Hot art market cools

Crain's NY reports:

The art market frenzy that made art students into stars overnight, spawned scores of fairs around the world and turned young investment bankers into major collectors may be coming to an end.

For the first time in years, New York dealers are reporting weaker sales, hesitant buyers and difficulty keeping up with the high rents in Chelsea, the center of the New York art scene. A few galleries in the bustling neighborhood are already subletting space to make ends meet, and insiders are concerned that some of the 400 galleries there could fail.

“Everyone is feeling a slowdown,” says Michel Allen, owner of an eponymous gallery in Chelsea. “People are still buying, but it's a much more difficult sale.”

Sales were down 10% overall for Ms. Allen this past fall over the previous year and sales in certain segments of her business, like photography, have stopped altogether.

Sundaram Tagore, whose Chelsea gallery represents hot international artists like Hiroshi Senju and Natvar Bhavsar, says sales in January fell around 25% from the same time last year. And David Maupin, of the Lehmann Maupin gallery in Chelsea and the Lower East Side, has reported a 50% drop in sales of work by younger artists whose pieces sell for less than $20,000, and a decline in sales of works priced at less than $100,000.

“Things just aren't selling in a certain range,” Mr. Maupin says. “Last year was very different at this time.”