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Market Trends

Art Market's Resilience Tests Amid Economic Slide: Spring Auction Analysis

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Benjamin Hughes

May 8, 2024 - 14:25 pm

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Art Market Faces Strong Headwinds: A Look Into the Spring Auction Season

As the art world braces for the significant spring auctions in New York this May, a pall of hesitancy blankets potential consignors due to an ongoing market slump. Specialists from the auction houses have encountered notable difficulties in gathering works for these pivotal events, which typically boast an array of significant estate sales. With many sellers opting to hold off on consigning their pieces, anticipation is tinged with uncertainty for the likes of Sotheby's, Christie's, and Phillips.

Brooke Lampley, Sotheby's Global Chairman and Head of Global Fine Art, remarked on the cautious sentiment pervading the art-selling community. "Sellers are apprehensive, considering the economic challenges we face," Lampley explained. "Many are debating whether to wait out the storm, opting to hold on to their prized possessions for potentially more prosperous times."

A Scarcity of Estates

This spring's season distinguishes itself by the absence of major estate sales, which typically serve as the cornerstone of these grand auction events. "The landscape was rather barren when it came to available collections," stated Alex Rotter, Chairman of Christie's 20th and 21st Century Art Department. Rotter noted that obtaining the collections of Norman Lear and Rosa de la Cruz was akin to finding rare gems, as these were the sole significant estates on offer.

To put this scarcity in context, Lear's collection is projected to fetch over $50 million, while the de la Cruz collection is estimated between $25 million to $37 million. To illustrate the contrast, in May 2023, the collection of the late record executive, Mo Ostin, brought in more than $123 million at a Sotheby's auction.

Economic Resilience Among Wealthy Collectors

Despite a constriction in supply, the financial buoyancy of the art patronage sphere offers some stability as wealthy collectors are less swayed by everyday economic fluctuations such as inflation. "Our clientele, which emanates from high-net-worth sectors, is not substantially affected by the ebb and flow of the general economy," added Rotter. He differentiated this from what might have been the scenario had the collector base been solely entrenched in sectors like commercial real estate.

Hustling for High-Quality Consignments

Recognizing the need to galvanize sales, auction house specialists have intensified their efforts to procure desirable pieces. "Our proactivity in seeking out consignments has peaked like never before," remarked Rotter. Similarly, Lampley heralded the return to a more painstaking and traditional methodology of curation, asserting, "It's invigorating to build sales brick by brick, seeking out pieces that truly resonate with the current market sensibilities."

These tireless pursuits suggest that this May's auction season might stand as a truly reflective gauge of the art market's vitality, capturing the genuine intentions of buyers and sellers alike.

Lampley also shared insights into her strategy of persuading consignors. She suggested that in a season seeing fewer sales, their pieces could shine brighter and potentially command higher interest and prices. "This unique moment presents an opportunity for sellers to stand out in a less crowded field, possibly to their benefit," she advised.

The cumulative effect of these efforts is a sale catalog maintaining a volume similar to previous years, although the expected yield in terms of financial value projects to be significantly less.

Financial Forecast and Comparative Performance

Reflecting on the financial implications, projections show a stark contrast with previous years. For instance, Christie’s reported sales nearing $922 million last May, inclusive of auction house fees which vary. In stark dissonance, the anticipated range for this year sits at approximately $578 million to $846 million before fees. Sotheby's exhibited a parallel trend, with over $716 million in sales last May, versus anticipations of selling between $549 million to $784 million pre-fees this year.

Among its peers, only Phillips looks ahead to potential growth. Forecasts suggest its New York auctions might garner between $113 million to $163.5 million, sans fees, exceeding the $108 million, fees included, earned in the previous year.

"The art market is decidedly leaner than the last, demonstrating a pronounced selectivity," indicated Rotter, hinting at the shifted dynamics in collector behavior and market forces.

The Paradox of Quality Amid Scarcity

In the midst of this financially cautious backdrop, one might expect a dip in the quality of artworks being presented. However, consensus within the art world's circles—in gatherings from art fairs to cocktail parties—suggests that the market has managed to secure a commendably robust selection.

"I believe they've navigated the circumstances quite adeptly," commented Alex Glauber, President of the Association of Professional Art Advisors and founder of AWG Art Advisory. "With volumes and values tempered, the sales have been strategically conservative, devoid of untested artists or explosive debuts."

Aligning with the present global landscape, Rotter shared insights into his curatorial approach aimed at fostering an upbeat spirit. "I steered the sale towards lighter, more uplifting works," he stated. "Foregoing somber pieces, we've emphasized artworks that might offer solace—such as Andy Warhol's vibrant Flowers (1964), estimated at $20 to $30 million."

Reshaping Value Expectations

The altered state of the market has introduced appealing price points for cult-classic works. A striking Gerhard Richter abstract from 1988 is listed with a $10 million to $15 million estimate, starkly contrasted with a $22 million sale price for a kindred piece from the same series two years prior. "It's a moment where valuable works may be acquired at what might be deemed fair value—a rarity in recent times," Rotter reflects.

Further emblematic of the trend, an Elizabeth Peyton portrait from 1997 now holds an estimate ranging from $1 million to $1.5 million, a notable reduction from prior valuations hovering around $2 million to $3 million.

Standout Pieces Distill the Essence of the Market

While bargains emerge for works traditionally reserved for the ultra-rich, each auction has its highlights. Sotheby's contemporary evening auction plans to showcase Francis Bacon's Portrait of George Dyer Crouching (1966), estimated at $30 million to $50 million. Christie's counters with a Brice Marden abstract (2004-07) ranging from $30 million to $50 million in its 21st-century evening sale. Additionally, a David Hockney painting from Norman Lear's collection is forecasted to fetch $25 million to $35 million.

Phillips positions itself for a potent start on May 14 with a Basquiat from 1982, entitled Untitled (ELMAR), listed at an anticipated $40 million to $60 million.

Deciphering the Art Market's Pulse

Overall, how these sales perform will not just reflect individual highlights. "These auctions will serve as a critical lens into the market's health," Glauber remarks. "While we may view the art world as a single entity, it is anything but. These results will offer a broader understanding of our current position within the art ecosystem."

The outcomes will inevitably set the tone for buyer sentiment, seller expectations, and the industry's ability to navigate undeniably turbulent economic waters.

In conclusion, as the spring auctions approach, the art market flexes its resilience in the face of economic uncertainty. Auction houses, dedicating concerted effort to curate sales that resonate with today's buyers, present a unique array of works. From hidden treasures to more wallet-friendly masterpieces, these auctions will test the art market's robustness and perhaps set a new precedent for value assessment within the art collecting community.

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