Far removed from the traditional narrative of a vibrant and sustained bull market in the last decade, the art market experienced a substantial crash in 2008, perhaps related to the concurrent worldwide financial crisis. Prices of contemporary, modern, and impressionist artwork decreased about 30%, and Sotheby's and Christie's saw their share prices plunge in reaction to the decrease in global consumer confidence. Statistically, it appeared that art wasn't as uncorrelated with the market as previously though. In theory, the wealthiest consumer constitute the bulk of the visible art market, and a large proportion of the value of artistic pieces are subjective and based on perceptions of wealth and status. More than anything, however, is that art is purchased with disposable income – it is not a necessary good, does not have tangible value, and provides no daily benefit. It is mostly aesthetic, decorative, and its value is extrinsic. In other words, in times of recession, when disposable income decreases and households opt to move cash flows into savings, luxury goods like art are the first to go – in this sense, the art market may be highly correlated with the economy, assuming that its wealthy consumer base is sufficiently affected by recessions. During the recession, several predictions took place. Cutbacks and reorganization of major art organizations like Sotheby's were announced, with focused, targeted sales replacing the mass-supply models of the past. Guarantees by auction houses would be reduced, placing more of the risk of selling onto the collectors and galleries. Galleries trimmed there collection of art and artists, closed exhibition spaces, and generally downsized their operations. Artists saw their prices command fractions of what they could achieve in the boom years, which was as predicted. Veteran painters still sold well, but the majority of artists lost potential capital, with noted artist Takashi Murakami canceling a scheduled solo show at Sotheby's entirely. Art sales amounted to nearly $800 million, however, which would have been a robust number even five years prior; some critics claimed that the robust sales in the wake of a recession were a sign of strength, not weakness, and offered very fair prices for collectors. Collectors in general, while seeing the value of their collections fall, still felt the urge to collect, and overall market prices generally held, suggesting that perhaps the buyers in the art market had the capital, drive, and determination to weather the market recession after all.
Indeed, many claimed that the correction was not as bad as was predicted in the art world. The current art market is systemically different to what it had been in recessions prior, specifically in the 90s, There are many more buyers currently than there had been in the past, offering greater liquidity and investment capital, and greater probability of sustaining demand in times of recession. Probably the only players who truly left the market were the speculators, hurt by other diversified investments that took a hit in the global recession, and "would not be missed" by the rest of the art world. The art market is a much more global affair now, and as a result it is much more able to withstand financial and economic downturns, and much less susceptible to shocks from small segments of the population, such as the Japanese criminal activity of the 90s.
All in all, the art market is definitely maturing, as we have shown, and is more able to sustain itself during natural fluctuation; however, it still has space to grow in order to finally become a modernized economy.