On the Market: Strength of the Middle Market

La Chiesa Gesuati by Federico Del Campo
La Chiesa Gesuati by Federico Del Campo. Price: $335,000

It is a common misconception that a person must be a multi-millionaire in order to cultivate a significant art collection. This misunderstanding is, in part, thanks to the seemingly ever-present news stories of record-setting results at auction and sales of eight- or nine-figure paintings. In the last year alone, Leonardo da Vinci’s Salvator Mundi sold for a jaw-dropping $450 million, while Amedeo Modigliani’s Nu Couché brought $157.2 million.

Rise of the Middle Market

These sales, however, are only the most sensational upper echelon of a thriving global art market. What is not making headlines is the sure and steady rise of the middle market, which is the playing field where collectors feel increasingly confident. As the Wall Street Journal's Kelly Crow puts it: “It’s lonely at the high end of the art market, as collectors increasingly do an about-face and shy away from trophies in favor of lower-priced works.” Rather than eight- to nine-figures, more modest works are gaining traction, particularly amongst new collectors and those who view their art collections as an investment.

For those who want to dip their toes into the art market, the middle market offers the perfect starting place. Not only does steady market growth show that these works retain their value, but there is also a vast range of styles, artists, and price points to choose from. From lesser-known modern painters to tried-and-true Old Masters, the middle market is ripe for collectors who want to live with their art collections and feel comfortable investing in art at more accessible price points.

Caspar by Jan Van Bijlert Caspar by Jan Van Bijlert. Price: $288,500

Old Masters on the Rise

While Old Masters never go out of style, in recent years the art market at large has swayed towards a focus on contemporary art. Yet, Salvator Mundi’s extraordinary sale in 2017 helped to, in part, propel the Old Masters sector back into the limelight. Market experts also point to new marketing strategies as an influence on this rise. Sotheby’s collaboration with fashion designer Victoria Beckham in June of this year is perhaps the most high-profile example of this, when she featured her “favorite” lots from the auction house’s annual Old Masters auction in her posh fashion boutique on London's Dover Street.

For those who appreciate history, talent, and beauty, Old Masters are highly collectible with or without the shiny facade of celebrity endorsement. Not only do they have growth potential, but most works remain at mid-market prices, making them far more accessible to collectors than more high-profile modern and contemporary works. A report by ArtTactic shows that 63% of Old Master dealers have enjoyed an increase in sales during the first half of 2018 - an indication that this category is on the rise.

The growing popularity of Old Masters is also seen in the results of Sotheby's and Christie's 2018 Old Masters sales, Sotheby’s on February 1st and Christie’s on April 19th. ArtTactic reports that between these two sales, “100 lots were sold out of 133 on offer, with an average sale price of $679,000... the most lots sold since 2011, and the highest percentage of total lots sold since before 2010.”

With time, the supply of Old Masters will continue to diminish. Given the fact that there are currently still great oils and works on paper available, it is an ideal moment to consider this category before demand outweighs supply.

Employment Station, New York by Martha Walter Employment Station, New York by Martha Walter. Price: $198,500

Optimistic Outlook

According to Deloitte’s 2017 Art & Finance Report, in spite of heightened geopolitical and economic risk, the outlook for the art market is cautiously optimistic, particularly after a marked increase in sales throughout 2017. Indeed, we have seen this optimism in action during the first half of the year. Sotheby’s, Christie’s and Philips’ sales of lower-priced art have all performed remarkably well, with three sales in May all selling more than 85% of their offerings. Furthermore, Philips’ $24 million sale in May was the highest in the company’s history.

Ed Dolman, the CEO of the Phillips auction house, is quoted in The Art Newspaper as stating, ““There has been a lot of discussion about fatigue, but the market feels very solid right now... the demand for things under £5m is extremely strong.” Certainly a strong global economy encourages a strong art market. However, the beauty of the middle-market is that these tangible goods acquired during a strong market will retain their value in times of instability.

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