Taking Advantage of the Current Art Market!

Are you taking advantage of the current art market? Art collecting is a passion that many of us share, and hopefully you collect for your personal enjoyment. However, original art can also be a wise economic investment, especially over long the long term. If you can collect and enjoy original art while it appreciates in value, you certainly have a winning combination.

In today’s economy, it is no secret that difficult times are affecting art prices. The Mei Moses Fine Art Index for the first quarter has just been released, and it indicates that art prices declined 35% during the first three months of the year. According to the Financial Times Limited, the “decline accelerated as people who lost money in the financial crisis put up works for sale, often at a loss.” Even the wealthy are experiencing cash flow problems. That is reflected by collectors liquating portions of their collections and by deflated selling prices. Even corporation and museums are selling items from their collections. According to data from the Mei Moses index, contemporary and postwar art prices appear to have been hit the hardest, with works by Old Masters only being marginally impacted.

In the low to mid-range art market, this same type of trend is being seen universally in galleries and in auction houses, both regionally and nationally. Works in this range are also typically selling for 15 to 20 percent less than eighteen months ago. So, is art a wise investment? Like the stock market, unless you have a crystal ball, it is difficult to tell. There are periods in recent history where art prices certainly outperformed the stock market, as measured by comparing the Mei Moses Index to the S & P Index. Many art experts believe that art will outperform the stock index over the long run, and it is clear that the art market did not see a major decline in 2008.

What does all of this mean for the average collector or for someone beginning to acquire works of art? If you have an interest in acquiring art and have the liquid funds to do so, now is a fabulous time to buy original artwork. Good works of art in all price ranges are coming to market, and your investment will go so much further than twelve months ago. If you worry that you might pay too much, engage the services of an appraiser or consultant to advise you or act as your agent; there are deals to be had in almost all categories of art and an expert representing your interest can minimize your risk. Don’t assume that prices for all works of art reflect current market trends; there still high prices out there for the unsuspecting buyer.

But even now, when there are good buys available, remember the most important rule of collecting art. Buy what you like. Collecting art purely for investment purposes is risky and not nearly as much fun as owning art for personal enjoyment. Be selective, know current market trends, look for good value, and buy what you like. Then, you can’t go wrong!

©2009 Vicky Nash Shaw, ISA AM
www.theauthenticappraisal.com