The Warhol Market in 2023
As with the man himself, all was not what it seemed in the Andy Warhol art market in 2023. On the surface, revenue declined precipitously year over year, the total number of sales declined, and his artist rank dropped. Reality, however, painted a different picture.
Total public sales revenue from Warhol in 2020 fell to a long-term low due to COVID. In 2021, it rebounded, just making up for the lost revenue from the previous year. In 2022, it soared—breaking not just $300 million but $500 million for the first time, based in large part on the sale of a single $178 million painting. Anything short of a miracle would have resulted in a decline in revenue in 2023.
Indeed, the most expensive Warhol painting sold for only $22 million, and the number of Warhol artworks that sold for more than $5 million dropped by 75 percent. Taking into account average sales numbers for 2016–2023, the real revenue drop was only 20 percent. Even so, Warhol’s artist rank dropped from #1 in 2022 to #7 in 2023—the same drop it experienced during COVID.
Warhol Total Public Sales Revenue (Millions)
Warhol Artist Rank by Sales Volume
The total number of Warhol lots sold also dropped, but it was still second only to 2022. Combined with the decrease in rank and revenue, that reflects the stability and strength of the Warhol market. In times of uncertainty, people hold onto their Warhols longer than any other art—and their most valuable Warhols longer than anything else. Thus, 2023 saw declines that were mostly the result of collectors and investors parting with their low- and mid-level prints and paintings while holding firmly onto their premium Warhol art.
From Fear to Confidence
The art market began 2023 with fear and uncertainty. It had already seen weakness in the fall of 2022, and no new flagship collections were on the horizon to bring collectors to the market. In a market based on confidence, collectors bid cautiously, being extremely careful with their capital. If it was not a trophy, it likely did not perform well.
Underlying the sentiment and actions were three concurrent market forces: high interest rates, a generational transition of art, and two unpredictable wars. How each of those play out over the coming year will determine the near-term future of the art market, as well as which sectors of the art market will appreciate the most.
A Soft(ish) Landing
Free cash injected into the U.S. economy in the post-COVID era caused widespread inflation—and a widespread increase in the prices of alternative assets such as luxury watches, wine, and fine art. To rein in inflation, the Federal Reserve began to raise interest rates in early 2022; by mid-2023, interest rates were the highest they had been since 2001.
As the price of borrowing rose, investors divested from alternative assets. Aggressive buyers fled the market, causing the overall buyer base to shrink, and prices came crashing back down. The Warhol art market weathered the storm with its usual stability, experiencing a slight decrease in value and a moderate increase in volume.
With the economy expected to experience strong turbulence, investors fled to ultra-low-risk T-notes, which had a 5%+ yield. (T-notes have not yielded more than the S&P 500 earnings yield since 2001.) The Federal Reserve pulled off the seemingly impossible—a soft landing—and inflation has fallen; as interest rates are lowered in 2024, investors are likely to exit low-yield T-notes and return to the art market.
They will, however, likely be looking to high-grade their portfolios to reduce risk, turning it into a “junk-or-treasure” market. In that environment, iconic prints and paintings would demand ultra-high prices, the mid-market would sag slightly, and the lower end of the market would fall. That positions Warhol’s work as among the most desirable, as its style and subject recognition place it at the high end of the market. Within his portfolio of work, the most unique, recognizable prints, such as trial proofs of Superman and Mickey Mouse, are likely to see the highest prices.
The market is markedly different. The high end has rocketed away. It has squeezed the bottom end.
Buyers in the postwar and contemporary art market were comfortable borrowing against their assets when they had access to capital at a cheap rate.
A Generational Transition
Baby boomers have dominated the art market for decades. They are now beginning to slow acquisitions and bequeath their collections to the next generation—or are putting them up for auction to consolidate their portfolio. Last year represented a temporary calm from marquee estate auctions, as collectors were uncertain whether they would get the maximum value from their collection. Over the next few years, look for estate auctions to rise, with quality prints and paintings drawing collectors to the market with greater frequency.
The outstanding question, though, is whether artists who are currently foundational to the market will endure the generational exchange. Some will inevitably fade into obscurity, and others will see the value of their art continue to rise. The difference lies in relevance: Will the next generation recognize and embrace what their art symbolizes?
When will Andy Warhol stop being fascinating? . . . It’s actually his art form: creating fascination.
For Warhol, the answer is yes. The icons presented in his work, the iconic style in which it is presented, and the variety of his subjects enable it to transcend generations. Whereas baby boomers bought Liz Taylor and Mick Jagger, Gen Xers are buying the nostalgic Superman and Mickey Mouse. And brand-aware millennials are buying MobilGas and Apple (from Ads). Aside from proving the ongoing value of the Warhol market, the generational transition is likely to present some excellent entry points into prints that are on the verge of high value increases.
Two Unpredictable Wars
The wars in Ukraine and the Gaza Strip, along with their threat of regional and global contagion, have injected fear into the art market. Collectors and investors are more likely to hold onto cash when faced with the prospect of an international war.
The wars have also removed both bidders and art from the market. Buyers with Israeli connections have had their attention diverted from transacting in luxury items. In Russia, sanctions against specific leaders have resulted in them being labeled persona non grata in the U.S. marketplace, preventing them from purchasing or selling.
Geopolitical conflict has strongly affected three Warhol print series: Mao, Hammer and Sickle, and Red Lenin.
Several Russian collectors have been barred from the market, and U.S. collectors are extremely reluctant to bid on Russian symbolism, lest it indicate their support. The Red Lenin that came up for public sale in 2023 did not sell, and the three Hammer and Sickle prints sold for an average of only .89 of their estimate.
While Mao is an iconic Warhol image, its connection with a communist regime has led to a steady decrease in value. In a ranking of the value of all published prints in 2019, Mao was #23. In 2021, it was #28; in 2022, it was #29. And in 2023, it was #31. If tensions with China remain high, it is likely to continue to sink.
The Outcome
During periods of strong uncertainty, collectors gravitate toward reliable investments: well-established, blue-chip artists. The art market performance in 2023 demonstrates the fundamental truth that in the long run, legacy will outrank trends and drive sales. Artists like Warhol, with long sales histories and global reputations, represent a safe haven and a strong investment.