Re-Air: Why No One Trusts Art Prices Anymore

0:00Tim Schneider:The latest Artnet Intelligence Report is out, and now we're taking it live. On April 8, Editor-in-Chief Naomi Rae joins award-winning senior reporter Katya Kazekina for a virtual conversation unpacking the report's key findings. Tap the link in the show notes to reserve your spot.

0:19Aimee Chanthadavong:Hey, Kate here. As we close out another bumpy year in the art market, we're revisiting a recent episode that looked at one of the factors in play, the erosion of logic when it comes to the price of a work of art. Our editor-in-chief Naomi Rae was on the podcast with me recently, sharing what she learned about how the rules of art pricing were made and then broken, and what may come next.

0:49Tim Schneider:It could sell for anywhere between$25 million and$100 million, basically dependent on the buyer's mood. And that's a 75 million difference. It's kind of on vibes alone.

1:06Aimee Chanthadavong:I'm Kate Brown, and this is The Art Angle, a podcast by Artnet News.

1:16Aimee Chanthadavong:What's a painting worth? For art world professionals, that question of price has never been easy, but lately it's gotten harder than ever. As we've discussed on this podcast before, the art market has cooled right off. But this isn't just a downturn, it's a disruption. The system that once supported pricing is now in disarray, and dealers and advisors are feeling the strain. In a recent report for Artnet News Pro, our editor-in-chief, Naomi Rae, explored how the traditional rules of art pricing have stopped making sense. With confidence waning and speculation drying up, dealers are quietly recalibrating.

1:49Aimee Chanthadavong:And what we're seeing may be more than a correction. as Naomi reports it could be the unraveling of an entire logic. Naomi joins me to unpack what's going on in the danger zone of the art market and how different players from mega galleries to emerging dealers from art advisors to collectors are adapting. We also discuss whether we might be heading towards a more sustainable and meaningful place in the art market. Hi Naomi how are you doing today?

2:14Tim Schneider:Hi Kate I'm well thank you it's warm and sunny in London.

2:18Aimee Chanthadavong:Unusual for London, I suppose. Yes. Great. Yeah, I'm excited to dive into this. You had an excellent piece about art pricing that got a lot of reactions online and also on the fair floor at Basel last month. So we've got a lot to get into today. I'm curious, was there a specific moment or a conversation that tipped you off to the shift in the market pricing logic?

2:38Tim Schneider:It's not really a new conversation. It's something that we've been writing about at ArtNet News for a couple of years, actually. I remember, I mean, as far back as 2023 at Art Basel, I was kind of writing this first day market report. And, you know, the takeaway was a kind of overwhelming kind of dissatisfaction with this price inflation that had been going on in the market for living artists. And I think I've been interested in price just in general from a more kind of philosophical perspective. it's obviously the intrinsic value of art it's a bit of an abstract concept to begin with but you do trust in the art market that price has been kind of informed enough by kind of real world data points that it makes it a good enough proxy for value and that it reflects things like demand or kind of what something is worth relative to other similar things but when we have these kind of spirals in different levels of the market especially kind of levels of the market which are kind of pre-value getting established in the traditional way so usually you know after an artist has died you now have like a finite supply of works and so the price points kind of get a little bit more clear so whenever the prices for living artists start spiraling like this and kind of speculative bubbles start emerging around it, it can kind of hurt confidence, especially when those bubbles kind of start to pop.

4:09Tim Schneider:And I think that's kind of what interested me in general in price. I think why now writing about it ahead of Art Basel this year, I was trying to predict kind of ahead of time what people would be talking about at the fair. And we just come out of this auction season in May, which had a number of very high profile flops. There was a 70 million Giacometti that failed to sell and a Warhol electric chair that was pulled from sale. And this is kind of a new dimension to the market kind of downturn that we've been talking about, because usually the auction houses can be pretty good at orchestrating or ensuring kind of these sort of high level successes, often actually even taking a loss to do so.

