Demand for young artists' work is bowed but unbroken in top auctions

This column was originally published in The Art Newspaper’s May 2024 issue.

Only days before this year’s top-end spring auctions in New York, it is more widely believed that bidding for young art has broken down than that it has held up. Saying otherwise, however, are both the sales data and recent structural changes to the marketplace—changes accelerated by Christie’s and Sotheby’s decisions to reconfigure their marquee sales around newer art in 2021.

That May, Christie’s staged the first of its major New York evening auctions under a new organising principle. Rather than team its familiar Impressionist and Modern art sale with its post-war and contemporary sale, the auction house split its offerings into 20th-century versus 21st-century art, with the latter encompassing works made from the 1980s to the present. The shake-up has applied to its marquee auction weeks in New York, London and Hong Kong ever since.

Sales restructuring

Sotheby’s announced a restructuring of its own in October 2021. In place of its two marquee evening sales during the pre-Covid-19 era—Impressionist and Modern art, alongside contemporary art—the auction house would stage a new troika of evening sales in New York each November and May. Its Modern auction would offer works made from the late 19th to the early 20th centuries, its Contemporary auction would include pieces from the post-war era to the late 20th century and its The Now auction would focus on art made by living artists. Sotheby’s also began holding versions of the three sales during its premier auction weeks in London in 2022 and in Hong Kong this April.

Three years on from the first of the reconfigured sales at Christie’s, the trade and its mood have downshifted. Data from ArtTactic, the market analysis firm, covering Christie’s and Sotheby’s marquee evening auctions in New York, London and Hong Kong pinpoints the extent of the change. The total sales value of works by young artists—defined as those under the age of 45 at the time of each auction in question—rose nearly threefold year on year after both houses restructured their sales, from $71.4m in 2020 to $213.2m in 2021. But last year, the same demographic generated only $110.2m—a drop of nearly half in two years.

At first this may sound like proof of a burst bubble sending the art market hurtling toward rock bottom. But the $110.2m made by these younger artists’ works in the premier evening auctions of 2023 still topped the equivalent total in every year since 2015 by at least 50%, with one exception: the $122.9m brought in 2019. More importantly, evolutions among the auction houses, collectors and museums make last year’s results more likely to mean the worst is already over for this segment than that the bad times are just beginning.

The rise of ‘institutional darlings’

The dominant view of the art trade still turns on an overstated binary. It holds that speculative buyers rampage to unproven young artists during market booms, even sucking some seasoned collectors into the mania. But when conditions worsen, the speculators vanish, and the committed buyers redirect their spending to blue-chip artists, from the Modernists to the post-war greats, starving the auction market for almost any artist not of retirement age.

The reality is more nuanced in 2024. Between the poles of classic contemporary artists and high-risk, high-reward emerging artists is a third group. Its members are still young enough—typically no older than their mid-40s—to tantalise with significant market upside yet already museum-pedigreed enough to position their works as plausible stores of value. Examples include the late Matthew Wong, Salman Toor and Toyin Ojih Odutola. Most, if not all, of them have benefited from the nascent urgency felt by many institutions to exhibit and acquire work by fresher faces, particularly from historically under-recognised demographics.

Isabella Lauria, the head of Christie’s 21st-century evening sale, says contextualising rising stars with blue-chip contemporary artists and reliably desired midcareer ones was “one of the informing factors in creating the 21st-century sale”. But market heat alone is not enough to warrant a consignment: “When we decide whether to include any ‘wet paint’ artists, we’re asking ourselves: is there institutional backing? Are people interested beyond just what you could trade it for later? Are these artists that are going to remain relevant?”

Lucius Elliott, Sotheby’s head of contemporary marquee auctions in New York, says each iteration of The Now has skewed further toward prioritising “institutional darlings”. Unlike so-called market darlings—young artists whose notoriety comes almost entirely from their work being rapidly resold for large profits—institutional darlings have youth, buyers and museums on their side. Offering their work “makes sense in a slightly less bullish market”, Elliott says, because of the “reassurance” provided by their institutional stature.

