Recently two art auctions were held that produced some interesting market comments and concerns. In the first auction an early Renaissance painting that only a few years ago would have commanded a low six-figure evaluation sat on the table to a slow and agonizing price of $25,000 without the commissions being added in. The work was by a lesser known, but still recognized artist, that any good art advisor would have been remiss to not recommend to his clients interested in Old Master works. The quality and provenance of the piece was exceptional and the imagery was right out of the bible. The work was solidly the kind of art that collections are made from.
What a Difference 600 Years Makes
The second auction was a contemporary sale of names that are immediately recognizable yet the works were not necessarily the “A” list works from the acclaimed period or genre of that particular artist; the also-rans as they may be called inaudibly in the backrooms of the auction houses. Although this particular work was well received and sold for well above its estimate, the work still demanded and received only $25,000, without commissions.
Prices are Not Simply What Things Cost
It did not take market watchers long to connect these two sales in open discussions as to what was or was not the arbiters in these two works gaining an equal market share at $25,000. The first painting was by a less recognized artist from a time when the full resonance of the period was in its developmental stages. Although an excellent example of this particular artists’ genre, it was nevertheless not comparable to similar works by later, more established and recognized artists of the same period. In the right collection it could have been a standout and remarkable work clearly establishing the groundwork for the period.
The contemporary work was neither remarkable nor groundbreaking, and it was a more a combination of other factors that played into its market price going above the auction house estimate. The work showed elegance, a panache, and demonstrated the confidence the artist had in creating the imagery in the first place. But it was more name recognition and current fashionable trends that sent the work above the estimate.
Prices Reveal What a Society Values
When all was said and done both works sold, the sellers were happy and the buyers were content. But the market was still quietly discussing the sales, the backrooms where those who know gather, and the dealers, were matching thoughts and rummaging ideas. The market was reflecting that the less than perfect historical work declined in value and the young gun, rising star, gained valuable market share.
Interestingly the discussions centered on the art works and on the artists, but not on the buyers. And therein lies the key point in determining the how and the why of both transactions. The prices revealed that the buying public saw the values of these works but not necessarily reflecting the rule that art is worth what someone is willing to pay for it.
Under-45 and Loving It
New, younger buyers and collectors are changing the way auctions are being fashioned and presented. The new buyers are not the offspring of the well to do or scions of historically significant collectors; they aren’t necessarily knowledgeable about art or the art market in general. These new collectors are aware of the panache of contemporary art through contacts on social media and the wellspring of articles and pronouncements on the arts and auction media sites. Few are experienced at buying art and most turn to more knowledgeable associates to anchor their understanding of the process and the rewards.
The new who’s of art purchasing do not care about the time period nor do they invest in an artist’s background, that is all second to the personal judgment about the quality of the work and a good, well presented, backstory.
The New York court noted that “[b]y definition, the fair market value of an asset such as a work of art, a used car, a piece of real estate, and many other assets is ‘the price that a willing buyer and a willing seller would agree to in an arm’s length transaction.’” Arthur Properties, S.A. vs. ABA Gallery, Inc., No. 11 CIV. 4409 LAK, 2011 WL 5910192, S.D.N.Y. Nov. 28, 2011.
You may also like to read: