Growing expectation of an art market correction centers on overheating in the postwar and contemporary category, but this large group—encompassing Mark Rothko and Andy Warhol, Christopher Wool and Oscar Murillo—should not be expected to perform uniformly. To compare areas of relative strength and weakness, we created three dynamic indices for category segments based on auction sales data from 2000 through 2015. The broadest index is based on each year’s overall top 50 performers, comprising perennial blue-chip names drawn largely from the postwar decades, such as Francis Bacon, Willem de Kooning, Gerhard Richter, Rothko, and Warhol. The second focuses on market leaders born after 1945, encompassing Jean-Michel Basquiat, Peter Doig, Damien Hirst, and Wool. The third was built from sales of works by each year’s top 50 best-performing artists born after 1970. Predictably, the latter group performed most sluggishly early last decade due to their being largely unknown—all were 30 years old or younger in 2000—but in recent years they showed the strongest growth among the three indices as these artists built from relatively low prices. From 2014 to 2015, however, this group was hit hardest by a broad cooling in contemporary auction sales. In this period we see continued, albeit slower growth for both the top 50 postwar and contemporary artists and the top 50 born after 1945, mirroring market sentiment expressed in factors such as weaker sales at Art Basel Miami Beach. Based on these findings, we might expect still-strong performance at this month’s sales among these more established groups, and wealthy collectors may even set new records for trophy works by blue-chip postwar stars. The market correction of more than 10 percent among artists born after 1970, however, indicates a significant change—the first year-over-year decline since the post–Lehman Brothers deflation of 2008 and 2009. The index’s dropoff is mirrored in the annual sales declines for individual artists highlighted in the table below, showing the top 15 performers based on cumulative sales over the 16-year period under review. Wade Guyton, for example, sold 18 pieces for $35 million in 2014 yet 10 sales in 2015 totaled just $5.1 million. Overall, sales of pieces by these top 15 artists declined from 219 in 2014 to 143 in 2015, and even more persuasive proof of the segment’s weakness can be seen in the buy-in rate, which climbed from 18 percent in 2014 to nearly 30 percent in 2015.
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