Art Market

Why Certain Artists’ Markets Can Weather a Recession While Others’ Flop

Andrea Danese
Oct 11, 2018 9:37PM

Andy Warhol, 200 One Dollar Bills, 1962. Courtesy of Sotheby’s.

In the 10 years since the Great Recession, the global financial system has largely rebounded intact, as has the overall art market. Alongside more bank disclosure, the art market has also seen collectors and their intermediaries proactively foster greater transparency in what has traditionally been an opaque milieu.

With financial markets once again reaching frothy new highs, it’s worth pausing to look back at how art performed in the intervening years.

Artists who fall in the post-war and contemporary category saw a 69% decline in total sales volume between 2008 and 2009. In 2009, volume fell to $630 million from $2 billion in 2008, before rebounding to $1.5 billion in 2010. Since then, they have more than recovered, and in 2012, they surpassed their pre-recession highs. (These analyses use hammer prices from the three major auction houses for paintings, sculptures, and works of paper that sold for over $100,000, drawn from a proprietary database with more than 600,000 records collected over 12 years.)


Impressionist and modern artists’ sales volume, as well as lots consigned, followed a similar pattern as their contemporary counterparts, but both the decline during the recession and the subsequent recovery were less abrupt. Total sales volume fell 45% between 2008 and 2009 to $1 billion, from approximately $1.8 billion, and then returned to 2008 levels in 2010.

Across all sectors of the market, the drop in sales volume can be linked to many factors, ranging from a lower number of lots consigned (itself driven by the absence of guarantees offered to sellers post-fall 2008) to the higher percentage of lots not selling or being hammered below the low estimate. Collectors, scared by falling prices, sought to keep their art and wait for the market to recover, while those who needed to sell were struggling to decide whether to lower expectations around auction estimates or turn to the private market. As a result, in the second half of 2008, across the spectrum of low- to high-valued lots, prices dropped below a 1.0 hammer ratio (hammer price compared to low estimate). As estimates began to more accurately reflect the global economic climate, hammer ratio returned to more traditional levels.

Both sectors, faced with normal market conditions, appreciated to prior levels—but both also underperformed at the onset of the recession. And although post-war and contemporary took longer to recover in the aftermath of a recession, by end of 2010, it had overcome the rest of the market and asserted its dominance.

Examining the data of top artists

Our data reveals that the value of even some extremely well-known artists’ work can be adversely affected by market vicissitudes, and that the exact time when a collector decides to go to auction can have a major impact on price performance.

During the long four sales seasons from fall 2008 to spring 2010, most of the Russian oligarchs and newbie hedge fund managers vanished, leaving the stage to established collectors who were more discerning, and who used this time as an opportunity to acquire artists not already in their collections. Those included Andy Warhol, Pablo Picasso, Alexander Calder, Gerhard Richter, and many other artists who continue to enjoy top-ranking positions these days. Hot and trendy living artists like Damien Hirst or Takashi Murakami were more susceptible to the crash, as collectors turned their attention towards more mature and established artists like Richter or Jasper Johns.

Our analysis suggests that high-demand artists who fall within the top 10 of their category recover to pre-recession performance levels relatively quickly when compared to their lower-ranked counterparts. However, the performance of the artists who are most in-demand tends to be the most adversely affected by large economic events, though they are also quick to rebound. Warhol and Richter are perfect examples.

Andy Warhol, Gerhard Richter, and Alexander Calder

During the fall of 2008, at the onset of the crisis, sales for Warhol’s works took a big hit, with more than 50% of the lots going unsold that season.

Interestingly, the lots that suffered the least were those priced in the $1 million to $5 million range (bought-in rate 19%), while those below $500,000 were impacted the most (bought-in rate 57%). Sales volume, however, was somewhat difficult to interpret, since many consignors benefited from hefty guarantees negotiated over the summer. In the following year, not a single artwork went to auction with an estimate above $10 million, and the number of lots consigned with an estimate between $1 million and $10 million went down by 70% from the previous year. Consequently, sales volume suffered, but the bought-in rate reverted toward historical ranges. On November 11, 2009, after the S&P closed at a 13-month high, Warhol’s 1962 painting 200 One Dollar Bills fetched $43.8 million at Sotheby’s, becoming the most expensive contemporary work sold at auction in 2009, and marking a turning point for the global art market.

Similar to what happened to Warhol, Richter’s market in late 2008 reflected the overall trend with more than 55% of the lots going unsold. The following year, his market experienced a contraction in number of lots consigned, particularly in price buckets above $1 million, and while bought-in rate was negligible, the hammer ratio remained below historical average. Yet by the fall of 2010, price levels and volume of lots transacted were back to pre-crisis levels.

Then again, it is important to note that not all artists’ work suffered during the recession. Broad economic events do color the art market, but they do not control the fate of every artist’s work. Alexander Calder is one such example.

Throughout 2008 and 2009, Calder performed better than expected at auction, attracting interest from seasoned and younger collectors. A fairly stable number of lots consigned over the worst 18 months of the recession attracted successful bidding, with minimum bought-in rates and hammer prices often above low estimates. A strong hammer ratio, coupled with at least 50% of lots sold above high estimate, made Calder one of the best performers during the crisis.


A brief review of our market analytics shows that major economic events quickly ripple through the art world and depress performance. All collections are impacted by these events. However, some specific artists and types of art are quicker to recover than others.

The analysis points to some rather obvious narratives. First, collectors should avoid parting with any artworks at the onset of a recession, particularly if they are in possession of blue-chip works by artists in their collection. On the other hand, if in need of liquidity, consigning a quality artwork from the right blue-chip artist or work will almost certainly lead to a completed transaction, though at values that may not be at market peak level.

Secondly, artists who are more universally appreciated can weather recessions better than emerging artists who may only be of interest by more regional or less traditional collectors. Third, these are times when collectors should be in acquisition mode.

The data also points to some more interesting phenomena, however. On the one hand, some specific artists’ works were ostensibly unaffected by the recession. This would suggest that a growing appreciation in the work of an artist can be more important than global economic events in determining performance, and that artists like Calder, as well as blue-chip artists like Picasso or Warhol, can buck wider economic trends and demonstrate a surprising degree of stability, while other artists cannot.

Without adequate data, collectors will often be at a loss to discern which artists will perform well, regardless of economic environment, and which works can offer the greatest stability. Ultimately, it’s not about timing the buying or selling of their works during economic fluctuations, but identifying artists who consistently have stable transactional markets.

Andrea Danese
G. Andrea Danese is President & CEO of independent specialty finance company Athena Art Finance.

All graphs courtesy of Athena Art Finance.