Art: The Last-Chance Argument

I have little time, in general, for optimistic arguments saying that art will continue to do well as an asset class. But Marion Maneker has an interesting idea about why the upcoming fall sales might not be quite the disaster that many fear:

For passionate collectors, turning off the supply of great art is worse than the financial sector’s threat to their ability to pay for it. There’s much talk of serious collectors who had been sidelined by the free-for-all market being tempted back in with the dual prospect of once-in-a-generation buying opportunities and the promise that reckless money will be staying home.

High prices for art do have a way of pulling sellers out of the woodwork: it’s easy to say that you’ll never sell your Warhol, but it’s much harder to turn down $30 million for it. As a result, the big evening sales have been full of very good works in recent years, often consigned by people who didn’t need to sell.

There’s a good chance that for the foreseeable future, those discretionary sellers will be much less tempted to put their work up for auction. After all, they’ve all been contacted by the auction houses in the past, and if you said no to an auctioneer telling you that your painting could go for $30 million, it becomes incredibly easy to continue to say no when the top price mentioned is only $20 million.

From a buyers’ perspective, then, this month’s sales might well be the last with lots of very desirable works. Going forwards there will always be the estates of deceased collectors, and other forced sales. But now could be the last great smorgasbord of art for a while, and it might be irresistible to serious collectors with lots of cash. If such people still exist.

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