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According to the NYT art prices have ‘reset’ to 2004 prices. Erm, so that’s not too bad is it?
Quote:
“Looking at this data, the art world is resetting prices to 2004, 2005,” he said. “It’s not resetting to the late ’90s like stocks, but it’s resetting.”

Not all art at auction is suffering equally in the downturn. During the first quarter, the Mei Moses impressionist and modern art index, for example, fell only 4 percent.

Marc Porter, head of North America for Christie’s, noted that the February sale of Yves Saint Laurent’s art collection in Paris had broken records — bringing in more than $260 million. The prices fetched for his German silver collection, Mr. Porter said, were particularly strong.

But if there was one thing the titans of the last boom did not buy it was German silver. The bull market in stocks, which ran with a few bumps for 25 years, drove interest in contemporary art. The past five years were particularly frothy, but now the global recession is reversing this. Prices are falling as never before.

The picture is bleakest for art bought recently, Mr. Moses said. At the four auctions that Christie’s and Sotheby’s held in New York this spring, the return on 32 paintings that had been held for less than four years was a negative 16.8 percent. By contrast, the average return for 55 paintings that had been held for more than four years was 5.4 percent.

“Once again this illustrates the difficulty of being a short-term trader in art, especially when you are buying at the end of a period of excess returns,” Mr. Moses said.

Randall Willette, founder and managing director of Fine Art Wealth Management in London, agreed. “Since September 2008, the market has changed considerably,” he said. “Lehman Brothers had a huge impact on hedge funds and private equity; it had a huge impact on art as an alternative investment.”