The Art World's Hot Investment

WENN/Newscom Despite sluggish auction sales and a general feeling of panic within the art world, last week’s Art Basel extravagance seemed to suggest that the market will be just fine. And in the case of the Old Masters, it will be.

Art is not selling like it used to. Auction houses have had a rough second half of the year—mostly in the sale of contemporary work—and galleries have been forced to lay off staff and make unprecedented staff budget cuts. Still, there are sections of the market that are holding steady.

These are not the areas one might think—the glossy contemporary art that is still selling at booze-soaked events like last weekend’s Art Basel is dwindling, while obscure works by Old Masters (i.e. all European painters from about 1400-early 1800 that you may never have heard of) continue to appreciate in value. In this treacherous time, conservative works are retaining their original prices, while avant-garde pieces can’t move stock. The more modern the art is, it is being discounted, if sold at all.

There is a distinct pleasure that comes with bucking whatever is currently hot and instead opting to own something that is of classic and indisputable value.

Despite the poor auction sales in contemporary art, dealers put on happy faces at the champagne train known as Art Basel Miami Beach. Primary sponsor UBS was still holding its annual beach party for a VIP cast of hundreds, replete with an oyster bar adorned with ice sculptures. Not to be outdone, luxury airliner Net-Jets made its mark in the sand by displaying its name alongside that of Alex Katz, the guest of honor for its opening night soiree, in glitzy HOLLYWOOD sign-like capital letters.

The following evening, the stream tumbling down a pyramid of Krug champagne flutes inside a private party at the Raleigh hotel suggested that the art market’s glass was not only half-full, it was overflowing. Who cares if it wasn’t actual champagne being poured?

The Krug party included Pharell Williams, the new owner of a $78,000 Murakami sculpture entitled "Gigantic Plush Flowerballs", along with Marilyn Manson and Marc Jacobs. The following afternoon found Jay-Z and Beyonce strolling the fair's floor, ultimately commissioning sculptor Aaron Young to produce a duplicate of his recently sold "fenceMiami", a 255-by-96-inch schoolyard fence cast in 24 carat gold.

There was a substantive cause for optimism at the fair— the reports of actual sales. In the weeks leading up to ABMB, many dealers were expecting the worst. The prevailing thought after the depressing auction results of Modern and Contemporary art at the New York auction houses in November was that the so-called “bubble” of the art market had burst in the wake of economic meltdown.

Such fears were only exacerbated by the tepid business reported in London at Frieze, the UK’s major Contemporary art fair, and troubling news from some of the market’s major players. Sotheby’s seems to be the hardest hit as of late—the company has seen its stock value plummet over the past year, and recent announcements include the loss of over $20 million in auction guarantees, and upcoming layoffs and salary reductions for its staff.