Summarizing the art market in the first decade of the 21st century

What an amazing decade this has been for the art market!
If I were asked to give it a title – without hesitation I would name it “The contemporary art revolution”.
In this decade all records were broken and it seems that all the fundamental parameters that determined the prices of the art market were disrupted. Art by living artists – who may not yet be at their peak – reached the top of the art market pyramid annulling the element of rarity as a factor of value creation.

It is amazingly hard to go back in our minds to the year 2000. Remember when the world was all excited about entering the 21st century? At that time the art market was trying to overcome the previous bubble burst of 1990. It was quite stable at a rather low mark , slowly but steadily rising.

An article in 2003 announced the new elite in the contemporary art market starring Bruce Nauman as the most expensive artist at the start of the 21st century. (Among artists born after 1940). His record sale at 9 million USD. Second, at 5 million was Jeff Koons with Basquiat close behind at third place. Anselm Keifer barely scraped a million at 9th place and Damien Hirst, with a record price of 680,000 USD at the time came in at 16th place.

The change occurred in 2004, when an interest in contemporary art ( by artists born after 1940) began to escalate. Prices approached the 1990 mark although impressionist art was still 36% lower than before the 1990 crisis. Even though, this was the year that the all time record for a work of art was broken with the sale of Picasso’s “Garcon a la pipe” for 104 million USD. Picasso was and remained the king of the art market until 2007. Also in 2004, another landmark was the crossing of the million dollar mark by 4 living artists– Koons, Basquiat, Cattelan and Hirst. The record went to Koons – 4.9 million dollars.

2005 saw the swell continue with growing interest in contemporary art and photography. Prices reached the 1990 peak and continued to rise.

In 2006 a new generation of collectors was acknowledged. At least 800 works of art sold for over million. Enter China and India.

In 2007 people were sure that the market had peaked. Jeff Koons broke the record for art by a living artist – 21 million USD went o Adam Lindeman for his hanging heart. Picasso was dethroned by Andy Warhol.
The dramatic breakthrough of the year went to Damien Hirst. His record jumped to 17 million in 2007 from a mere 3 million in 2006.

In 2008 Hirst went from 17th rank in the auction ratings to the prestigious fourth place after his amazing “Beautiful inside my head forever” sale, in which 200 new works were auctioned by Sotheby’s for 200 million USD on the day Lehman brothers announced bankruptcy.
The Damien Hirst phenomenon will no doubt be a subject for academic research. He perfected what Andy Warhol began in creating a celebrity artist – Hirst as a marketing genius, provocative Koons with his porno queen wife. If it works for Madonna – why not for the fine arts?

In this decade art dealers also became celebrities – Larry Gagosian, Jay Jopling and Jeffrey Deitch can be seen in the tabloids .
In this decade a new concept was born – the “Mega-collector” – a new generation of extremely rich people that see art as an investment with social capital. The element of show as in auction rooms, the applause, the press and of course, entry to the prestigious club of collectors that can bid for raises of $250,000 without a blink, spending millions on one piece of art just because they can – all these are the epitome of their idea of collecting.

And then came the fall…. The last quarter of 2008 reduced the market to its 2006 level.
“Correction” was the term used to describe what had happened and I, personally, felt that it was a good word to use. The analogue that came to my mind was the biblical flood, which was a kind of reset for the world. My feeling regarding the art market in the last few years was of a certain madness and loss of control – as everyone got caught up in this frenzy. Artists couldn’t turn out the work quick enough to supply the demand and consequently this affected their work. Much has been said and written on the downside of this situation – artists are too occupied with business and marketing when their job is to create good art.

Amazing but true – no more than a year has passed and we are already seeing a recovery! Auctions are selling well (although estimates have been corrected) and it seems that the jockeys are back in the saddle. Will the horse regain its speed? Has anything been learnt in this experience? Time will tell and judge the quality of art that has staying power, the artists who we will remember ten and twenty years from now and those that will be forgotten.
I’ll leave you with this thought: In 1990 Jeff Koons was not yet on the market. This may mean that the Jeff Koons of 2020 is a name we have not yet heard of.

Notes:
The statistics mentioned in this post are all taken from Artprice.
Information regarding record sales do not refer to private sales as in the sale of Klimt’s portrait of Adel Bloch to the Ron Lauder’s Neue museum in 2006 for 135 million USD.