Though my crystal ball is cracked and I’ve shaved my Nostradamus beard, I have some thoughts on 2022 from the perspective of an art publisher who is in constant dialogue with artists, collectors, galleries, and art experts.
Everyone is in agreement that all bets are off for predictions in the event of another massive lockdown or spread of the virus, but we’re observing that people are starting to normalize and gain confidence in being out and about.
Money in the Marketplace
Though there will always be people who never seem to have enough money, it appears that money has become a secondary issue for some others. Most people remained employed, but the employed were not traveling or dining out, meaning they may have a significant amount of disposable income. Many who were business owners received PPP benefits, and others received extra compensation from unemployment.
During the lockdowns we saw a substantial increase in home upgrades, remodeling, painting, redecorating, and art buying. One can only stare at the walls for so long before needing something new to hang on them. Additionally, a substantial number of people have chosen not to commute and now work from home, so a lot of love and care is going into home office spaces.
For 2021 and 2022, those who own businesses can depreciate 100% of the cost of tangible business goods, which means that items that would normally be depreciated over their lifetime of several years can be depreciated this year. This tax law gift happens only this year and next, though this year has more favorable terms. Galleries are pointing out these benefits to people who are decorating offices or home offices — it can add up to a serious reduction in actual cost. (Check with your tax specialist for details; I do not give tax advice.) This should also apply to tangible items for art studios like easels, furniture, etc. Also note that gifting benefits can apply to art if you have a collection to gradually leave to your heirs over time.
Though most of us were up to speed with online buying even before the pandemic, the rest of the world, much of which was not up to speed, has now caught up. After being forced to buy essentials online, a full generation of non-online buyers are now buying online and getting more comfortable with substantial online purchases. Galleries and artists not offering online buying should take note.
Also, online buyers do not suffer inconveniences like “e-mail me for the price,” or “price upon request.” You can build and buy a Tesla online without ever talking to a human, and the same should be true for art. We’ve seen galleries making sales of highly expensive paintings without ever speaking with the buyer.
Two issues dominate the holiday giving market: Many families will be together for the first time in a year or two, so many are gifting at higher levels. But at the same time, last-minute buyers may be left without options as they enter stores, even online stores, and find limited choices or bare shelves. Galleries and artists would do well to point this out and remain highly visible throughout the season, stressing last-minute shipping.
Impacts of Inflation
People who are sitting on a lot of cash are seeking places to put that cash where it will remain valuable in spite of inflation. Housing and real estate are always popular, but art has also historically been a hedge against inflation. Investors seek assets that go up in value, protect their cash, and can easily be liquidated. Historic art and investable art are already seeing an uptick in sales.
Again, a provision in the 2020-2021 bonus tax code is that tangible assets can be depreciated 100% in the first year. That means office furniture, equipment, and art may be acquired for considerably less cash investment once the bonuses are used. (Check with your tax professional.) This also makes a case for art sales as a hedge, at a discounted (to the buyer) depreciation rate.
A massive migration is taking place across America. Pandemic fears, not wanting to be locked down, social concerns regarding the safety of communities, and higher taxes have resulted in a massive migration out of bigger cities into small towns and into states like Texas and Florida. New York City has been hit the hardest, with city dwellers moving to surrounding counties and to Florida. A migration away from California is also occurring — or, at least, away from the big cities. This has brought rapidly rising real estate prices as populations have doubled in some Florida and Texas communities, as well as higher housing costs in previously reasonable small towns. Moving companies are backed up for months and storage units aren’t available, meaning new furnishings for many (though supply chain issues are ongoing). While some maintain other homes, many people are establishing residency in income tax zones like Florida. More time in second homes — making them primary homes — will also mean more decorating.
The New York Times reported that a significant number of restaurants in New York City have been forced to close because of pandemic restrictions, and some of the better known restaurants have relocated to places like Miami and Palm Beach, following their customers. Will New York galleries be the next to follow?
New homes often result in new paintings purchased, and second homes often mean new artwork in a different style. For instance, more colorful artwork might be desired when moving into a second home in Florida. Can artists and galleries find a way to tap new residents in growing communities? We think so.
Our magazine Fine Art Connoisseur has always been a standard bearer for realism, the resurgence of realism, and a solid future for young realist artists. Recent evidence indicates that realism may see its boom years sooner than expected because there is ample inventory available with the influx of young, talented realist artists. Additionally, some highly influential modern art dealers have started to show realism as something new, representing top realists and driving prices up. If this continues it should be a financial boon for realist painters and sculptors.
