A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
The key May art sales at major auction houses are expected to be down from last year, as wealthy buyers and sellers take a breather from the frenzied prices of 2021 and 2022.
Art auction sales at Christie’s, Sotheby’s and Phillips over the next two weeks are expected to total $1.2 billion, down 18% from a year ago and nearly half the total for the May 2022 sales, according to ArtTactic.
It extends a recent decline for the art market from its post-Covid peak, when cheap money, a booming stock market and fiscal stimulus saw record sales. Last year, global auctions of fine art fell 27% from 2022 — the art market’s first contraction since the start of the pandemic in 2020 — and the average price dropped 32%, marking the biggest decline in seven years, according to ArtTactic.
During the first quarter of this year, sales in the contemporary and postwar category — the big money maker and growth driver for the art market in recent years — plunged 48%, according to ArtTactic.
The auction houses say demand from buyers remains strong. The problem, they say, is supply, as collectors hold back on selling their trophies for a better market environment. This spring, there are also no big single-owner collections up for sale, like the Macklowe Collection or Paul Allen Collections that helped power sales in previous years.
“We’re seeing what people perceive as a smaller offering this season,” said Brooke Lampley, global chairman and head of global fine art at Sotheby’s. “The proof is in the pudding. It’s the buyers showing up and what the work will sell for that will define our perception of the art market right now. And I expect the results to be strong.”
Christie’s sold a Mark Rothko painting to hedge fund billionaire Ken Griffin earlier this year for more than $100 million, CNBC previously reported. Collectors say selling a trophy work privately carries less risk of a failed auction, which can damage a work’s value.
“With private markets, you can be very targeted in terms of who you’re approaching, what type of buyer you’re approaching,” said Drew Watston, head of art services at Bank of America. “You can be very targeted about the price that you’re going out and asking for in the market. There’s great discretion so you can kind of go out into the market and test a price and adjust depending on the feedback that you get.”
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