Third Year's a Charm: Reason for Optimism in the Art Market

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Earlier this month, Christie’s provided a hot talking point for the middle of summer, announcing its auction results for the first half of 2024. To the surprise of few, auction sales were down markedly from the first half of 2023, falling 22% to a total of $2.1 billion. And that 2023 first half total was already down 23% from 2022; over two years, sales have fallen a precipitous 40%.

The market softness is by no means a Christie’s anomaly, as colder conditions have tightened their bruising grip on a wide spectrum of houses. Barring an unforeseen and unlikely second half turnaround on par with Bobby Boucher showing up at half time and the Mud Dogs winning the Bourbon Bowl, the art market is likely to close 2024 with its second consecutive annual decline in auction sales. These are bleak times in the art world, but they are not without precedent. In fact, per historic Art Market reports from Arts Economics, auctions sales declined consecutively in 2008 and 2009, 2015 and 2016, and 2019 and 2020.

Good news: In each instance, there was no third year of decline, and the market responded with a spirited recovery.

In fact, across those three instances, the average third year increase in art market auction sales amounted to 43%. Even better, in the two years following consecutive years of auction sales decline, the market averaged a 52% total increase from the trough.

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2008/2009 Drawdown & Subsequent Recovery

2007: $32.9B

2008: $28.0B (-15%)

2009: $18.3B (-35%, -44% from 2007)

2010: $27.6B (+51%)

2011: $32.4B (+17%, +77% from 2009)

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2015/2016 Drawdown & Subsequent Recovery

2014: $32.7B

2015: $29.9B (-9%)

2016: $22.5B (-25%, -32% from 2014)

2017: $28.4B (+26%)

2018: $29.1B (+2%, +29% from 2016)

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2019/2020 Drawdown & Subsequent Recovery

2018: $29.3B

2019: $25.2B (-14%)

2020: $17.9B (-29%, -39% from 2018)

2021: $27.1B (+51%)

2022: $26.8B (-1%, +50% from 2020)

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Note: dollar figures represent global public auction sales of fine and decorative art and antiques.

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The takeaway: significant drawdowns in activity over multiple years are not at all uncommon in the art world, and they often follow a period of significant trophy sales, carefully managed auctions, and heavy speculation on young artists (all are familiar recent factors). But the art market frequently bounces back with vigor after a reset.

A word of caution. While the market did recover, it never again reached the peak in auction sales achieved in 2007. It came close in 2011 and even closer in 2014 but couldn't eclipse that mark. Since 2014, the market hasn't crossed $30 billion in public auction sales. Part of this is due to a mix shift by auction houses towards private sales, which now total close to $4 billion annually.

It’s not all bad. Christie’s reported an 87% sell-through rate, which remains a healthy figure on par with last year (albeit under tightly managed conditions), as well as a 111% index of hammer price to the low estimate, better than last year’s 107%. Expectations have adjusted, and the lots that are selling are largely meeting those new, reduced expectations.

Plus, outside of Christie’s, Heritage Auctions - which boasts a harder lean away from art and into cultural collectibles - reported the highest mid-year total in its history, hitting $925 million in sales, a figure which would have been a full year record as recently as four years ago.

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