American Art – The Malaise Continues (Fall 2011)

Are new factors at play?

American Paintings have traditionally led the art market out of downturns, but not this time. Since the pullback in late 2008, the American market has yet to see any sign of recovery. Why? What is different now?

There are essentially two schools of thought as to why the American market has lagged almost all other sectors so dramatically. One side notes the lack of demographic diversity in the collector base (90% or more of which are Americans over the age of 40). This uniformity coupled with a dearth of interest amongst global players is not an issue in other sectors such as Contemporary, where the following of artists such as Bacon, Murakami and Ruscha is quite heterogeneous. The other side feels that the resident economic and political uncertainty in the US has led American collectors to put the brakes on buying. Many are already broadly exposed to the US market and need to maintain as much liquidity as possible until greater stability and political clarity emerge.

Artvest believes that these two schools of thought are not mutually exclusive, and we are not surprised that a recovery has yet to come. This malaise continued to be evident in the spring season sales at both Christie’s and Sotheby’s.

Eric P. Widing, Department Head of American Art at Christie’s, acknowledges that the market is slower to recover this time around. “There are concerns. One is the current sell-through rates which are low and that is troubling. We want to get back to the historical range of 80 – 85%…There seems to be a crisis of confidence among American buyers and specifically at present there seems to be tremendous concern based on political risk.” He went on to discuss the opportunities that are available at the high-end of the American market, pointing out that “Collectors can purchase iconic American Art in the US $1 – 5 million range while those types of opportunities are rare in the Impressionist & Modern or Post-War & Contemporary categories. We look like a bargain.”

market analysis – F2011-Chart 9

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