5 lessons from auction week (2023)

Spring auction week tends to be a whirlwind of incredibly beautiful art and incredibly high prices. But it also serves a more practical purpose: determining the level of the art market. Is it possible general or sick? Were the prices inflated, adequate or low? Which artists broke out and who went under?

At first glance, last week's New York sales at Sotheby's, Christie's and Phillips looked solid, with the amount of art sold totaling nearly $2 billion at high selling prices. But compared to your stratosphererecent years, this series of auctions has dropped significantly, with less exciting inventory, lower prices, and some serious discounts.

"This week was like 2008, when suddenly people are after deals and you can get them," he said.Neil Meltzer, a New York art consultant, adding that collectors were willing to pay dearly for unusual pieces ofKlimt, Russo, MagritteeBacon.

As a result, the art world is now grappling with the idea that the market correction it's been bracing for is finally coming. Its arrival, experts say, is largely due to fears of inflation, limited supply of trophies and an overabundance of B+ artwork.

Some say this signals the return of some long-awaited sanity. "What we experienced in recent years was not a normal market environment", said the art consultantTodd Levin. “The combination of money printing during Covid and until recently low interest rates has led to a market bubble. Markets don't melt upwards indefinitely."

What follows are some of the week's top topics, drawn from sales data and interviews with industry experts.

Inflation inhibits speculation

The volatility of the financial markets and the increase in interest rates left collectors with less liquidity and more hesitant to enter auctions. This led to minimum bids of $50,000 increments instead of the usual $100,000 or $1 million..The financial problems became clear during the sale of Gerald Finebergcollectionat Christie's house. The auction was held without guarantees or irrevocable bids, giving a clear picture of a market without pre-established minimum bids that allow consignors and buyers to hedge their bets.

Many lots sold below their estimates. Even the most expensive artwork of the night, a 1993 Christopher Woolpaintwhich went for $10 million, sold for only half the high estimate. Overall, the collection finished about $38.3 million behind the night's low estimate before buyers premiums were taken into account.

The lack of masterpieces

Last spring, collectors fought over a 1964 portrait of Marilyn Monroe by Andy Warhol during a Christie's auction that resulted in a shocking195 million dollarsprice, with buyers fees. The company named him one of the most expensive icons of the 20th century. Experts said the sale demonstrated Warhol's enduring power in the art market - the gift he continues to give.

But this season, the famous pop artist was almost not hit. Christie's sold a single Warhol during their nightly sales and it was a small artwork depicting coffee cans.2 million dollars, about $500,000 above the high estimate. Sotheby's, the world's largest auction house, didn't have a single work by the artist in its nightly sales.

Auctioneers and market analysts said that great examples by modern masters such as Warhol, Picasso and Lichtenstein are becoming increasingly difficult to obtain. These artists have been mainstays of the blue-chip art world for so long that supplies are running low.

"It's happening right now with Basquiat," said Robert Manley, who heads Phillips' contemporary and 20th-century art department. “There are simply less and less great Basques.

"It's a natural evolution of the market," continued Manley. "Invariably, more and more of these works of art end up in museums and collections that don't want to sell."

Charles F. Stewart, managing director of Sotheby's, agrees that the market faces shortages,pointing outthat around $1 billion worth of Warhols have been sold in the last five years – around 136 works of art between 2018 and 2022.

"The collectors who can hold onto them the longest will," Stewart said. "And when they do come, it will be a relatively small group of people who can afford them."

Artworks that are not considered true awards, however, will struggle to fetch high prices. "Any work of less than absolutely exceptional quality will require reduced pre-auction estimates," Levin said. “It's becoming a 'junk or masterpiece' market.

The Paul Allen Effect

Due to the good results of last yearPaul AllenThe sale at Christie's - high estimates and big results - auction houses went into this season with aggressive estimates, in part to win new material in the first place. So, at the last minute, auction houses had to adjust to demand by lowering the reserve price, the minimum price at which an item will sell.

"In the future, auction houses will have to convince their shippers to become radically realistic about pre-auction estimates or suffer the indignity of being called out at the last minute for a greatly reduced reserve," Levin said.

The Newhouse sale, on the other hand, was more conservatively priced and ended at 100%, with the total above the average sale estimate. The plays were more cerebral, including two - byde KooningeBacon— this has led to strong values ​​being pursued by many collectors

Flipping art and money

It's no coincidence that Cecily Brown has an exhibition at the Metropolitan Museum of Art now and last week.Cecily Brownpainting went to auction. When an artist has a good year, his collectors have a great year.Simone Leigh, for example, had a rapid rise that last year included the representation of the United States at the Venice Biennale and currently has an exhibition at the Institute of Contemporary Art in Boston, until September 4th.

That kind of buzz attracts auction houses, where it can be profitable for collectors to sell recent purchases for a quick payout. This practice of inverting art has become so common that it raises more eyes than eyebrows. So perhaps it was no surprise that one of Leigh's friends2019 "Branco"the sculptures sold last week at Christie's for $2.7 million (with buyer fees), a hefty price for the artist at auction.

Also at Christie's was a 2020 paintingDanielle McKinneyand a landscape from 2021 byEmma Webster.

Dealers find this rapid turnover frustrating as it can flood the market with art, creating oversupply and underselling, or exceeding what is offered directly by the artist, reducing their ability to set prices.

"We want to sell to managers, not investors," the trader says.Alexander Gray, who represents many older artists.“This destabilizes the primary market. That's why gallery owners are so careful who we sell to."

Changing flavors?

During one of the first big auctions of the season -the sale of SI Newhouse, on May 11- Christie's soldthree paintingsby the famous painter and sculptorJasper Johns. The artist was boosted by two major retrospectives, at the Whitney Museum and at the Philadelphia Museum of Art, both of which ended last year. However, his artwork at Christie's sale did not meet his low estimates. This seemed to shock shippers and collectors alike: three batches of other artists were withdrawn from the next Christie's sale, and 10 batches of others failed to sell.

Some market analysts and collectors have argued that Johns' decline was the result of petty bidding. others blamed Christie's for overly high estimates. still others blame oversupply. Bonnie Brennan, president of Christie's Americas, insisted that there is a global appetite for the 93-year-old artist's paintings and that they have not yet reached their price peak.

But the biggest trend after two weeks of auctions was perhaps the market's preferences towards young painters. McKinney, Webster and Rebecca Ackroyd, for example - each of whom sold well last week - are all in their 30s. "What happened was a reminder to people how sensitive prices are to changes in taste," he said.Doug Woodham, art consultant and former executive at Christie's. "And changes in taste are the dominant factor in changing prices over the long term."

The market began experimenting with younger artists with lower estimates to attract buyers' attention. "Auction houses used to shy away from untested art, especially at night sales," said Natasha Degan, president of art market studies at the Fashion Institute of Technology. "That has changed dramatically."

Two 26 lots offered noChristie's 21st Century Night Sale, almost a third were artists born in the 80s or 90s.Phillips Contemporary & 20th Century Art Night Sale, 80% of lots were appearing on the auction market for the first time. These artists are often women and people of color, bringing diversity to a market that has historically catered to white artists.

"For a very young generation, there are a surprisingly large number of artists selling at very healthy prices," Manley said. "Yes, many of them are younger artists and some of these paintings have only been executed in the last few years, but we are reflecting the demand."

Many artists who may be unknown in the auction world have exceeded their estimates. This included a 2010 painting byNoah Daviswhich cost Phillips over $900,000 in buyers fees, nearly seven times the high estimate.

"The classics are being reevaluated," said Meltzer, "because new classics are being incorporated."