The Art Market Monitor sat down with Ian Peck of the Art Capital Group a few weeks ago–just after the Old Master sales and just before the London sales–to discuss Art Capital Group’s view of the market from their unique position providing financing to dealers and collectors.
AMM: You saw the Old Master sales, what did you think?
Ian Peck: I thought it was another example of the weakness in the market. The transaction volume has dropped precipitously. So it is less about value; it’s more about actually finding a buyer to transact with. It’s stagnation, in a way. Things have ground to a halt. People are just sitting on the sidelines rather than making acquisitions and sellers are faced with a choice: try and sell but with the prospect of finding a buyer being relatively slim. Or not to sell and hold on.
AMM: And wait to see what the prices might be later, especially if we do have a deflationary environment. I was listening to a dealer at the Sotheby’s Old Master sale saying he wasn’t worried about now, even the prices now, he’s worried about six months from now. You get the sense the dealers are holding back.
Ian Peck: You have dealers who naturally have to be forward looking in their buying. I think they’re looking downstream. Some of the dealers went through the last downturn in 1990. That was less broad-based than this one–at least that’s the consensus–and that lasted a couple of years. So this could be three to five years of malaise. Dealers are going to be cautious about committing their capital at this point. I think the next year–certainly the next six months, twelve months, eighteen months–dealers are very cautious.
(More of the interview after the jump.)