The Art Market - Some Good News, Neutral News and Bad News

I did not post yesterday as I was finishing up with getting my new desktop computer set up. Between the installing the programs, the hardware and getting all of my data transferred, I was tired of looking at computers. But the change needed to be done, and I am so far pleased with the results. Now for some news.

Perhaps I should have named this post The Good, The Bad, and The Ugly. Christopher Michaud writing for Reuters and published in the Washington post states the art market, after taking some significant hits is ready for a rebound. He quotes some experts expecting art prices to climb by as much as 40% over the next couple of years.

So that is the good news, but it relates only to the top end of the market. The last sentence quickly sums up the lower end and the middle market. It states in effect, expectations for the lower end art market is rather neutral for the next two years and with the middle market seeing a further drop by nearly 20%.

We have seen very strong prices recently at the upper market levels, but there has not been much news of the middle and lower end sectors as it is not as exciting to many.  But as we have seen the upper sectors continue to add momentum, the middle is still way off. What is needed is a little bit of the trickle down effect. At the moment not many can middle market collectors can  afford to purchase or are concerned about purchasing due to the economy. With many in the middle markets struggling in a still poor economy with high unemployment, it appears it might take a while for the middle to bounce back.

Michaud states

In the art world, solid results boost confidence, encouraging owners of top-quality works to re-enter the market. The availability of rare or fresh-to-the-market pieces stokes bidding, which drives up prices, and a cycle is born.

Conversely, when sellers hold back, mid-range, often second-rate works tend to flood the market, drawing scant interest and tepid bidding -- if any. The result was the alarming drop-off in 2008 and 2009.

But as far back as December, Wedbush Securities upgraded Sotheby's, whose shares had been taking a beating, to outperform from neutral, citing a rebound in demand for collectible art. Sotheby's exceeded analysts' expectations with a 31 percent increase in fourth-quarter revenue.

Optimism seems well-founded with prestigious, world-renowned and hugely valuable collections hitting the block in New York in May.

"You're going to see some great prices in New York," said Philip Hoffman, founder and chief executive officer of The Fine Art Group Fund, an art investment house.

"The rare pieces are going to go through the roof and make prices that you wouldn't expect to see in the economic climate we're in," he told Reuters in a telephone interview.

To read the full article, click HERE.