Plein Air Events
Prior to the lockdowns, the plein air world was booming. Tens of thousands of artists had started painting outdoors as a hobby and thousands more followed artists as collectors at plein air events. Sadly, lockdowns resulted in the loss of a few shows, and of course hundreds of shows were forced to cancel for at least a year. Early reports indicate event attendance is starting to return to healthy levels, and it is expected that once communities begin to feel safer about getting out, attendance will be at an all-time high, as will sales. This should mean a healthy year for plein air painters and events.
The pandemic proved to be a challenge for some gallery owners and death for others, but was a blessing for many. We must not forget that many galleries have the disadvantages of the high costs of rent, electricity, staff, etc. It appears COVID flushed out those whose survival was precarious. In some cases closures simply meant gallery owners retiring earlier than they had planned. Others were driven out of business by high rents and low sales. Those who survived were the ones who did not stop marketing, who kept active and visible, and who looked for ways to stimulate business via phone and online sales. Of course, further lockdowns may impact businesses, but we’re seeing some galleries in discussions about downsizing physical spaces and relying more on online and phone sales strategies. Others are considering relocation, in many cases for the same lifestyle-driven reasons buyers have left bigger cities.
Based on the high-end modern interest in realism, I suspect more galleries will dip their toes in the water and follow suit until it’s a verifiable trend (though others will wait till it’s too late to jump in).
The predicted end of galleries has not occurred, and does not appear to be on the way. Their role and approach may change or adjust, and, as always, galleries will evolve.
COVID created a necessary pivot for those doing live workshops. Many shifted to online training via Zoom and other platforms and managed to survive and in some cases thrive. Though the adjustment required new technical proficiency, most people quickly figured it out.
The biggest concern we’ve heard is that the work involved in producing and planning training, and dealing with customers and payments, has resulted in unexpected headaches and time issues. Most artists, when calculating their hourly rate for time spent on online workshops, realized they were not being paid well. And though online was a good alternative to produce income during COVID, most feel it won’t be fruitful moving forward when time is tighter. Many have suggested that they intend to move away from or reduce the amount of personal online teaching that eats into valuable painting time.
Most artists have started returning to live in-person workshops or are eager to return, and there are strong indicators that attendance will be strong and that people are even willing to travel. We had a large crowd at both our June and October events, though we were probably off about 20 percent overall based on COVID fears. We seem to be coming out of that; for instance, early indications are making us believe our May Plein Air Convention & Expo will be sold out before February. Our hotel is already suggesting it may sell out sooner. This is great news, indicating that people are returning to life before COVID.
Because we discovered many people are unable to attend live events (for reasons other than COVID), we plan to continue our online training weeks like Watercolor Live in January, PleinAir Live in March, Pastel Live in August, and Realism Live in November.
A Strong Outlook
Most artists and galleries I know were worried that COVID lockdowns would kill their businesses, but the opposite has been true: Many had their best year in a decade. Though the level of spending on art has already declined slightly from the peak, it appears it will remain high for at least another year or so. Those who thrive will be those who continue to stay visible to art buyers and collectors through publications and websites. Social media has also offered a big boost, with more social art sales happening (though fewer than might have been expected). Whether that will continue remains to be seen, but those social outlets that have accumulated large, curated audiences appear to still be the most important places to be seen.
2022 looks strong. Of course, all bets are off if further lockdowns are required. Even if that happens, there will remain pockets where things are stronger or weaker depending on regional or local rules. Overall the prognosis is solid, though artists and galleries may wish to focus their efforts on regions where fewer lockdowns are occurring, or focus on getting in front of locked-down families who are in need of new things to make the walls they are staring at more bearable. In both cases, artists and galleries, they’ll need to adjust their 2022 plans and marketing to reflect these changes.
About the Author:
B. Eric Rhoads is founder and publisher of Fine Art Connoisseur and PleinAir Magazines. He is the author of “Make More Money Selling Your Art: Proven Methods for Turning Your Passion into Profit.” He is the founder and CEO of Streamline, a company that produces art events, artist retreats, and art instruction videos. He is an artist whose work is exhibited in three galleries, and is the father of college-age triplets. He writes a weekly blog called Sunday Coffee and writes in each issue of the magazines and for ArtMarketing.com.