Art has been a fashionable alternative investment with prices surging over the past several years. But air seems to be leaking from the art bubble as the stock market weakens.
Contemporary art auctions at Christie’s, Sotheby’s and Phillips in New York fell 26 percent to $33 million in September from $44.8 million during the same sales last year as a third of lots failed to sell. Just 63 percent of artworks created in the past four years found buyers, 22 percent less than last year, according to research by Artnet Analytics.
“The era in which you could buy something for $3,000 and sell it for $100,000 a month later is fully over,” Bill Powers, whose Half Gallery held Smith’s solo debut in New York in 2012, said in a phone interview. “And rightly so. That was unsustainable exuberance.”
Alternative investments should have an alternative “engine”. If prices are dependent on the growth of traditional markets, they cannot act as a hedge when markets are distressed.
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