An art market full of cracks is about to face a $1 billion test

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While the spring sales typically have more than a dozen works offered for more than $30 million each, this year there are just a few.

Art auction sales at Christie's, Sotheby's and Phillips over the next two weeks are expected to total $1.2 billion, down 18% from a year ago, according to ArtTactic.A version of this article first appeared in CNBC's Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer.

During the first quarter of this year, sales in the contemporary and postwar category — the big money maker and growth driver for the art market in recent years — plunged 48%, according to ArtTactic. "Sellers want 20% more, and buyers want 20% less," said Philip Hoffman, CEO of the Fine Art Group, an advisory and art finance firm. "There is a stalemate."Dealers say today's buyers don't have the confidence they had two or three years ago: Persistent inflation, higher interest rates, fears of a slowing economy, the upcoming elections and geopolitical crises are all causing many collectors to pause their buying.

"Our clients have have a ton of cash," Hoffman said. "The question they're asking is, 'Should we buy in to the art market right now?'" Christie's is featuring a large work by Brice Marden, who died last year, called "Event," estimated at $30 million to $50 million. It also has an iconic 1982 work by Jean-Michel Basquiat, called "The Italian Version of Popeye Has No Pork In His Diet," estimated at $30 million.

At the same time, art experts say now is a good time to hunt for bargains given the long-term prospects for the art market.

 

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