The outlook for pricing varies considerably by the artist and the quality of the work being sold. Above, I share my perspective on how much sale prices are likely to fall this year relative to what it would have cost to buy a similar work before the COVID-19 crisis.
For example, artists who regularly appear at auction tend to be the best known and most widely collected. When a masterwork becomes available for sale, either privately or at auction, collectors are often willing to “stretch” for what they may deem a once-in-a-decade opportunity. Their willingness to stretch is unlikely to be deterred by a steep recession, which is why the price they would pay this year is likely to be the same as if they bought it in 2019.
But a good work by the same artist will elicit a different response. The absence of so many buyers from the market means the seller will have to agree to a discount. Because the artist is well known, the size of the discount is bounded on the bottom by speculative buyers willing to commit capital in the hopes of flipping the work later. Artworks in this category are likely to sell for 10–25 percent less than what they would have gone for last year. As for minor works by these artists, because speculators don’t chase them, nor do seasoned collectors, sellers will have to agree to even greater discounts to get a deal done.
Artists further down the matrix tend to have fewer collectors who are aware of or interested in their work. There are also fewer, if any, speculators willing to commit capital to these types of artists now. As a result, galleries will need to entice buyers with substantial discounts, relative to the first tier of artists, if they hope to get deals done.