Have we just seen the end of the 2000s art-market bubble?
Bloomberg recently published a two-part article series on the state of the art market in 2008. As their coverage of the year just ended shows, the tenor in the market changed as the spreading financial crisis hit rich art buyers, leading auction sales and prices for contemporary art to stall out.
Long-time readers of this blog know that we occassionally delve into the subject of art here, so let's turn to Bloomberg's coverage to learn more about the recent slump in this once-booming market.
Excerpt from part one of Bloomberg's series, "How Monet, Freud, Hirst records led art-market bubble to burst":
"Art prices extended a seven-year surge for much of 2008, with a Claude Monet painting of water lilies, Lucian Freud’s portrait of a civil servant called Sue and a Francis Bacon triptych setting records.
A 111.5 million pound ($162 million at current rates) sale of Damien Hirst works in September featured pickled unicorns, flying pigs and a golden calf with 18-carat hooves and horns.
From 2003 to 2007, worldwide auction sales of contemporary art grew more than eightfold, said the French-based database Artprice. The Hirst sale coincided with the collapse of Lehman Brothers Holdings Inc and the rise in auction prices then came to halt, said dealers.
“The mood has changed,” Anders Petterson, founder and managing director of the London-based art market research company ArtTactic, told Bloomberg in October. “The magnitude of the economic crisis is such that even the ultra-rich will have second thoughts about buying things.” "
A review of key dates and art market events in 2008 follows.
See also, part two of Bloomberg's article series, "Warhol, Hirst works languish as prices plummet at end of 2008".
Related articles and posts:
1. That booming art market (2006) - Finance Trends Matter.
2. Grantham and Faber on bubbles (2007) - Finance Trends Matter.
3. Marc Faber talks to Bloomberg (2007) - Finance Trends Matter.
4. Art market rout (November 2008) - FT.com
5. Art market rout persists (November 2008) - Bloomberg.