of rentrée—from holidays to reality, from herd mentality to selectivity, from bloat to sobriety. It’s a fragile moment.

This is a moment when predictions abound. And, predictably, some of these tend to be self-serving, verging on spin. Take Marc Glimcher, president of Pace gallery, which plans to open a new branch in Tokyo this spring. In Art News, he anticipates “the continued resurgence of Japan as a global art world hotspot.” Or take any number of art advisers, whose reflex is to position a market contraction as a “buying opportunity.”

Behind the scenes, however, many market players find themselves anxious and confused. There’s a growing fear about gallery closings and collectors dumping art. Younger dealers, who’ve never lived through a market hiccup, lament the drop in Instagram sales. Investors bristle at unsatisfactory returns on art assets.

“History will look back at this time and be like, ‘That was so Babylonian. Those people were so self-indulgent, and it was all so frivolous,’” said Natalia Sacasa, senior director of Fleiss-Vallois, a Paris gallery that opened a New York branch last year.

“I don’t want to be doom and gloom, but I don’t think that the kind of money we’ve been dancing around with will come back,” she added. “Everybody needs to be more considerate and modest—and really examine what’s valuable.”

The question of value (and values) is key for many collectors, who are trying to offload the works they bought very recently.

“There’s been a lot of buying, and people have some regrets about things they spent money on,” said London-based art adviser Morgan Long.

Some sales are related to the ongoing war in the Middle East and collectors’ fury at the Artforum letter, signed by thousands of artists. Others have more purely market-driven concerns. In both scenarios, collectors are considering selling even at a loss, dealers and advisers said.

At the most basic level, it all boils down to supply and demand.

“There’s a complete oversupply on the primary and secondary market,” said Sacasa. “Supply has increased with the perception of increased demand. But now that the demand has been met, supply is overwhelming the buying population.”

There’s also a sense that buyers just awakened from a fever dream.

“People bought really intensely the past three-four years,” said the owner of a bicoastal, emerging-art gallery. “And some collectors are saying, ‘What did I just do?’”

As they contemplate selling, collectors encounter a market that’s gone illiquid seemingly overnight.

One vulnerable segment is early- and mid-career artists, “who’ve been launched but not taken off,” said the owner of a mid-size gallery in New York and Los Angeles. These artists have had a couple of successful solo exhibitions, but haven’t been scooped up by mega galleries.

“Collectors expect that artists start at smaller galleries and go to bigger and bigger galleries,” said the dealer, whose artist had been poached by a mega gallery. “When this doesn’t happen by their third or fourth show, there’s a sense that something is wrong. But big galleries only want artists who can scale up and meet their demands. Collectors should calm down.”

The speculative market has dried up as many new buyers who had rushed into the art market during the pandemic vanished. 

“Anybody who’s been speculating and has stuff they thought they were going to be making some money on might have a few surprises,” Long said. “Especially right now. It’s expensive to get money. Art is no longer an easy place to park your cash.”

The outsize returns once promised to art flippers are hard to nail. “It’s not like buying a Lucy Bull for three grand and selling it for $3 million three months later,” said another bi-coast gallery owner.

There’s also a deadlock between the expectations of buyers and sellers, art adviser Todd Levin told Artnet News this week.

A 2023 Nicolas Party painting that initially sold for $750,000 quickly returned to the market at more than $3 million, according to a person who was offered the work—but the market didn’t take the bait. “You’ve got to be a complete chump to do it,” the person said. (Party’s auction record is $6.8 million and he’s represented by the international powerhouse Hauser & Wirth.)

I also heard a story about artist Hayley Barker, whose intricate oil-on-linen paintings of flowers and plants have become hits with collectors in the past two years, leading to a recent upsurge in primary market prices (current range is $15,000 to $125,000).

Barker’s 2022 painting BOZO Front Yard (2022) was sold for $45,000 in August 2022 during her solo exhibition at BOZOMAG gallery in Los Angeles. All the works in that show came with a 5-year non-resale agreement. Yet this painting was offered for resale by the gallery at $375,000 just a year later, according to a person familiar with the offer.

Presumably there were no takers at that level, because the canvas appeared at Sotheby’s day auction on November 16. It ended up fetching $177,800, including fees, according to Artnet Price Database. 

“There’s a sense of urgency to deaccession and concern for the future of the market,” said the owner of a mid-size gallery. One of his seasoned clients uses art as an investment vehicle. The buyer in question is strategic about what he buys and most of the works have gone up in value. But he’s made some mistakes, and is now razor-focused on the 10 to 20 artworks that he’s not going to make any money from, the dealer said.

The main thing on his mind? How to get rid of them. His main fear? That they are going to be worthless.

Still the allure of access to new works by hot artists remains strong.

“It’s like a flex,” said a London-based collector. “It makes [collectors] feel they’ve done something great, they passed some sort of threshold. As if somehow spending the money is a success.”

Buying “investment-grade” art is the focus of many collectors now. People will line up all day to buy a Cecily Brown from Paula Cooper for $1 million, a mid-size gallery owner said. They will also pay $4 million at auction for her work. (The artist’s current auction record stands at $6.8 million.)

What does work, then? Long said her clients are looking for either “important pictures that don’t roll around that often or lower-end things because they really love them.”

Some of the top collectors in the world are still looking for the best of the best and are prepared to shell out millions for those prizesas the recent record sales of Agnes Martin and Richard Diebenkorn showed.

“They are happy to spend above $100 million,” said an adviser to several top collectors. “They are very specific and very selective. And they ideally want to do it privately.”

Auction houses will be looking for trophies to sell. In February, Christie’s is planning to auction off the contents of Sir Elton John’s Atlanta penthouse, with thousands of objects ranging from his robes and shoes to furniture and photographs, according to a person familiar with the sale.  

But many top clients are “a little bored” with acquiring art these days, and maybe even finding more excitement in other arenas of spending, Sacasa said.

“With the collector at this level of buying, the chase is as exciting as the catch,” said Sacasa, who was a director at Luhring Augustine gallery and worked with Christopher Wool when his prices were going through the roof. “Now these collectors are being chased. And they are being chased by everyone.” 

A case in point: Andre Sakhai, who’s been actively buying, selling, and gifting art over the past decade, is taking a breather from his art-market escapades to focus on a new interest: Miami’s food scene.

“Definitely been more into food recently, for sure,” Sakhai said in a text message, responding to my query. “Signed leases in Covid and now just living through the passion. I still like art—don’t get me wrong—but don’t find art so exciting now.”

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