Real estate market anticipates art market's trends

Traditionally, the art market trends are said to be unpredictable since they don't follow any mathematical rule like the stock market is. Yet their is one way that can help anticipating the art market trends. The key to this equation is the real estate market.

A sure fact is that in crisis periods the general prices for real estate use to drop, and obviously rise in more prosperous periods. The second point is that the art market is related to the real estate one: a boom in the real estate is obviously followed by a growing demand in furniture, pictures and works of art to make the newly bought houses' or flats' decoration.

Therefore the general prices for art can be anticipated by following the real estate trends. By simply comparing the prices trends for the 20th biggest capitals in the World from 2005 to 2010 and the general art prices trends between the same period, the results are very similar in evolution values. The only difference is that the art market seems to react later: the real estate started to collapse in fall 2008, while the art market stated its decline in the first months of 2009.

The art market and the real estate market art very similar. These two market are both:
-often approached as investments
-double advantage values: sure & useful, one can live in or with its investment
-sure values for top quality artworks or houses
-markets in which the average rang will be the first one to suffer from a recession

As Pierre-Edouard de Souzy, a French based antique dealer says, "the art market is like the real estate one: a wonderful flat in the most prestigious neighbourhood of Paris, the square meter's price might move a little but buyers will always be there. Same thing for a top quality painting, there will always be collectors". Therefore, many auction houses such as Sotheby's or Christie's - primarily specialized in art - have also opened a real estate department.

Since the real estate usually engages much higher prices than the artworks, a buyer usually apply for a bank loan, which are directly related to the financial market. This is why the real estate market is so much reactive than the art market.

For 2010 the general prices for the real estate in New-York, Hong-Kong, Paris, London and many other capitals are rising... perhaps a good time to collect some works of art!

Read more here: http://www.artfinding.com/News/Real-estate-market-anticipates-art-market%27s-trends/206.html