These are hard times for the art market. Not because people don’t want to sell art. They do. Nor because people don’t want to buy art. If anything, the boredom and inertia of lockdown has made the very rich feel even more acquisitive, and art seem even more desirable, as they sit drumming fingers in the unaccustomed confinement of their gilded cages. It’s just that the higher up the market you go the less confident both buyers and sellers are of where prices should be set. As one American collector said to me last week: “I’d love to buy a great Picasso now but I don’t want to go down in history as the only guy stupid enough to buy in 2020 at 2019 prices.” Similarly with sellers: “Yes, I would consider an offer on my Matisse,” another told me, “but it’s got to be a high one. I don’t want people to think I’m in difficulties, because I’m not.”
The major auction houses talk bravely about conspicuous increases in their online sales in recent weeks, and there is no doubt that one of the consequences of the lockdown will be a huge boost to online business in the art market. But once again, the higher up the market you go, the less confidence there is in online sales, particularly now when coronavirus restrictions mean there is no chance of seeing the work you are bidding on in the flesh.
What is the maximum price people are prepared to pay for art, based only on a digital image? That’s the nub of the matter. Perhaps $500,000? Yes, there are stories of people—generally new buyers in the contemporary art field—splashing out higher sums for works they haven’t seen, but these are the exceptions, not enough to sustain a viable market.
One thing that even the most optimistic auction house executive has to admit is that you cannot hold an online-only sale of top Modern or contemporary works, still less Old Masters. Bidders simply won’t bid online when prices start at $1m and include items expected to fetch $50m plus. Why not? Because successful sales of major works of art still need three different presences in the same room. The original, examinable work; the prospective buyer; and the dealer, adviser or auction house expert to explain, weave the fantasy, and persuade. While travel restrictions and social distancing measures are in place, this simply isn’t possible to orchestrate. Buying great art is an extraordinarily personal process, a bit like falling in love. You can date online, but the relationship won’t flower until you actually meet.
What will get the top end of the market rolling again? A successful public sale at one of the major auction houses to revalidate prices. This won’t happen until pictures and people have greater freedom of movement, so that sellers can consign major assets confident that major buyers will not just be sent images of them but get to stand in front of them. Consignors may have to be enticed by guarantees, and particularly third-party guarantees which, in uncertain times, can act as a reassurance to buyers.
These are not easy judgement calls for auction houses. A bit like ending lockdown too soon, holding such a sale prematurely would have disastrous consequences. But when it comes it will be the cornerstone of a refunctioning market.
• Philip Hook is an author and was formerly the senior director of Impressionist and Modern art at Sotheby’s in London
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