Spring auction week is usually a whirlwind of heartbreakingly beautiful artwork and staggeringly high prices. But it also serves a more practical purpose: to determine the level of the art market. Is it generally strong or sickly? Were the prices high, appropriate or low? Which artists broke up and which refueled?
On the surface, last week’s sales in New York at Sotheby’s, Christie’s and Phillips looked solid, with total art sales approaching $2 billion at high sell-through rates. But compared to the stratosphere of recent years, this series of auctions was significantly disappointing, with less exciting inventory, lower price points and serious discounts.
“This week looked like ’08 where all of a sudden people are looking for deals and you can get them,” said Neal Meltzer, a New York art consultant, adding that at the same time, collectors were still willing to pay big bucks for unusual pieces by Klimt, Rousseau, Magritte and Bacon.
As a result, the art world is now faced with the idea that the market correction it has been bracing for is finally here. Its arrival, experts say, is largely due to inflation fears, a limited supply of trophies and an excess of B+ artwork.
Some say this marks the return of some common sense, which is healthy and long overdue. “What we’ve been through in recent years is not a normal market environment,” says art consultant Todd Levin. “The combination of printing money during Covid and low interest rates until recently resulted in a bubble in the market. Markets do not melt upwards indefinitely.”
What follows are a few key takeaways from the week, gleaned from sales data and from interviews with experts in the field.
Inflation hinders speculation
Volatile financial markets and rising interest rates meant that collectors went to the auctions with less liquidity and more embarrassment. That led to stingy bidding with $50,000 increments instead of the usual $100,000 or $1 million sweeps. Money problems became apparent during the sale of the Gerald Fineberg collection at Christie’s. The auction went ahead with no guarantees or irrevocable bids, leaving a clear view of a market stripped of the predetermined minimum bids that allow shippers and buyers to hedge their bets.
Many lots were sold below their estimates. Even the most expensive artwork of the night, a 1993 Christopher Wool painting that fetched $10 million, sold for just half its high estimate. Overall, the collection finished about $38.3 million behind the night’s low estimate before buyer premiums were factored in.
“The path looks a little different this season because of a certain amount of caution,” said Bonnie Brennan, Christie’s president for the Americas. “And maybe this year you will see that sales are taking a little longer. Winning those bids is a great skill.”
A shortage of masterpieces
Last spring, collectors competed for a 1964 portrait of Marilyn Monroe by Andy Warhol at a Christie’s auction that resulted in a price tag of a whopping $195 million, including buyer’s fees. The company proclaimed it one of the most expensive images of the 20th century. Experts said the sale demonstrated Warhol’s enduring grasp of the art market – the gift that keeps on giving.
But this season, the famed pop artist barely made a blip. Christie’s sold a single Warhol during the evening sale, and it was a small work of coffee cans that fetched $2 million, about $500,000 shy of the high estimate. Sotheby’s, the world’s largest auction house, did not have any of the artist’s work in the evening sale.
Auctioneers and market analysts said it is becoming increasingly difficult to find great examples of modern masters such as Warhol, Picasso and Lichtenstein. These artists have been mainstays in the blue-chip art world for so long that supply is drying up.
“It’s happening with Basquiat now,” says Robert Manley, who helps direct the 20th century and contemporary art department at Phillips. “There are fewer and fewer large Basquiats.
“It’s a natural evolution of the market,” Manley continued. “More and more of these works of art end up in museums and collections that do not want to sell.”
Charles F. Stewart, Sotheby’s CEO, agreed that the market was experiencing scarcity issues, noting that about $1 billion worth of Warhols has been sold over the past five years — about 136 pieces of art between 2018 and 2022.
“Collectors who can hold on to them longer will,” Stewart said. “And when they come, it will be a relatively small group of people who can afford them.”
Artworks that are not considered real prizes, however, will struggle to command high prices. “Any work of less than absolutely exceptional quality requires reduced pre-auction estimates,” Levin said. “It’s going to be a garbage-or-masterpiece market.”
