New York Magazine's "The Art Market Will Crash" Story
Well.. It was bound to happen.. major deadwood media wakes up! This week a NYC magazine writes a story predicting the demise of the Contemporary Art Market.
If you haven't picked it up yet.. The April 3rd edition of New York Magazine has a lengthy story by Marc Spiegler titled "Five Theories on Why The Art Market Can't Crash, and Why it will Anyway."
He presents 5 reasons frequently sited for there not being an art market crash
- Expanded Art World - Size Matters!
- Art's Gone Global - Russia, China, Mexico, Brazil, Korea, Mid-East..etc
- New Asset Class - research showing art as an investment vehicle
- Diversification as a safety valve - Now we have Video, Photography, etc
- The Japanese - Like the 80's.. they'll be buying anything
Well.. While I agree there maybe some froth in the modern and contemporary art market, I disagree a crash is coming anytime soon. And actually just the fact articles like this get written, by popular deadwood media is healthy for the market. It should get collectors and dealers thinking a bit more about what they are buying, and is it reasonable? Which I think in turn keeps the art market from getting completely crazy! (Atomic Blast Graphic by Kota Ezawa)
It's been the same for the US Real Estate Market, everyday on CNBC for the last 4 years there have been reporters saying "RUN AWAY..It's going to BLOW!", "Sell Mortimer!!" It's a real estate bubble..!! and asking when will the bubble burst..?? But Real Estate has continued to go up in value strongly for the last 4 years.. and only now, that mortgage rates are back up to 6.75%, maybe it's getting a bit soft. A few months ago Dr. Quiz & I saw a funny poster at Devlin McNiff in East Hampton, of a very old man and woman looking sad.. below the photo was the caption, "Young Couple, waiting to buy when the Hamptons Real Estate Market corrected!"
Sure, the Art Market will eventually slow down, poorly managed galleries will close, and maybe some artists works (in real estate some place like Miami/SoBe) are over priced and fall, (ie...Loretta Lux, Richard Prince, John Currin, maybe Warhol, etc) but it's just not all crashing yet.
I'd add these reasons to the list of 6 above to consider..
1. Everything is linked, Art won't crash without the US economy, stock market, job market, real estate markets, etc, going down hard first.
2. Worldwide Museums are growing in both size, space and endowments.. Just the Getty and Gates foundations purchases alone should push art prices up!
3. So far 2006, Wall Street Firms are going stronger than ever.
4. Most people are looking for other types of investments since.. real estate, and stocks look fully valued and putting all your money in the bank at 5% before taxes just doesn't cut it.
5. All these new rich Hedge Funds want something special in their corporate offices and new McMansions! But NO, "Hedge Funds are not the New Japanese!!"
6. Better transparency helps give buyers confidence for all collectables, thanks to better information and prices through the Internet and media. Thank you Ebay, ArtPrice.com, Antiques RoadShow.. and Porcelain Paul!
I'm sure there are more reasons as well.. Any thoughts out there??