Art Basel in Miami Beach’s Opening Day Sales Reflect a Hesitant Market

Confronted with a partially gilded plate of risotto piled high with white truffle shavings at a dinner to celebrate the Haas Brothers’ show at Miami Beach’s Bass museum on Monday, a prominent designer and architect turned to me and shrugged, “People say that there’s a crisis coming, but I look around and I don’t see it.”

The dinner kicked off the annual pilgrimage of art collectors, art lovers, and many others who come to Miami to soak up the scene during the Art Basel fair and 24 others taking place around it this year. At Art Basel in Miami Beach’s VIP preview on Wednesday, opinions were mixed about whether the art market—or at least portions of it—may be slowing.

While the economy doesn’t currently look to be headed for a crisis, UBS Global Wealth Management’s chief economist Paul Donovan said he does view the stock market’s recent volatility as a correction, following an unprecedented period of market expansion. After a sell-off on Tuesday, the markets now sit roughly even with where they were when last year’s Art Basel in Miami Beach opened (U.S. markets were closed Wednesday in observance of a national day of mourning for President George H.W. Bush, but opened sharply lower on Thursday). Donovan said that the fundamentals powering the economy remain strong, and that Tuesday’s sell-off reflects the kind of stock market volatility that could be expected while uncertainty around U.S.–China trade relations persists.

“Equities are more vulnerable to any further attempts to tax trade than is the economy at large,” he explained. “Disruptions to trade (or to the outlook for trade) are likely to keep markets relatively volatile.”

That is not necessarily bad for the art market: Donovan said that the majority of UBS’s clients don’t purchase art with any view to a potential return on investment, but rather on the basis of passion. In a survey of collectors with a net worth of at least $5 million that the company conducted in mid-November, 84% of collectors said they are either actively or opportunistically looking to add works to their collections, with 64% of collectors reporting they plan to spend $100,000 or more on art in 2019.

And Art Basel’s director for the Americas, Noah Horowitz, said on Tuesday that in a market affected by collectors’ passions and moods—which can be swayed by a season of auctions as much as by the macro-economy—the fair expects strong performance during its five-day run.

“There’s recently been some volatility in the markets; everyone is cognizant of that,” he said. “In the end, the fall auctions in New York were very solid, and that at least impacts psychology—people have sort of exhaled and are showing up onsite here full of enthusiasm.”

But uncertainty in aspects of their financial lives may lead collectors to seek out safer bets in Miami this week, retreating to more easily traded mediums like painting, for example, or to take more time when considering acquisitions. Both tendencies were observed by dealers during Art Basel in Miami Beach’s opening day.

David Zwirner said sales early on were “pretty strong, not riotous,” adding that collectors were taking longer to make decisions and weighing more options before committing to buying. He couldn’t say whether that was related to uncertainty in the economy at large, but did observe that the gallery’s clients have been noticeably slower to transact in recent weeks compared to a few months ago, during Frieze London in October—which, notably, coincided with the start of the most recent market swings.

“You can always tell when there are more reserves that come off than turn into sales, and we definitely had a bunch of reserves that didn’t convert into sales [today], so that’s an indicator,” Zwirner said. “The primary market is super strong; everything we brought in the primary market sold in the first hour. But on the secondary market, people are slowing down a little bit—they want to understand the price, how it all works.”

Those sales included paintings by Oscar Murillo and Harold Ancart for $380,000 and $150,000, respectively. On Wednesday, Zwirner also sold, for undisclosed prices, a 1991 Kerry James Marshall painting and works by Lisa Yuskavage, Yayoi Kusama, Michaël Borremans, Wolfgang Tillmans, Raymond Pettibon, and Ruth Asawa.

The gallery also produced an online-only show curated by Miami collecting scion Jason Rubell this week, the first effort of the gallery’s new director of online sales Elena Soboleva. (Soboleva previously worked at Artsy.) Zwirner said it’s emblematic of the way the gallery wants to use the online space to showcase not only the artists it currently represents, but also new artists and perspectives from others in the art world.

“The Rubell family is basically ground zero [for Miami], but it creates a great model for other things that we can do in the future,” he said. “There are only that many people that can see us physically, who can come to a fair or come to the gallery. And our audience now, with galleries in London and Hong Kong, it’s a much bigger, global audience. So we want to introduce a different platform for them to interact with what we’re doing.”

Dominique Lévy, the co-founder of Lévy Gorvy, echoed Zwirner in reporting a more measured pace of transactions on Wednesday. “I think that the market is slightly shifting away from that sort of pressure trend,” she said. “People are looking more carefully. People are getting more informed and more knowledgeable. But the energy is there.”

Overall, Lévy said that for the kind of historical work she and partner Brett Gorvy are showing at Art Basel in Miami Beach, a slower pace doesn’t necessarily mean lower sales totals in the long term. She said that the gallery is still in conversations with museums about the centerpiece of its booth, Keith Haring’s Silence=Death (1988), a work inspired by the now-iconic pink triangle that first appeared in a 1987 poster created by the Silence=Death collective, and which Haring painted the year he was diagnosed with HIV.