4:56Tim Schneider:But, you know, this kind of failure at this top level had people sort of asking a different question, you know, not just about kind of the market. And especially in that top level of the market, people were saying for a long time that it's just a supply issue. You know, there's not enough, there's not great stuff coming up. But actually, when you get great stuff coming up and it's not selling, you start to ask kind of, is it a demand issue? And in kind of thinking about that, I was like, well, what's causing a crisis in demand? And I think certainly on at least one level, it could be this pricing situation, which is kind of, you know, when a buyer is looking at something, basically just destabilized their confidence that something's worth the sticker price.

5:39Aimee Chanthadavong:Yeah, let's get into this question of pricing, because, you know, in a normal economy, as you sort of touched on, when demand goes down, prices tend to go down. But this isn't always the same in the art business. So let's get into how an artwork actually gets priced. And why is pricing so difficult and what's happening with it right now?

5:58Tim Schneider:Yeah, it's difficult, I think, because the, like I said, the value of art is the kind of, it's an abstraction. It's not a financial reality. And so I think, I mean, there's kind of two different answers to this question. I think on the primary market, you know, whenever we're talking about living artists and a gallerist is setting prices, there are certain hard data points that they can look at, you know, market comps, you know, what something similar is sold for, how much it costs to make is sometimes factored into the price. Although, you know, that can vary wildly. I was talking to someone who was saying, yes, you can do that if it's painting practice, but what if the artist is making something like a video game and the production costs are ridiculously high and almost, you know, you can't actually make that back in the sale of the work, especially in kind of emerging markets.

6:49Tim Schneider:I think some dealers also try to offset some of the rising costs, you know, of participating in the art market with prices, you know, shipping since COVID has gotten very, very expensive. And that's kind of factored into the sticker price. And then I think, you know, So the way prices go up is they look at sort of signals from the art world establishment, if you will. Things like institutional recognition. Did they get a museum show? Is there a publication written about them? Have they had, you know, positive, critical reception and kind of justify sort of prices going up from there? But in the end of the day, I think it is kind of what somebody is willing to pay.

7:34Tim Schneider:So I think a gallerist will need to know their clients, their tastes and expectations. And I think to a certain degree, the lifestyle enters into this. Some collectors are perfectly happy to pay an inflated price for an artwork just as kind of the ticket to ride in some of these exciting events in the art world. And the secondary market, similarly, there are hard data points. There's historical sales. But I had a very interesting conversation when I was in New York in early spring with Brooke Lampley, who is a former auction house executive. And she was a, people overuse this term, but rainmaker at Sotheby's.

8:17Tim Schneider:And now she is working at Cagosian. And I was asking her about selling and kind of pricing. And she had some really interesting things to say about how, you know, you can have as many hard data points as you want. And of course, they are important to kind of ground you in a sense of reality of kind of what something could be worth. They don't reflect the market. The market is kind of a very now kind of thing. And you need to be very attuned to the ebbs and flows of tastes and, you know, everything from knowing kind of what sort of colors people prefer. I think she said people prefer red than they do green to understanding that, you know, generally things can go up in price as they get bigger.

9:01Tim Schneider:until they get too big and you can't fit it in your living room. And then it, you know, becomes less desirable to certain types of collectors and things like that. It's a combination of, you know, numerous data points, you know, met with kind of an understanding or grounding in the market, kind of knowing what people want, basically.

9:21Aimee Chanthadavong:So a mixture of hard facts, some abstract elements, and then a lot of theatre as well around all of it. And as you point out, you know, with all of these rising costs, I mean, the galleries are working with like razor thin margins. I mean, there's also staff labor, like everyone who touches that painting is getting paid from somebody. Storing work is expensive. Framing work is expensive. But you touched on the secondary market, which is an important one for establishing price. As you mentioned, Artnet's price database is a very important player in that. Could you talk about like price transparency a little bit more?

10:00Tim Schneider:Yeah, this is kind of a story I like to tell just whenever I'm explaining to people that I work at Artnet and kind of what Artnet is or what it was founded on, which is this database of prices. And I spoke to Hans Neuendorf, actually the Artnet founder for my piece, and he told me a little bit about what it was like when he was starting out in the art market in the 80s and kind of people doing their own independent pricing research. They didn't really know what anything was worth or, you know, in that market at that time or, you know, how to price something. So they'd be going to art fairs and doing their own kind of personal research and taking notes, comparing notes.