The rise of institutional darlings may help explain why auction houses and their clients have stayed committed to young art during the recent correction. According to ArtTactic, the number of artists under age 45 with works offered in a marquee evening sale at Christie’s or Sotheby’s reached a new high of 100 in 2023 after growing for five consecutive years. The 221 works by such artists sold in these auctions last year ranked second since 2015, behind only the 267 sold in 2022.

The auction houses’ internal figures show that the demand has sustained in this segment, too. Sotheby’s, for example, has averaged 5.5 bidders per lot in the New York iterations of The Now sale, around 75% more than in its traditional contemporary evening auctions, Elliott says.

Diversification

While the restructuring of Christie’s and Sotheby’s marquee evening sales has diversified the ages, genders and ethnicities of the artists featured there, it has also led more buyers to consider categories they may not have otherwise. Emily Kaplan, Christie’s co-head of the 20th-century evening sale, notes that the pre-sale exhibition periods and the premier auctions for the Impressionist and Modern works used to take place on different weeks than those for their post-war and contemporary counterparts. “That really divided collectors’ attention. You had to pick which week you were there for,” she says.

In contrast, the 20th-century and 21st-century offerings go on show concurrently and under the hammer the same week. The single exhibition and sale period has enabled buyers to “see everything all at once”, Kaplan adds, organically promoting cross-category collecting. Of the more than 800 bidders across all 20th-century evening sales to date, more than half have bid on both post-war lots and Impressionist and Modern lots, per Christie’s data.

Sotheby’s has consistently seen a similar phenomenon for the work offered in its The Now auctions. “I thought it would be a hip young crowd of people who would be vying for it,” Elliott says. “I didn’t foresee that collectors in their 60s, 70s and 80s who had bought young artists in earlier generations would be moved to do so again.”

Market convergence

Freya Stewart, the chief executive of the art finance division at advisory firm the Fine Art Group, downplays the impact of Christie’s and Sotheby’s recategorisations. “Collectors that we work with are more savvy than to be influenced by these adjustments,” she says. But the group and its global clientele have “found it beneficial that the houses have adjusted sale timing to allow at least two, if not all three regions, to bid live in sales,” Stewart adds, referring to New York, London and Hong Kong.

This transcontinental convergence also shows up in the data. ArtTactic’s analysis finds that the auction houses and the bidders in these three markets have all behaved roughly alike in Christie’s and Sotheby’s marquee evening sales from 2021 until 2023. Almost every time one city’s results moved one way in one metric, the other two moved the same way by about the same magnitude relative to where that metric had been the prior year.

“What this tells me is that the three markets feed off each other,” says Anders Petterson, the founder and chief executive of ArtTactic. “This seems to be happening across the board for the young artists – success in one market is quickly replicated across the three major geographical locations.”

Frozen pie

Yet new art’s gains at auction have come at a cost elsewhere. Despite rises in the sales value of works by artists under age 45, the volume of such lots sold and the number of such artists included in the marquee evening sales since 2020, the corresponding figures for these auctions overall have been flat for nearly a decade. “The pie hasn’t been growing for years,” Petterson says. He notes the $5.9bn in total sales made at Christie’s and Sotheby’s marquee evening auctions in 2022 edged the previous apex of $5.8bn in 2015—but the change was “negative in real terms” after inflation.

Petterson says the data reflects a “reallocation” among bidders, not a market expansion, as younger buyers with fresher taste gradually replace the baby boomers. “The top end of the art market is pretty much a zero-sum game at the moment,” he adds.

If millennials and zoomers continue taking up their elders’ auction paddles, it will further reinforce institutional darlings’ grip on the marquee evening auctions. Contrary to the trade’s dogma, however, young art is already doing its part to keep Christie’s and Sotheby’s sales out of the danger zone amid the larger downturn. “The depth and breadth of this market is so much greater to my understanding than the previous so-called bubbles,” Elliott says. “A significant number of people have bought into the art of this century in a meaningful way.”