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Art advisor Todd Levin on the growing art market bubble

Art advisor Todd Levin

In a video over at Fortune, art advisor Todd Levin talks about the current art market bubble, and how growing income disparity in the West has precipitated vertiginous record art auction prices that cannot be maintained. It’s illuminating to hear this from the perspective of an art advisor.

Do people hope that an art work that they buy today will be more at sometime down the road? I think I would be disingenuous to say anything other than of course, anybody would hope that. Fundamentally, the market hasn’t changed that much in the last 10 or 20 or 30 years, what has changed is the amount of money sloshing around in the market, and that’s due to an excessive amount of excess capital in the hands of a smaller group of people. They’re certainly not going to put it in a bank at 1%, they’re certainly not going to hide it in their mattress, so they need to find assets. Art has been a favored location to place a portion of one’s assets. There has been a strong interest lately in flipping. Collectors buy extraordinarily young art and then immediately putting that up at auction and flipping that work for five, ten more times than they initially purchased for only six months, a year or two ago. If somebody has a work of art, they will take it to Sotheby’s and/or Christies and get what is called an auction estimate, and that estimate will be what the auction house believes what that item will sell for. Then there will be a discussion as to whether the persons who owns this piece wants to sell it outright or if they would be interested in a financial guarantee. Whether the piece sells or not they are absolutely guaranteed a certain amount of money no matter what happens.

Image via Fortune

The benefit of guarantees for auction houses is at its core that they can attain the work that they’re trying to get for the auction. They’re in direct competition and its a very, very tough game to get the very best, very high quality work. In order to do that they simply have to belly up to the table and pull out their wallet. These guarantees are fundamentally the steroid of the auction world, and so these things can be very addictive. The auction houses are experiencing a situation where every auction total is higher than the last and these vertiginous upward prices can’t be maintained forever. Some day, the music is going to stop, and somebody’s going to be found without a chair to sit on. And that’s going to be a very hard day.

What’s your take on Levin’s thoughts? How long can this bubble last?

I just hope is bursts very soon, so it can give way to a healthier market that does not depend on auction houses and the greed of a very small group of people who are only interested in profit, not in art.

Hi Karen: Todd Levin here - thanks for the shout out on this recent quickie video thing I did for Fortune. I just want to be clear, regarding Bernardo’s comment above, that no collectors I know of are only interested in profit alone, and not Art. The truth is that both interests coincide simultaneously. To suggest that they do not is just knee jerk whining. Having said this, however, there is a real problem with the flipping of recent work made by younger Artists, and it’s a practice I would certainly like to see at least slowed down by the auction houses. T

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Of course I’m generalizing, I’m sure that there are many collectors (probably and especially from older generations) that have a true interest in art. However, as a young artist myself, I sense that the drive for profit is too much in the forefront of the art market, starting from the artists’ attitude themselves. Even when you go to artist run gallery openings these days, people (in general) are not having beyond worldly discussions about the human condition, they are more worried about how to get “ahead”. I find this very depressing. I believe that a lot of this behaviour has to do with the current market model of auction houses, that makes people wanting to “get there”. Thus, everything that hints for change of this model makes me optimistic as (on an apparent contradiction) there’s also a seemingly weariness about it. Of course we need market, nothing can be done without it, we just need a more open model.

Lets face it, Todd Levin is only saying what everybody already knows “the market hasn’t changed that much in the last 10 or 20 or 30 years, what has changed is the amount of money sloshing around in the market”. And what he has to say here about an art bubble is what everybody is already thinking as inevitable. However, considering that Jerry Saltz, who is probably the most famous art critic in America, coined the phrase ‘Zombie Formalism’ to call out what has been happening in the Arts- Todd’s comment "knee jerk whining2 about karen’s comment “the greed of a very small group of people who are only interested in profit, not in art” just sent his credibility crashing to nil point. http://www.vulture.com/2014/06/why-new-abstract-paintings-look-the-same.html

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@magwitch: I think we all need to get some facts straight here first before I respond. 1.) Jerry Saltz did not coin the phrase ‘Zombie Formalism’ as you incorrectly state - that distinction goes to Walter Robinson (or perhaps Martin Mugar). To wit, I participated on a panel discussion about ‘Zombie Formalism’ at The School of Visual Arts with Walter Robinson that was moderated by Artist and SVA faculty member Amy Wilson in December 2014 - https://hyperallergic.com/169198/who-has-the-cure-for-zombie-formalism/ 2.) My comment referring to “…knee jerk whining…” was directed at bernado’s first comment (and as one can see he then later qualified his initial comment by saying “Of course I’m generalizing…”). Now on to your commentary itself. First, I think many/most younger Artists, collectors, gallerists, and advisors do think that the market has changed tremendously in the past 10 - 30 years, because they have no first hand experience of the market in the 1970’s/80’s/or 90’s. This lack of experience causes younger participants to believe that the market is now almost detached from other outside forces, because for the most part they have only seen a vertiginous rise in the market since 2000. And they would be very very wrong. My comment regarding the ‘bubble’ you refer to is specifically directed at the concept of auction house guarantees, not the Art market as a totality - that is an entirely different matter that I do not address in this video. I suggest that next time you don’t assert facts which are clearly incorrect, and read much more carefully before commenting. And any time you want to have a public face off about the Art market to see who’s “…credibility (is) crashing to nil point…” just let me know, kiddo. Because you sound like you’ve got a lot more hot air than wisdom.

automatan structuralism, crapstraction, zombie formalism,
call it what you may
a bushel of young artists are driving expensive sports car, buying buildings, and even marrying up;
not bad for a bunch of undereducated , overstimulated at a young age, art school saludictorian’s

god speed,

that was an embarrassingly sad ill constructed swipe…

Just stumbled upon this conversation. Perhaps it’s time to pull the curtain slightly back.
Levin is yet another cultural vampire consciously or perhaps unconsciously colluding with the rest of the look·y-loo’s to turn a profit on cultural producers. True this failed musician
's knowledge of the market is tried and true but his observations and opinions are obvious and pander to the middle. How does the old adage go? “Those who can’t do, sell” . His eyes are alright sometimes but mostly hits clinkers. Advise to artists, don’t worry too much about the gas these windbags are spewing. From Levin to Saltz ,take it with a grain of arsenic . Just check out there FB pages to see what I mean. Pleanty of nervously posed photos with the beautiful people desperately hoping to fit in. (to his credit Saltz did post his bank statement) . Levin can’t go there…I’m sorry to report even though we are all grown up, it’s still high school in the art world. Why the band geek still want to hang with the homecoming king is beyond me. Keep up the good work, you have us in stitches . The rest of us are just fine making stuff for you to consume or ignore.

Just stumbled upon this conversation again, after my initial participation above. To ‘cremate’ - Perhaps it’s time for me “to now pull the curtain slightly back.” I don’t “collude” with anyone. Nor do I have to. After almost 40 years in the Art world, I think my public record speaks for itself. Unfortunately, your record (such as it is) can’t speak for you, because you hide behind a cloak of anonymity, and won’t even admit to your own opinions or offer up any of the “fine stuff” you say you create for my (and/or others) review and criticism (talk about someone who “can’t go there”!). My “advise (sic) to artists” is to never listen to anyone, whether artist or advisor, who hides behind a pseudonym when offering their opinions.

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