The crisis spreads to the art market [Nov 08]
The impact of the financial crisis on the art market - traditionally perceived as a financial safe haven - is now clearly confirmed. A market downturn is no longer a theoretical scenario... it is a reality. Since the beginning of September, the art market has contracted for the first time since 1990. Although it survived 9/11, the meltdown of the global financial system has been too much for the "pleasure investment" market. The figures speak for themselves. Just a few hours ahead of the prestigious New York sales, Artprice has compiled an analysis of the results recorded at 2,900 auction houses around the world.
To the question: what impact is the global economic slowdown having on the art auction market? The answer is: a sharp correction of prices and an explosion of the bought-in rate.
To the question: are any segments of the art market likely to escape the trend? The answer is: no...............
Our figures show an equally strong impact in the small provincial auction rooms and at the major prestigious auction houses: since the beginning of October, the crisis has had a significant impact.
And nor is the ultra top-end of the market, where masterpieces change hands for hundreds of thousands or millions of dollars, exempt from this overall trend.
Driven by demand from the nouveau riche in Asia, Russia and the Middle-East, prices were buoyant up until June. However, we see a clear contraction since the end of August. The bought-in rate has more than doubled in one year, growing from 25% at the end of 2007 to 54% in October 2008. Paradoxically, the prices of works presented above the 100,000 euros line (and which were successfully sold) have remained stable compared with the levels recorded 12 months earlier. On this segment of the market, bearing in mind the time lapse between the moment when works are valued and the final closing of the sales catalogues and orchestration of the sale, price adjustments are slow or inadequate. As reserve prices have not been adjusted to take into account the new market reality, the first expression of a new supply/demand equilibrium during periods of crisis is an increase in the bought-in rate.
Whereas the top-end of the market (4.1% of transactions) has shown relative price inertia, on the more dynamic segment of works offered for less than 100,000 euros, reactions have been more spontaneous: price adjustments are already underway. In this segment, the price index calculated using the repeated sales method has dropped 18% compared with October 2007!
IS YOUR MONEY MARKET being marked to the market, or just valued at 100% by order of the Feds? G
Real estate spiral to continue, expert says
InvestmentNews, NY - 9 hours ago
“A lot of that debt is not refinanceable” in the current markets, a situation that could force property owners to sell off real estate at fire-sale prices, ...
Oil at $59 BBL.G
Gold spot: $711 per oz.