Sunday, July 14, 2013

Is the Art Market Due for a Correction?

Is the art market experiencing a new boom, or is it all just another bubble destined to burst? With artists seemingly setting benchmarks at auction on a monthly basis and prices at fairs for pedestrian artworks pushing into the millions of dollars, there are fears in the art world of another crash. Privately, some people are talking about a steep market correction—as much as 60 to 80 percent in the contemporary art sector.

It is understandable why there is such skepticism about the current bull market for art and collectibles. Twice in the past decade we’ve seen the inflation of asset values in the art market followed by their inevitable, painful deflation. The parallels and analogies to today’s market situation are clear and worrying. But at the same time, there are significant differences that are worth taking a minute to review... more