Lévy attributed the market’s change of pace mostly to the dramatic increase in the number of opportunities that collectors have to transact. “There’s been so many fairs, so many auctions, so much,” she said. “It’s the end of the year, and people are being more thoughtful. To me, it’s incredibly positive. I don’t see it as a slowdown. I don’t see it as a negative. I see it as a market that grew super fast in volume, scale, and width.” She added that the gallery had sold several works, all priced below $1 million, in the fair’s opening hours, including Adrian Piper’s Race Traitor (2018), which sold for €175,000 ($199,000) to an American foundation.

Trading volumes have, in fact, contracted by 21.7% over the past decade, while the value of those accumulated transactions has only gone down by 3.2%, according to The Art Market, an annual report commissioned by Art Basel and UBS. But it’s a shift that has favored the biggest galleries selling the most expensive inventory, so it’s not something that Lévy has felt.

“We feel exactly the other way around: that the belly of the market, if so called, is going up and up and up, not shrinking,” she said.

But Horowitz said that “the continued consolidation at the top end of the market” is what he and his team see as the foremost challenge facing the art market. The fact that, on Art Basel’s sales floor, galleries that are opening museum-sized flagships and launching research institutes abutt dealers with fingers and toes crossed that their sales this week will allow them to head home in the black is not lost on the fair’s organizers.

Starting next summer, at its Swiss edition, Art Basel will implement a new booth-pricing scheme whereby the biggest, most successful galleries—which can turn a profit at the fair in a single sale—effectively subsidize the younger galleries. The change was spurred in April, when Zwirner suggested such a scheme to Art Basel global director Marc Spiegler on stage at a conference in Berlin; the proposal garnered immediate support from Pace Gallery CEO Marc Glimcher, who called out approvingly from the audience.

Reducing the cost of participation can help smaller galleries’ bottom lines, but it doesn’t address the more fundamental issue of how to grow collector demand, the number of people buying art, and, ultimately, the number of artworks transacting annually. On Tuesday, at a conference about potential implementations of Blockchain technology in the art market, which was organized by collector and gallerist Adam Lindemann, Glimcher suggested that a more existential long-term challenge for the art market is figuring out how the art world can learn to transact with the many wealthy individuals who don’t currently collect art—and particularly how to draw those potential buyers’ attention to artists who aren’t household names.

“We’ve focused on this little top of the pyramid, but the bottom of the pyramid has grown substantially,” he said. Confronted with that growing “bottom of the pyramid,” an audience that may not have the same cultural and social background as what’s been typical in the art world—or that may be as interested in art’s financial performance as its aesthetic value—Glimcher said that many in the art market have pushed potential collectors away.

“This is not what we got into this for!” he said, mimicking a typical gallerist’s expression of frustration.

“But we need to learn how to interact with a much larger group of people,” he said.

Of course, as Glimcher noted, he’s still done very well transacting at the top of the pyramid. During Art Basel in Miami Beach’s first few hours on Wednesday, Pace sold an untitled Larry Bell sculpture from 1970 for $250,000, Mary Corse’s Untitled (Electric Light) (1968/2018) for $180,000, James Turrell’s reflection hologram Untitled (XXXII G) (2014) for $150,000, and four works by Peter Alexander for figures between $40,000 and $125,000; all works came from the gallery’s thematic stand of artists from the Light and Space and Finish Fetish movements that emerged in Los Angeles in the 1960s. The Institute of Contemporary Art, Miami is currently fêting Bell’s career with a major survey show and, on Tuesday, Pace announced that it would extend its representation of Corse, which began with only its three locations in Asia, to New York.

American collectors were the driving force behind a majority of Hauser & Wirth’s sales on day one, said partner Marc Payot. The gallery notched a handful of Art Basel in Miami Beach’s largest reported sales on day one, led by Philip Guston’s 1976 painting Shoe Head, which sold for $7.5 million; another untitled work from 1969 sold to a European collector for $2.7 million. A monumental new canvas by Mark Bradford, Feather (2018), sold for $5 million, and was promised to an American museum. Two historic pieces by Larry Bell, an untitled sculpture from 1967 and the painting My Montauk (1960), sold for $550,000 and $2 million, respectively, as did two works from this year for $100,000 apiece. The first work the gallery has offered by Amy Sherald since taking her on following the unveiling of her iconic Michelle Obama portrait sold for $175,000 on Wednesday, also as a promised gift to a U.S. museum. Other sales included a Paul McCarthy sculpture, White Snow Cake (2017–18), which went to a collection in Asia for $1.2 million, and the Louise Bourgeois sculpture Femme (2004), which went for around $2 million to an undisclosed buyer.