Before I became a full-time artist, I had a career for nearly twenty-five years in mortgage banking. I woke up each morning and was at my desk between 6:30 and 7:00 a.m. to see what was happening on the east coast in the financial markets. That was the first indicator if it was going to be a good day or a bad one. The second indicator was weeding through an almost unmanageable number of emails from my colleagues on the east coast and rearranging my schedule to accommodate the knee-jerk reactions of the middle managers clawing their way through egos of the upper managers for a meager ration of attention.
Although I don't immediately look stare at numbers in the morning, the economy has a strong impact on artists. Why? Because it dictates where people want to invest their money, if they have any left over from their tanking stock portfolios. My experience in the money markets give me a somewhat broad view of both the business side and the creative side of art.
It's undeniable: our economy is still hurting. Disposable income is diminishing and artists always feel the pinch early on. America is now firmly and uncomfortably ensconced in a new economic era. Not that long ago, the economy took a massive nosedive into the toilet and the mother of all flushes began to play out.
We had been living on borrowed money for too many decades. Banks loosened guidelines for mortgages so that a lot of people ended up in houses that couldn't possibly afford. We used many of those worthless mortgages as collateral for all kinds of speculative and unregulated "derivatives" like Credit Default Swaps to trump themselves up even more mountains of imaginary money. It doesn't take a rocket scientist to realize that imaginary money can't pay bills. It has been humbling to many that have lapsed into a resigned state of realization. We are worth a lot less than we thought we were.
How does this sad news shake out in artland? On the buy side, less money, more regulation and tougher credit mean that discretionary capital (and the ability to access capital in general) has shrunk. As we all know, one of the great discretionary luxuries in life is art, and for many galleries and artists, selling it has become a lot more challenging than it's been in quite a while. To complicate matters, many so-called "art investors" who attempted to cash in either all or part of their pre-crash collections in order to raise quick cash when the economy scurried south were instead gifted with the rudest of awakenings, aka their art was far less liquid and at far lower prices than they thought it was.
According to one report I read, fine art was the worst performing collectible last year, with prices down 3 percent. The performance is based on an index from Art Market Research, which includes old masters, European 19th century, impressionists, modern and contemporary. The report said the overall art market is still down from its 2011 peak. Granted, over a 10-year period, art is still a good investment, according to the report, with a return of 193 percent.
You still need to have the cash right? There are those that still have money in a bad economy. Art is still popular with the wealthy who see it as more than a financial investment. The survey showed that among people worth $30 million, art is "growing in popularity"." Art is the most popular class of collectibles. It is just not very affordable for those of us paying rent and living one pay check away from disaster.
Art was followed by wine and watches, suggesting that pleasure matters more than profits when it comes to collecting. Cars were the best performing collectible in 2013, up 28 percent. Cars are also the top performer over a 10-year period, up 456 percent. That should make Jay Leno happy. If he spends all his money, he can sell all those cars.
Artwork is a commodity just like any other, and just like any other, prices fluctuate. As we learned in the real estate market, that does not mean they always go up; sometimes they go down. They go up when money flows freely and supply gets tight; they go down when money dries up and studios, back rooms, and storage spaces begin to bulge with artwork. The moral of the story? A high tide raises all ships. You find out who isn't wearing pants when he tide goes out.
According to one report I read, fine art was the worst performing collectible last year, with prices down 3 percent. The performance is based on an index from Art Market Research, which includes old masters, European 19th century, impressionists, modern and contemporary. The report said the overall art market is still down from its 2011 peak. Granted, over a 10-year period, art is still a good investment, according to the report, with a return of 193 percent.
You still need to have the cash right? There are those that still have money in a bad economy. Art is still popular with the wealthy who see it as more than a financial investment. The survey showed that among people worth $30 million, art is "growing in popularity"." Art is the most popular class of collectibles. It is just not very affordable for those of us paying rent and living one pay check away from disaster.
Art was followed by wine and watches, suggesting that pleasure matters more than profits when it comes to collecting. Cars were the best performing collectible in 2013, up 28 percent. Cars are also the top performer over a 10-year period, up 456 percent. That should make Jay Leno happy. If he spends all his money, he can sell all those cars.
Artwork is a commodity just like any other, and just like any other, prices fluctuate. As we learned in the real estate market, that does not mean they always go up; sometimes they go down. They go up when money flows freely and supply gets tight; they go down when money dries up and studios, back rooms, and storage spaces begin to bulge with artwork. The moral of the story? A high tide raises all ships. You find out who isn't wearing pants when he tide goes out.
The other lesson here is painful for us artists. You have to make your work indispensable to your potential buyer. We need to acquire better marketing habits and get flexible about art pricing. You have to think about your audience. Be relevant. An large-scale installation making a statement is powerful but may not be something that attracts many buyers. I am not saying that you should stop making art for which you have a great passionate message, just make some saleable stuff too.
Acquiring better marketing habits means going after the people who have supported your work in the past: family, friends, and collectors. Use social media. Find ways to reach more people for less money. Make more affordable art. Small sales generate loyal buyers and will keep you encouraged. Prints are even better, as you can sell them for $50 a pop and still hold onto the original artwork and weather the storm of a bad economy.
Though art prices fluctuate, remember this doesn't reflect your value as an artist. Use this downturn in the economy as an invitation to focus on the things that really matter in life: family, friends, inspiration, and art.
By: Renee Bangerter
Acquiring better marketing habits means going after the people who have supported your work in the past: family, friends, and collectors. Use social media. Find ways to reach more people for less money. Make more affordable art. Small sales generate loyal buyers and will keep you encouraged. Prints are even better, as you can sell them for $50 a pop and still hold onto the original artwork and weather the storm of a bad economy.
Though art prices fluctuate, remember this doesn't reflect your value as an artist. Use this downturn in the economy as an invitation to focus on the things that really matter in life: family, friends, inspiration, and art.
By: Renee Bangerter
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