State of the Market: Auction Houses and Art Fairs Plow Ahead in 2021’s Third Quarter

The art world finished the summer season flush with high sales results and the enthusiastic return to live art fairs. New market reports offer a clearer view of the COVID-19 pandemic’s long-term impact on the art world. Additionally, the strengths and weaknesses of NFTs have come under increased scrutiny. After 2021’s third quarter, Auction Daily examines the state of the market.

Market Analysis – 2021’s Third Quarter

The largest auction houses have officially bounced back from 2020’s slump. Each company reports sale rates that exceed pre-pandemic levels as consignors rebuild confidence in the market’s health. The summer season boasted an average 93 percent sell-through rate across the major auctions. However, these gains were not universal. London data firm Pi-eX reports that North American art auctions continue to lag behind as Asian markets make up the shortfall. Phillips especially had private sales to thank for its profits in the first half of 2021. 

UBS and Art Basel’s most recent market report notes that the recent growth is limited in scope. Small to mid-size galleries have struggled to regain profits and jobs even as the largest dealers expand. The report, researched and penned by art economist Clare McAndrew, also commented on the rise of millennial and women collectors. Both groups spent more in the first half of 2021 than in previous years. Millennial spending far outpaced other generations, and women collectors spent more than double what male collectors spent.

The cultural sector is also recovering from previous losses, according to AEA Consulting’s recently published Cultural Infrastructure Index. Cities around the world have released funding for new museum, gallery, and art venue projects. Over $8.2 billion will support 130 cultural infrastructure projects, a significant increase from even pre-pandemic levels. This rise is particularly apparent in Asia, Africa, the Middle East, and Australia/ Oceania. Shenzhen announced the highest number of projects, further reinforcing the city’s status as a rising global art hub.

Art Fairs Offer Mixed Responses to Delta Variant

Live art fairs have picked up in recent months as COVID-19 vaccination rates increased and travel restrictions eased. However, the art industry’s response remains inconsistent as safety concerns remain, particularly given the rise of the contagious Delta variant. Some fairs forged ahead undeterred. New York’s Armory Show became one of the first art fairs in the city to successfully run in person since the pandemic. The event included ample safety precautions. Many European galleries could still only participate through online viewing rooms. 

Across the Atlantic, Art Basel’s flagship show also proceeded despite pandemic complications. Controversy plagued the weeks leading up to the event. Many galleries called for the fair’s cancellation as COVID-19 cases spiked. Swiss authorities refused to admit individuals immunized with the AstraZeneca vaccine. Added travel limitations from the U.S. yielded a decidedly European attendance list. Nevertheless, sales continued uninterrupted as dealers took advantage of old connections, virtual viewing rooms, and early purchases. 

Some fairs will continue their hiatus. The New York Antiquarian Book Fair, the New York International Auto Show, and the European Fine Art Fair called off plans for 2021’s third quarter. The Delta variant was a shared concern, as were travel challenges for international dealers. Preliminary results from the Armory Show and Art Basel suggest that even successful live events have become more localized. Art fairs as international market hubs have yet to make a comeback.

NFTs Receive Validation… and Critique

The NFT market rush continued during 2021’s third quarter. Sotheby’s emerged with a new crypto art record after it sold two collections of Bored Ape Yacht Club (BAYC) NFTs for a combined $26.2 million. One winning bidder dropped $24.4 million for a single lot of 101 unique apes. “Solidifying [NFTs’] importance, today’s extraordinary result is a defining moment for the NFT market and a testament to the enthusiasm and the strength of the close-knit BAYC community,” stated Michael Bouhanna, Sotheby’s co-head of digital art, after the sale.

NFT collectors have also diversified over the last few months. Major brands such as Visa and Budweiser joined the ranks of NFT owners in August. Visa bought its first CryptoPunk for $150,000, hoping to get hands-on experience with NFTs before advising investment clients. The purchase prompted an instant uptick in CryptoPunk sales. Average prices for the icons reached a record high of nearly $200,000 each. Support from traditional financial services groups such as Visa has lent an added layer of legitimacy to NFTs. 

With increased exposure for NFTs comes increased critiques. Damien Hirst dove into the digital art world with The Currency, a project that asks buyers to choose between an NFT and a physical version of the artist’s signature dots. Hirst is probing the future of crypto art in the traditional art world using the scarcity model popularized by the CryptoPunks.

Other artists have pointed out the increasing similarities between NFT boys clubs and real-life social disparities. Digital and performance artist Cassils interrogated these parallels for their recent $HT Coin project, telling Artnet News that “the Beeple sale mirrored the mediocrity that we see in the contemporary art world and filled a space of supposed technological promise with the same inequities.” Cassils intentionally explored the prevalence and privilege of white male artists with $HT Coin. And addressing the issue of manufactured digital scarcity. As the art market eagerly embraces NFTs, critiques such as Cassils’ have grown louder.

Auction Houses Prepare for Autumn Sale Season

After a slower summer, the auction industry started preparations for the autumn sale season. Sotheby’s and Christie’s offered fall Asia Weeks to wrap up September while seeking major consignments. As collectors shied away from selling during the pandemic, the industry giants have grown more competitive in their search for big-ticket auction items. 

Sotheby’s won a fierce bidding war against Christie’s to sell 65 items from Harry and Linda Macklowe’s famed billion-dollar art collection. Expected to fetch at least $600 million, this portion of the Macklowe Collection is one of the most significant consignments to enter the auction market in years. Masterpieces by Alberto Giacometti, Mark Rothko, and Cy Twombly will cross the block in November. Contemporary art collectors will have other bidding opportunities in the coming months, particularly as Phillips returns with a series of major 20th-century and contemporary art auctions this autumn.

Interested in other market trends in the auction industry? We recently examined the explosion of video game prices at auction, as well as the deepening divide between video game collectors and sellers.