Staggering Sales Suggest a Booming Yet Cautious Art Market

With a spate of high-value auctions netting Sotheby’s, Christie’s, and Phillips more than $2.5 billion so far in 2022, the art market is hot. In May alone, Christie’s auctioned a 1964 Andy Warhol portrait of Marilyn Monroe for $195 million—the highest auction price for a 20th-century work. The holdings from the bitter divorce between billionaire couple Harry and Linda Macklowe, a 65-piece collection comprising blue-chip names like Gerhard Richter, Mark Rothko, and Alberto Giacometti, recently garnered Sotheby’s a staggering $922 million to become the most valuable collection ever sold at auction. 

These tentpole sales join a Phillips auction of a Jean-Michel Basquiat canvas for $95 million, a Pablo Picasso sale at Sotheby’s for $67.5 million, and two works by Mark Rothko that sold at Christie’s for $116.4 million. The market boom is venturing beyond fine art, too—the world’s largest blue diamond to ever be auctioned sold for $57.5 million at Sotheby’s and Mercedes just nabbed $142 million for a rare 1955 Mercedes-Benz SLR coupe, making it the most expensive vehicle sale in history. 

What’s fueling the skyrocketing sales? Economic uncertainty, mostly. According to Bendor Grosvenor, an art historian and former dealer, the recent high sales volume demonstrates that wealthy buyers are viewing art as a “longer-term hedge as an asset” amid a turbulent financial market. Stocks plunged last week—the Dow lost 1,161 points on Wednesday, the steepest one-day drop since the onset of Covid-19—after major retailers reported disappointing first-quarter earnings, waving a red flag for the current economic outlook amid worries over inflation, high gas prices, supply chain woes, and the ongoing war in Ukraine. 

“Either art is one of the few assets that seems to have a good immunological protection against recession, or inflation is much stronger than we think,” Loic Gouzer, a former Christie’s specialist, tells the New York Times. “The art market feels very close to the spare parts market—good works are hard to find and very expensive.”

Collectors aren’t only patronizing marquee auctions; fairs during New York Art Week also reported strong sales despite Covid-related anxieties about resuming in-person events. Frieze New York may have had a tighter footprint at The Shed compared to the former sprawling white tent on Randall’s Island, but strong sales dovetailed with the widespread feeling among collectors that fairs were returning in “full pre-pandemic force,” Perrotin New York partner Peggy Leboeuf told Artsy. Perrotin’s opening-day booth quickly sold out during the preview, placing works by Daniel Arsham, Bharti Kher, and Paola Pivi to new collectors and existing clients. TEFAF reported a similar atmosphere; Massimo De Carlo’s booth, dedicated to L.A. artist Aaron Garber Maikovska, sold out within the first hour of the fair. 

The thriving art market seems to have reversed course from early on in the pandemic. The annual Art Basel and UBS Global Art Market Report noted that global art sales had recovered strongly from the onset of Covid, with sales climbing to $65.1 billion in 2021—a 29 percent increase from the previous year. According to Doug Woodham, managing partner of Art Fiduciary Advisors, “art tends to be a lagging market,” he tells the New York Times. “Speculative capital flooded into the market in the late 1980s, then stocks crashed in 1990 [after Iraq’s invasion of Kuwait]. The art market didn’t crash until 1991.” At the same time, the once-booming NFT market is suffering: It posted a steep 92 percent decrease in transactions compared to this time last year and recently lost $1 trillion in value, sparking comparisons of cryptocurrency to the dot-com bust in the late 1990s.