The Paul Allen effect
Due to the strong results of last year’s Paul Allen auction at Christie’s – high estimates and big results – auction houses came out with aggressive estimates this season, in part to win new material in the first place. Then the auction houses had to adapt to demand at the last minute by lowering the reserve price, the minimum price at which an item is sold.
“Going forward, auction houses will have to convince their senders to either get radically realistic about pre-auction estimates or endure the indignity of being called at the 11th hour for a greatly reduced reserve,” Levin said.
Sales in Newhouse, on the other hand, were more conservatively priced and ended up selling at 100 percent, with a total above average sales estimate. The works were more cerebral, including two – van de Kooning and Bacon – that fetched strong prices, pursued by various collectors
Flip and cash art
It is no coincidence that Cecily Brown currently has an exhibition at the Metropolitan Museum of Art and that a painting by Cecily Brown was auctioned last week. When an artist has a good year, her collectors have a great year. Simone Leigh, for example, has had a meteoric rise. Last year she represented the United States at the Venice Biennale, among others, and she currently has an exhibition at the Institute of Contemporary Art in Boston, through September 4.
That kind of buzz attracts the auction houses, where it can be lucrative for collectors to sell recent purchases for a quick payout. This practice of flipping artwork has become so common that it raises more eye rolls than eyebrows. So it may have come as no surprise that one of Leigh’s 2019 “Stick” sculptures sold at Christie’s last week for $2.7 million (including buyer’s fees), a hefty price for the artist at auction.
Also at Christie’s was a 2020 painting by Danielle McKinney and a 2021 landscape by Emma Webster.
Dealers find such a rapid turnover daunting, as it can flood the market with artwork, creating an oversupply and undercutting or exceeding the artist’s direct supply, making them less able to set prices.
“We want to sell to stewards, not investors,” said dealer Alexander Gray, who represents many older artists. “It destabilizes the primary market. That is why gallery owners are so careful about who we sell to.”
Flavors change?
During one of the first major auctions of the season – the SI Newhouse auction on May 11 – Christie’s attempted to sell three paintings by famed abstract expressionist Jasper Johns. The artist had the momentum of two major exhibitions, at the Whitney Museum and the Philadelphia Museum of Art, both of which ended late last year; however, his artwork in Christie’s sales fell short of their low estimates. That seemed to shock contributors and collectors: three lots were withdrawn from the subsequent Christie’s sale and 10 lots went unsold.
Some market analysts and collectors theorized that Johns’ dip was the result of stingy bidding; others blamed the outrageous estimates at Christie’s; still others blamed an oversupply. Bonnie Brennan, president of Christie’s Americas, insisted there was a global hunger for paintings by the 93-year-old artist and they had not yet reached their top price.
But the bigger trend after two weeks of auctions may have been about preferences in the market developing around new painters. McKinney, Webster and Rebecca Ackroyd, for example – all of whom sold well last week – are all in their 30s. “What happened reminded people how sensitive prices are to changes in taste,” says Doug Woodham, an art consultant and former director of Christie’s. “And taste changes are the main driver of long-term price changes.”
The market has begun experimenting with newer artists at lower estimates to capture buyers’ attention. “Auction houses shunned untested art, especially during evening sales,” said Natasha Degan, chair of art market studies at the Fashion Institute of Technology. “This has changed dramatically.”
Of the 26 lots offered at Christie’s 21st Century Evening Sale, nearly a third were from artists born in the 1980s or 1990s. At the Phillips 20th Century and Contemporary Art Evening Sale, 80 percent of the lots appeared on the auction market for the first time. These performers are also often women and people of color, bringing diversity to a market that has traditionally focused on white male performers.
“For a fairly young generation, there’s a surprisingly large number of artists selling for very healthy prices,” said Manley. “Yes, a lot of them are younger artists and some of these paintings have only been done in recent years, but we’re reflecting demand.”
Many artists who may have been unknown to the auction world shot above their estimates. That included a 2020 painting by Noah Davis that fetched more than $900,000 in buyer fees at Phillips, nearly seven times the high estimate.
“The classics are being re-evaluated,” Meltzer said, “as new classics are being integrated.”
