Recent art-news headlines haven’t presaged good things for the emerging art market. Earlier this fall, articles were filled with the anxiety-inducing assertions: “Collectors Abandon Emerging Art
” and “That $100,000 Painting Bought to Flip Is Now Worth About $20,000
.” But amidst this week’s strong sales at emerging art fair NADA and Art Basel in Miami Beach
’s emerging sections Nova and Positions, these somewhat sensational declarations have been called into question. During a Thursday evening conversation at Art Basel in Miami Beach, four emerging art market players—collector Shelley Fox Aarons, gallerist Stefania Palumbo, art advisor Rob Teeters, and writer and dealer Kenny Schachter—set things straight. In an emerging market that has been overshadowed by voracious flipping and vertiginous price shifts over the last five years, they explained why a downshift in monetary value doesn’t mean doomsday for emerging art. In fact, the landscape may be healthier—and wiser—than ever. Below are three takeaways from their discussion on the current state of the emerging market.
Flippers are being reformed
Moderator Sarah Douglas, ARTnews
magazine’s editor-in-chief, jump-started the conversation with an abbreviated timeline of the emerging market’s last five years. She tracked the 2011 rise in interest among accessibly-priced work by young and unknown artists; a period between 2013 and 2015 that saw the prices of work by primarily male painters in their 20s and 30s, like
, skyrocket; and the steep drop in prices those pieces have experienced in the last 12 months.
These shifts, as she explained, were driven by collectors who began to look at the work of emerging artists as investment. These collectors incited rapid increases in prices of new paintings and occasionally sculptures by young artists—some which saw as much as a 1,500-percent gain in the course of a year, between 2013 and 2014. Recently, the values of the majority of these works have fallen back to their original primary market numbers, or lower. It’s a pendular shift that’s left many speculators in the red, and set back the careers of numerous young artists.
“The period of intense speculation was a bit of a wakeup call,” Schachter explained. “There was disconnect with the fact that artists who have no history were selling for historic prices. It was unsustainable.” Indeed, as the monetary value of work that was the subject of speculation has dropped, speculation around emerging art has slowed in step, which means that less of this work enters the secondary market before an artist’s career has matured.
Aarons, who with her husband has amassed a significant collection of emerging work purchased almost exclusively on the primary market, echoed Schachter’s view. “If I were to look at art as an investment, I wouldn’t buy the art that I buy. I would probably buy more established artists with a track record, where it was clearer what the trajectory would be,” she explained. “Although the percentage increase may have been very high, these flippers weren’t making vast amounts of money. So for the damage that they’re potentially doing to a young artist, it doesn’t make sense to us.”
Speculators haven’t completely exited the art world, however. As Schachter pointed out, a 2014 triptych by thirtysomething artist
sold at Christie’s last month for $750,000, significantly exceeding its high estimate of $120,000. “Greed is a fundamental human characteristic, it doesn’t go away,” Schachter explained. “So there’s plenty of continuing instances where there’s still unbridled speculation, but it’s been tempered—a lot of the people who were coming in for a quick fix are out of the picture.”
Non-speculative markets are still healthy
While the prices of work pulled into the 2013-14 speculative froth may have decreased, the value of many emerging artists is still growing. These artists have seen little to no work traded on the secondary market. This is thanks in many cases to the support of gallerists who avoided selling to speculators and to collectors who refuse to speculate. Therefore, they’ve been able to maintain the slow, steady value-appreciation that often reflects a lengthening exhibition list.
“We approach our program, and how we work with artists, by thinking about their careers in a long-term way,” explained Palumbo, whose Supportico Lopez
gallery works with a roster of primarily emerging artists and was exhibiting a solo booth of young sculptor ’s
work at Art Basel in Miami Beach. “What we try to do with both our collectors and our artists is create sustainable growth and relationships. We found working this way decreases the pressure to be hot, which can fade very quickly.” The approach seemed to be paying off. All of Dean’s sculptures had sold by the second day of the fair, indicating the continued health of the emerging market.
Aarons, for her part, hasn’t been deterred by the recent valuation dips. “My husband and I have bought—and still buy—a lot of art,” she explained. “There are many different types of value, and monetary value is just one of them. We happen to find a lot of value in the work we purchase, no matter what the original price was and whether it grows or doesn’t.”Aarons collects to support the production of art being made now, and to live and engage with with work that she brings home. “I might have something on my wall that I bought for $15,000 or $18,000 see it’s monetary value grow to $150,000 or $180,000, but I still love it. It’s not coming off my wall. And if I don’t still love it, then it’s going into our storage—not to an auction. Time will pass, and I might see the value go back down to $15,000, perhaps zero, but that’s not the reason why we got involved in art in the first place.”
And it’s not only individual collectors who remain committed buying works by emerging artists and hanging onto them—thereby avoiding participation in the speculation that can damage the careers of young artists. Douglas mentioned coming across a painting by Lund in an Art Basel in Miami Beach VIP lounge showcasing works from the Swiss bank UBS’s corporate collection. At a reception in the lounge earlier that week, global head of the UBS Art Collection Mary Rozell explained that the Lund was a recent purchase bought on the primary market, like all of the work in the bank’s vast collection.
Collectors continue to buy emerging art, but are also diversifying their portfolios
While the emerging market remains healthy, thanks to a community of collectors buying art for reasons beyond pure investment, the 2013-14 period of speculation has made some of these connoisseurs begin to look beyond emerging art. During a time when the prices of work by young artists was soaring, they discovered that the art of mid- and late-career artists with weightier exhibition histories could be purchased for not much more, and sometimes even less, than the work of young creatives.
“There’s a section of the mid-career market, for instance, that can be accessed for great value, and I think that speculation led to a wising up of that fact,” explained Teeters, who advises numerous collectors. “As prices escalate for young artists who have two shows, and their works are selling for $30,000, $40,000, you can look at a mid-career artist who’s had an extensive exhibition history and their work is selling for that same amount.”
Now that speculation is waning, and the emerging market is again leveling, many of these collectors haven’t stopped buying mid- and late-career work. The result: diverse collections that coalesce art by emerging and more established artists alike. “I’ve been seeing collectors who used to buy 30 works a year by emerging artists for $10,000 each now buying a couple of emerging works for $10,000 or $15,000 and another work by a more established artist for $200,000,” Teeters continued. It’s an unexpected but arguably healthy consequence of recent speculation and the resulting downtick in prices. Collectors aren’t abandoning the emerging market, but they are expanding their interests to markets that have been largely ignored—like that of mid-career and underrecognized late-career artists—during the emerging art boom of the last 10 years.