The back room: return to form

A financier in his Fifth Avenue office in New York City. (Photo by TIMOTHY A. CLARY / AFP via Getty Images)

As the Delta variant Tearing up unvaccinated populations around the world, the number of cases, hospitalizations and deaths are all on the rise. But with existing COVID-19 injections still proving to be very effective, life and business in America’s major art cities increasingly slip into pre-pandemic trends.

Three possible societal changes were taken for granted in the depths of the crisis:

  • Air travel for business and pleasure would take years to return to pre-COVID levels.
  • Flagship cities like new York, San Francisco, and Los Angeles would permanently lose tens of thousands of residents to places with less density, more comfort and lower costs.
  • Large-scale homeworking would become permanent for much of the white-collar economy.

Yet 16 months after the first US lockdowns, much of this triple threat seems empty. Let’s go through each item to see its impact on the art market in the United States.

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Air travel is back

The CEO of Delta Airlines announced during the company’s earnings call last week that “domestic leisure travel is fully restored to 2019 levels.The figures confirm this:

  • TSA treaty 2.2 million passengers nationwide last Sunday, the highest single-day total since COVID emerged here.
  • Delta, South West, and American Airlines all recently posted second quarter profits.

Airline executives also expect business and international travel to “improve dramatically” during the fall months, as it would in a normal year.

But the pros of the art market have been ahead for months. They began to skyrocket to sell almost immediately after the initial panic subsided, and dozens of flights to must-see (and network-must-see) fall national events have already been booked.

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Migration patterns have stabilized

Forget the hope that long neglected cities could become exciting new hubs of artistic patronage. COVID has largely left America’s wealth map intact.

  • Based on millions of U.S. Postal Service address change requests, the U.S. metropolitan areas that gained or lost the most net movers in 2020 “are almost entirely the same as in 2019,” according to the Results crew at New York Times.

new York and San Francisco were the only major exceptions – and they deserve major asterisks.

  • The data shows that residents who bailed out the two cities largely settled within easy commuting distance of major metro art events (as in new York and Connecticut).
  • The migratory losses of the two cities are due less to an unusual increase in departures than to a unusual drought in newcomers, according to a study by the Federal Reserve Bank of Cleveland.
  • the Resultsanalysts deemed “likely” that “new hires and young adults who did not leave” smaller subways for major cities in 2020[will] do it this coming year.

Three months later, their prognosis looks prophetic, because …

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Big industries are coming back to the office

Much of New York’s financial industry is either already returning to their old offices or arriving soon.

  • Thousands of employees at Goldman Sachs and Barclays returned to their office last month.
  • black stone recalled all of its fully vaccinated bankers to headquarters afterwards.
  • Morgan stanley President and CEO Jamie Gorman “expects most of his staff to be back by Labor Day” according to the the Wall Street newspaper.

Facts also show tech workers are flocking to San Francisco and Silicon Valley again, with an even bigger influx to come.

  • Twitter recalled workers to headquarters last week and plans to open major new offices in San jose and Oakland in 2022.
  • Google, which will welcome staff again in September, is committed $ 1 billion to new commercial real estate in California by the end of the year.
  • May 2021 reversed a roughly one-year drop in rental prices in neighborhoods favored by tech-savvy people, according to the US Census Bureau and Zillow.
  • The median price of a house in San Francisco ($ 1.9 million) recently surpassed its pre-pandemic record, according to the California Association of Realtors.

Thanks to Wall Street and Big Tech, then, New York and San Francisco are quickly regaining the young money that makes them so crucial and so promising (respectively) for the art market.

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About Margaret L. Portillo

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