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From alternative investment funds specializing in fine art, to corporations, to individual collectors around the country using the web to access gallery inventories and auction house catalogues, more people are buying contemporary art now than at any point in the past 15 years. This increased demand has significant market impact. Established galleries are selling out shows of mediocre work by well-known artists. Many of these middling pieces are flipped on the secondary market within two years, setting auction records. Prices are unsustainably high at the top end of the market right now.
Current levels of demand have implications lower on the food chain as well. Because non-established collectors are unable to get truly innovative work, they chase novelty. To meet this demand, smaller galleries snatch students from MFA and BFA programs and give them solo shows before they complete their degrees. Emerging artists today have more market opportunity than ever.
Art fairs have played a role too, as they have become a movable feast for celebrating collectors and their dealers. When listening to WPS1 Art Radio’s dispatches from Art Basel Miami Beach last fall, I was struck by the similarities to what I heard at stock investor conferences in the late '90s: the enthusiasm and excitement, the self-congratulatory tone, the continual talk about the market’s strength, the absence of any acknowledgement of a potential for downside correction. [...]
When the market starts to cool, we’ll see several changes. Newer, smaller dealers will face cash flow challenges and will close their doors. Larger dealers who represent established artists will cut back. They’ll present more conservative and saleable work while they pay their bills through profits generated from private back-room deals. If these predictions come true, emerging artists will need to rethink how they bring their work to market and manage their careers.
- Todd Gibson , "What Happens When the Bubble Bursts?" nyfa current may 5, 2005
posted May 06, 2005 in art, print. 20022001