10:36Tim Schneider:And Hans and a number of other people in the market at the time, you know, saw an opportunity there for a sort of database that you could sell access to that would record prices. And I think, you know, having that information, that's the hard data points that we were talking about. It brought kind of transparency to what was a very, very opaque market. market. And I think with transparency comes confidence because, you know, if you are a buyer and you are looking at this Picasso painting and you're not sure, you know, how much to sell, you could look it up and say, oh, you know, here's another Picasso painting of the same size, the same year, similar, and it sold for this amount.

11:17Tim Schneider:So you're kind of comfortable within a range of that amount. So it brings you kind of confidence and assurance and that, results in more buying, which means more selling. And as confidence grows, you get more comfortable paying a little bit more than that, et cetera, et cetera. That's kind of the role that the price database played in all of this. I think people have different ideas about whether transparency is a good thing or a bad thing. I think especially when you have a market like this, where prices got very inflated and, you know, that can be devastating for people in many different ways.

11:57Tim Schneider:They might not be so happy. But I think as a journalist, I'm inclined to say that transparency is a good thing for the market. Obviously, if I were a collector that was trying to offload an artwork and having to accept a price that's a fraction of what I bought it for, you know, a couple of years ago, or if I were an artist whose career trajectory is now kind of thrown into uncertainty after a speculative bubble has burst? I might have a different answer to that question. Right.

12:25Aimee Chanthadavong:Well, that's something that's been informing this kind of disarray, right, is that there was this prolonged period of time where prices were just climbing at this very steady rate. And that's an excellent atmosphere in which to be a speculator and to try to make money off of trading art. But as you reported in your piece, this has really changed. and especially the$80 ,000 to$800 ,000 range has been this so-called danger zone, according to someone that you spoke with. Why is that particular slice of the market so unstable right now?

12:58Tim Schneider:It's a danger zone for anybody who's looking to kind of purchase art as an investment right now. And that is because of this price inflation for living artists, this issue that I've been talking about. In this price range, I'm 80 to 800 or 100 to a million. I'm not really sure. It's sort of fuzzy around the edges how to define that. But I'm talking about middle market artists who are living, but they're more established than completely emerging artists. So they may have a few institutional shows and publications and those kind of art world or signifiers that we talked about to their name. um so you know their markets kind of grew quite quickly because they are perceived to be a little bit more of a safe investment um than you know a complete unknown where you you really are kind of taking a risk or trusting your eye you know that they will take off so they've already had like a little bit of liftoff um but because they've gotten so expensive now it isn't really the kind of safe environment that it was before.

14:01Tim Schneider:This kind of spiraling speculation, which was encouraged by dealers who were raising the prices quickly and really selling this narrative of art as investment, got out of hand. So you're not able to resell those works for what you paid for them, or you have that inventory that you can access cheaper at auction, which is not how it's meant to work.

14:27Aimee Chanthadavong:Right. And what kind of artists are we talking about when we are speaking about this range? Are there some recent examples from like the spring sales or anything like that?

14:36Tim Schneider:Yeah. Yes. Yes. Looking at Art Basel specifically, I can say that Jenna Gribben, she's an artist, painter, a talented painter, you know, who had a very good 2023 market was very, very hot. I think her auction record is, you know, up there in half a million or something like that. But, you know, her prices, the auction prices have come down. I think there was a painting being offered by Massimo Di Carlo at 250 ,000. You can find her work at auction now for cheaper than that. And similarly, I think Levi Corby Dayan was showing another painter, 36-year-old Austin Weiner. And one of the works was available at 280K asking price.

15:19Tim Schneider:It's very expensive for these artists in that kind of period of their career. And you asked about the auctions, the May sales, I guess not so recent, depending on how you look at time in the art world. It's very accelerated. there were a lot of these stories I think a lot of the kind of ultra contemporary artists who got very hot we saw a number of them kind of being resold at heavy losses for their owners I mean I don't want to pick on Rashid Johnson because I feel like we've done that enough but you know there was a big number you know there was a painting by Rashid Johnson that that someone sold at a 72 % markdown on the price that they'd purchased it for, you know, just a few years earlier.

16:06Tim Schneider:So that's what's happening.

