The Art Market Hits a Wall

The blistering art market is finally cooling off. 

For years, the world’s chief auction houses seemed impervious to volatile stock-market swings, Russia’s invasion of Ukraine and historic inflation. Even amid the pandemic, Christie’s and Sotheby’s quickly pivoted online and art values kept soaring. Now, the veneer is cracking.

Sales at Christie’s and Sotheby’s slowed dramatically this spring as seasoned collectors chose not to ply their art troves into an uncertain economy. Auction executives and dealers alike agree the current slump may not drag everything down like the recession of 2008. But the market is bracing for shrunken sales that draw fewer jaw-dropping prices, as savvy collectors choose to hang onto their treasures rather than sell them at auctions.

“We’re in a changing market,” said Guillaume Cerutti, Christie’s chief executive, calling it solid but “less impressive.”

Cerutti blamed a supply shortage for the drop in its overall sales during the first half of the year, which fell 23% to $3.2 billion compared to a year ago, the privately held London house said Wednesday. Christie’s said its total included $2.7 billion in auction sales, down 23%, and $484 million in privately brokered art sales, down 19% compared to the first half of 2022.

Rival Sotheby’s, also privately held, said it will not release its first-half sales figures. A recent report from auction research firm ArtTactic said it found the house had auctioned roughly $2.8 billion in the first half, down 7.8% compared to the same period last year. Sotheby’s total doesn’t reflect any additional private sales, ArtTactic said.

Phillips, which has jockeyed lately to consign blue-chip material away from the bigger firms, suffered a blow this spring: Its $453 million in first-half sales represented a 39% drop from a year earlier. Phillips said 2022 proved a banner year, so any comparison will look like a letdown.

Only Bonhams, a London auctioneer that focuses more heavily on lower-priced luxury objects and collectible cars, appears to have emerged unscathed: The house said its $550 million in sales during the first half of the year represented a 32% bump from a year ago.

“No doubt some discretionary sellers are more hesitant now, but when we bring collections to market, we’re doing exceptionally well,” said Ben Gore, Christie’s chief operating officer. “There is plenty of through-cycle stability.”

A year ago, collectors were giddy to return to live sales after the pandemic, crowding into packed salerooms to watch Christie’s sell a $195 million Andy Warhol or lining up in droves to see Hubert de Givenchy’s gilt antiques. Microsoft co-founder Paul Allen’s

Auctions can’t predict or control when coveted estates will enter the marketplace and stir up the sizzle that leads to blockbuster sales, which means they often need to rely on collectors seeking profits to resell their trophy works. Christie’s said this is the segment that saw the strongest pullback this spring, in part because sellers would rather not risk their works selling for less than they want or going unsold. 

Christie’s top painting for the spring was a discretionary sale: Fashion designer Valentino Garavani’s $67 million Jean-Michel Basquiat, “El Gran Espectaculo (The Nile),” sold in May. 

Yet the stakes and attitudes remain more freewheeling at lower price points, which is why Christie’s luxury category, which includes items like watches, wine and other goods, reported $590 million in sales during the first half, up 43% from last year. The house’s jewelry expert Rahul Kadakia said 38% of Christie’s newcomer bidders filtered in through this luxury portal.

The houses said mid-market fare—or pieces priced under $1 million—still look affordable to millennial buyers entering the marketplace. This lent a boost to everything that appeals to younger tastes, from editioned pieces like prints and photography to watches as well as contemporary and modern paintings by women and artists of color.

Bruno Vinciguerra, Bonhams chief executive, said his house shifted more of its sales entirely online to allow collectors up to a week to find time to log bids rather than ask bidders to show up for in-person sales. This multiplied participation from Asian and Middle Eastern collectors in its sales, he said. During the first half, Asian objects represented half of its top-10 pieces, including an 18th-century bedchamber sword of Tipu Sultan that sold in May for $18 million, nearly seven times its high estimate.

Bonhams also fared well selling collectible cars, a category Bonhams has long dominated in the U.K. that’s still ignored by larger firm Christie’s. But Vinciguerra said cars appeal to younger and celebrity collectors.

Whatever the market trajectory, dealers expect the auction industry to keep scrambling to adapt to do more with less—and to shift even more of its focus online. At Christie’s, Cerutti said nearly 80% of the bids placed in its auctions this spring were done online, up from 45% pre-pandemic. More than half of the works in all its sales were also won by these online bidders, up from 20% in the first half of 2019.

As a result, the houses will likely do whatever they can to shed some of the cloistered, crustier elements of their reputations to appear more edgy and hip—a tall order, dealers say. Christie’s has already rescheduled more of its online sales to Saturdays because it says that’s when younger collectors have more free time to browse. Marketing teams are also alerting audiences to upcoming auctions via music-filled, social-media videos rather than merely issuing press releases. 

Christie’s also said it’s not giving up on a secondary market for digital art. Instead, it’s conducting sales in niche areas where NFTS are still deemed cool, like Denver—not a typical art-sales hub. The house plans to keep collaborating with digital artists with proven online followings. The hope is these NFT collectors eventually start adding pieces from physical categories. 

“The NFT market may be more fallow,” said Christie’s executive Marcus Fox, “but we’re carefully and steadily ramping up.”

Write to Kelly Crow at [email protected]