Featured in Georgina Adams‘s recap of Art Basel Miami are two quotes from Andrew Fabricant of the Richard Gray Gallery. Together they suggest a stock-market-like pattern where one is likely to seem prices compress in the short-term before expanding again in the longer term:

“I think that fewer expensive works will sell this year, and prices will go back to 2002/03 levels,” said Andrew Fabricant of Richard Gray Gallery. He, along with many other dealers, admitted that they would be “flexible” on their prices, and had chosen to bring along more accessible works. [ . . . ]

“The current situation is like in the 1990s – and it was really, really tough then. We did Art Basel in 1993 and didn’t sell a single thing. But people who bought during that period made great deals. I remember a beautiful 1968 Judd yellow stack selling in 1993 for $110,300, with only one bidder on it. Today it would be worth so much more.” Indeed, in 2003, a smaller but comparable Judd stack fetched almost $1.5m.

There is a macroeconomic background that would support this view. We’re in a period of rapid deflation that the Fed is combatting by creating huge amounts of monetary liquidity. At some point in the middle distance, the contraction will reverse. That means in the short-term few owners will be inclined to sell unless they must; and inflation will support the prices of art over time.

Strong Voting for the Art Party (Financial Times)