16:09Aimee Chanthadavong:Right. Not to pick on the artist at all, but it's just this cautionary tale of, you know, speculation and the heights from which you can fall.

16:25Aimee Chanthadavong:you've talked about this a little bit in this last answer like dealers seem to be in some cases not recalibrating their prices at all but they're sort of clinging to the old old stickers while the auctions are saying something completely different but are they in some cases putting their prices down?

16:43Tim Schneider:Yeah, I mean, prices are going down. Whether or not gallerists are sort of writing, oh, this is at a markdown price, you know, obviously for all to see. No, I mean, asking prices for things that have asking prices are ostensibly staying the same. But, you know, I think dealers are more open in this moment in the market to be accepting, you know, more aggressive offers or bigger discounts, they might be slower to raise the prices. If they've been raising them every year, they might be a bit more hesitant to raise them this year or next year until the market catches up a bit. I mean, there's always stories you can tell.

17:19Tim Schneider:So I think, you know, bringing prices down is like, that's not the story you want to tell. Like this isn't worth, you know, what it was. But you can say something else like, oh, you know, if you have one show from an artist that doesn't sell, you know, the next show, it's a different body of work. So the price point is it's different you know you can say the materials are different etc etc there's stories you can tell to kind of navigate kind of shifting uh price points but yeah i think more broadly what galleries like the bigger kind of thing that needs to shift uh isn't just kind of the sticker price but i think it's the pitch you know i think this this period this art market bubble galleries we're really pitching art as an investment.

18:04Tim Schneider:And in many ways, that's a very lazy pitch, but it works, you know, you can make, you know, the future upside, you know, that's an easy thing to sell on. And I think now they're realizing that they're going to have to find, you know, another pitch. You know, this is the other kinds of value that's not necessarily linked to, you know, making a profit on resale. And I think that's going to be challenging.

18:32Aimee Chanthadavong:Mm-hmm. Is it pushing things more into private sales as well?

18:36Tim Schneider:Yes, I think. I mean, people are less likely to take a risk at auction. Then you will see more because auction is a public failure. Private sales, you kind of have that cloak. But I'm interested to hear from you because you were at Basel, Kate. What you kind of heard on the ground, you know what were were dealers what was it like yeah I mean pricing perhaps strategically was not

19:03Aimee Chanthadavong:like an overt conversation at Basel this year but it was definitely the subtext I would say I think it was more so about vibe like people were talking about who was there who wasn't there and whether things were moving so you know price is in there but it wasn't really like overtly being spoken about. And I think that what my takeaway was is that galleries are restraining their expectations, they're bringing different things and different kinds of works, and they're adjusting their programs as such. So yeah, I mean, I think the data points just point to a shifting psychology. I actually, you know, was running the numbers on our price check reports, which are far from perfect data, because they depend on what dealers tell us.

19:45Aimee Chanthadavong:And of course, the prices that they tell us are not necessarily considering discounts. And of course, sales are made without being reported at all. So it's not perfect data. But what was interesting to see was that between 2024 and 2025, the danger zone was actually in the extremes. Like on the high end, those who did bring major, you know, trophy inventory, there were few sales reported by the close of the fair as compared to the year before. So that can mean a lot of different things. And again, stressing that it's not perfect data. But I think the other thing that was interesting was that this 80 ,000 to 800 ,000 rose a bit from last year, but it was also a lot more fresh to market pieces.

20:24Aimee Chanthadavong:Like a lot of work that was made in 2024 was sold and 2025 was sold at Basel this year. Then in 2024, there was fewer work sold in 2023 and 2024 with like that year on the painting. So, so things are shifting. Yeah.

20:39Tim Schneider:That's so interesting. I think that price point, the danger zone price point was also the most dominant price point at auction in 2024. Although according to Artnet's data, other sales did still decline kind of 22.5 % year over year. So it is shrinking. But yeah, I think, I mean, people are still buying in that price range. I think what I'm saying is it's just not necessarily the smart place to buy right now. I think some people don't care though. I think like some collectors just accept this. You know, this is the price of the lifestyle, you know, the gallery dinners and the glitzy, you know, participation in some of these art world events.