The Art Market

by Asher B. Edelman

Yes, this time there is an art market! As an observer of art and markets for the last fifty years, I have noticed a profound change. FOR THE FIRST TIME I SEE AN ART MARKET! What does this seemingly redundant statement mean?

In the past when markets (stocks, bonds, commodities, real estate) stumbled there was simply a halt in the transactions of art. Stock market down 20%–Art market ?? Bond Market down 10% art market ?? Real estate down 40 % Art Market ?? Definitive downward movements in other markets were simply the lights in the eyes of the deer on the side of the road when it came to art. Was there fear? Yes! Was there a wish to liquefy? Yes! What there hubris? Yes! The owner of art believed that he or she was entitled to the last and highest price at which a similar piece of art had transacted. It took months-perhaps years-and great pain for the owner’s capitulation and a sale at a real price relative to the economics of other markets. More sales took place at the lowest price point than on the way down. In fact, the way down was defined by inactivity. What now?

If one were to pick a number today as to what most markets (stocks, bonds, commodities, real estate) are down from recent highs, one might estimate about 30 %. Guess what? This time the art market is discernibly down and transacting at about a 30% discount from its recent highs. The response has been timely and on point. It will continue to reflect economic realities rather than unrealistic wishes.


The Art Market has become a market because of the extraordinarily broadened international interest in art as taste and as money during the last ten years. Today it is as or more interesting (that is to say the owner is as or more interesting) to own and display art than to have a Mc Mansion or a Bentley.

Art is also seen as a store of value. It has become better understood that in times of recession, depression or periods of wild inflation, great art will retain some value. That can not be said for companies’ shares, bonds, real estate or most commodities. That does not mean that the newly found Art Market will fare better or worse on the way down (it will probably be in line with the rest) but it does mean that with quality art the owner will have something of value even at the bottom of the market which will rebound as the economic climate improves.

What does this all mean to you and me? It means that, for the first time in history, as I know it, there are straight forward economic choices to be made by both sellers and buyers-a more definable and more active market than ever before in a time of economic decline.


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