The Back Room: Return to Form

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

    As the Delta variant rips through unvaccinated populations around the world, case counts, hospitalizations, and deaths are all rising. But with existing COVID-19 shots still proving highly effective, life and business in premier U.S. art cities are increasingly sliding right back into pre-pandemic trends.

    Three possible societal shifts were taken practically for granted inside the depths of the crisis:

    • Air travel for business and pleasure would take years to recover to pre-COVID levels.
    • Leading cities like New YorkSan Francisco, and Los Angeles would permanently lose tens of thousands of residents to locales offering less density, more comfort, and lower costs.
    • Large-scale work-from-home would become permanent for much of the white-collar economy.

    Yet 16 months since the first U.S. lockdowns, much of this triple threat looks empty. Let’s bullet through each element to see its impact on the stateside art market.


    Air Travel Has Roared Back

    The CEO of Delta Airlines announced in the company’s earnings call last week that “domestic leisure travel is fully recovered to 2019 levels.” The numbers back him up:

    • TSA processed 2.2 million passengers nationwide last Sunday, the highest single-day total since COVID emerged here.
    • Delta, Southwest, and American Airlines all recently posted Q2 profits.

    Airline execs also expect business and international travel to “improve meaningfully” in the autumn months, as they would in a normal year.

    But art-market pros have been ahead of the pack for months. They started soaring to sell almost immediately after the initial panic settled, and scores of flights for fall’s must-see (and must-network) domestic events have already been booked.


    Migration Patterns Have Stabilized

    Forget the hope that long-overlooked cities might become exciting new hubs of art patronage. COVID largely left the map of wealth in America intact.

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

    New York and San Francisco were the only major exceptions—and they deserve major asterisks.

    • Data shows that residents who bailed on both cities largely settled within easy commuting distance of major metro art events (such as in upstate New York and Connecticut).
    • Both cities’ migration losses had less to do with an unusual rise in departures than with an unusual drought in new arrivals, per a study by the Federal Reserve Bank of Cleveland.
    • The Upshot’s analysts deemed it “likely” that “new hires and young adults who didn’t leave” smaller metros for premier cities in 2020 “[will] do so this coming year.”

    Three months later, their forecast looks prophetic, because…


    Major Industries Are Returning to the Office

    Much of the New York finance sector is either already back at their old desks or arriving imminently.

    • Thousands of employees at Goldman Sachs and Barclays returned to their desks last month.
    • Blackstone recalled all of its fully vaccinated bankers to headquarters afterward.
    • Morgan Stanley chairman and CEO Jamie Gorman “expects most of his staff to be back by Labor Day” per the Wall Street Journal.

    The facts also show tech workers are flooding back into San Francisco and Silicon Valley, with an even greater influx coming soon.

    • Twitter called workers back to headquarters last week—and plans to open major new offices in San Jose and Oakland in 2022.
    • Google, which welcomes staff back in September, is committing $1 billion to new commercial real estate in California by year’s end.
    • May 2021 reversed a roughly yearlong drop in rental prices in neighborhoods favored by techies, per the U.S. Census Bureau and Zillow.
    • The median home price in San Francisco ($1.9 million) recently surpassed its pre-pandemic high, per the California Association of Realtors.

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

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