Middle Market Galleries

The Art Newspaper published a very interesting article on the difficulty middle market galleries are having.  Part of the problem is the widening gap between the very wealthy and other middle and upper middle income individuals.  The previous middle class of collectors, mostly professionals such as attorneys and doctors are not collecting as they have in the past.

The Art Newspaper reports

Rising costs and stalling wages for the 99% have led to “an erosion of the more traditional collector base of upper-middle-class professionals who come from academic, medical or accounting backgrounds. They’ve been trumped by a new collecting class from emerging economies, which has proved very capable of dominating and mis-shaping the market,” says Gregor Muir, the executive director of London’s Institute of Contemporary Arts. Another group on the wane is “the hedge-fund group that was spending $150,000 to $200,000 on a painting in 2007. They all got fired, so they’re not buying,” one prominent New York collector says.

Even at auction, where the mid-level day sales sat well alongside the “masterpiece” market this season, the gap between the average prices at the top and in the middle has widened considerably over the past five years.

Part of the problem is that the sector is difficult to define. In terms of material, it could refer to works by mid-career artists or to lesser works by established artists. Price levels are also tricky to ascertain. The Art Newspaper surveyed more than 40 art professionals and found consensus on a range of $30,000 to $500,000. But “there are many middles of the market”, the art adviser Allan Schwartzman says. “At some price levels, it can be $40,000 to $60,000; at others, around $150,000 to $350,000; and at others, in the $2.5m to $5m [range]. There are many plateaus or stall points in the market.” (For some, the sums are higher still. “I’m seeing the middle of the market moving up. Is a $10m, $20m picture considered mid-range now?” asked Larry Gagosian in an interview with the Wall Street Journal last year, demonstrating how big the gap is becoming.)

Source: The Art Newspaper