The 2010 Art Market Review – artmarkeblog.com

The 2010 Art Market Review – artmarkeblog.com

2010 has been one of the most confusing, unpredictable and unexplainable years for me as an art market analyst. So many of the trends, events and fads that emerged during 2010 did not appear to be caused by the sort of conditions, have the same effects, or follow the same path of logic that one would expect they would given the way things have panned out in past years. This leaves me with no doubt that the art market is evolving at such a rapid pace that there is little point trying to justify or explain the events of today using logic that is based on the progression and events of previous years. In fact, more of the art market events that took place during 2010 appeared to defy logic than ever before. I do, however, strongly believe that one of the reasons that it has become even more difficult to determine what is going on with the art market is that the art market (auction houses in particular) has become adept at making the situation appear much better than it really is. Whether it be by skewing figures or manipulating the way results are perceived – galleries, fairs and auction houses have become the plastic surgeons of the art world.

What has also made 2010 such a hard year to analyse was the contraction, and slow regeneration, of the market for the work of trendy emerging artists and recent works by top contemporary artists – both of which are usually the most global, visible and publicised sectors of the market. As the market moves towards the work of artists with a proven track record, collectors and investors have shifted their focus from the usually dominant and globally relevant contemporary art market to the work of artists from a wide of variety of styles, mediums and movements that cannot appear to have very little in common. This has resulted in a situation where there is not one dominant global trend that art market analysts such as myself can focus on, but a number of smaller and disjointed trends that make reading the market particularly difficult.

A few months ago I wrote a series of posts on what I believed was a move towards a more sentimental art market, which appears to be exactly the direction that the market has headed. General disillusionment with the contemporary art market has sent many collectors and investors take a more sentimental approach to fine art that is characterised by a focus on the safety of more established artists and the familiarity of artists that they can relate to. When art collectors or investors seek safety and familiarity they are most likely to gravitate towards works by artists from the era and culture that they have the greatest connection to. This would explain the large number of seemingly unrelated trends that emerged during 2010 many of which involved previously unfashionable styles and movements that are distinctly associated with a particular era or culture.

There is no doubt that the art market has recovered far quicker than many people thought possible. Again, the unexpectedly rapid recovery has thrown a spanner in the works when it comes to analysing the art market and trying to make sense of what is going on. Some journalists and analysts have gone as far as to admit that they cannot explain how a market that seemed to be at breaking point could make such a rapid recovery. To give you an idea of how quickly the art market has recovered, in March of this year (2010) Walter Robinson, editor of Artnet Magazine, said that “Art Market Watch has been on something of a hiatus during the last few months. What with the recession, reporting on auction results just isn’t as compelling as it was during the boom years”. Six weeks later a painting by Picasso become the most expensive work of art ever sold at auction when it fetched a staggering $106.5 million. A week after that an Andy Warhol self portrait sold at Sotheby’s for $32.6 million (more than twice the estimate) setting a new record for a Warhol self portrait at auction. Compelling enough?

When it comes to rationalising art market events there is much to be gained from knowing who has money to spend and how much they have to spend. The top end of the market is fuelled by super wealthy collectors whose level of wealth would not have been affected enough by the financial crisis to deter them from buying art. Therefore at the high end of the art market things have been pretty solid as is evident from the number of record auction prices set in 2010. The lower end of the market is fuelled by collectors who focus on edgy and trendy contemporary art by emerging and newly established artists, and who will usually have a high level of interest in the cultural and artistic side of fine art. Collectors at the lower end of the market are a very determined group who are always going to be around even if they appear a little less active at times. Things at the lower end have improved but have done so at a less than rapid pace which makes it difficult to judge where this sector of the market is heading. Without a doubt the sector of the art market that has suffered for the longest period of time due to the effects of the global financial crisis and the art market downturn is the middle market. The middle market includes lesser works by big name artists, and the more expensive (less justifiable) works by the trendy contemporary artists, which makes the middle market a sort of currently un-necessary compromise for the super rich, and a stretch too far for the modestly well off. Middle market works are, however, perfect for the financial advisor and hedge fund manager types who are more interested in art as a status symbol than the quality or art historical importance of the works they are buying. With the pay packets of hedge fund managers and financial advisors taking a massive hit due to the financial crisis, there is little interest in the middle market works. The super rich are still rich enough to not have to compromise and settle for middle market works and the modestly well off continue to fuel the lower end of the market.
My next post will be the top ten art market 2010 so stay tuned……..

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

Frieze Art Fair 09 Review – artmarketblog.com

Frieze Art Fair 09 Review – artmarketblog.com

'The Couple' by Louise Bourgeois

Over the last month or so I have attented twelve art and antique fairs in London which have left me with plenty to write about and the need for a few days rest. Although the fairs themselves were frought with issues the general mood was positive and the outlook optimistic. Dealers have reported good sales in most cases and seem to be in a very optimistic frame of mind as the market continues to pick up. The biggest fair I attended was the Frieze Art Fair which is one of the most important contemporary art events in the UK if not the world. Although one cannot help but be impressed by the glitz and glamour of the Frieze art fair it was just not an enjoyable experience for me. To start with, the marquee was really hot which made just being at the fair physically unpleasant, but the real problem with Frieze is that it is too much like a supermarket. When visiting a supermarket one tends to only take notice of the brands they are familiar with or the products that are the most visually striking due to the sheer number of different brands and products available. The same goes for Frieze where all but the works of the most recognizable artists and the most flamboyant works of art get lost in the crowd. I came away from the fair with memories of works by artists whose work is instantly recognisable and distinguishable such as Damien Hirst, Yayoi Kusama, Richard Prince, Jeff Koons, Cy Twombly, Andy Warhol, Richard Serra, Takashi Murakami etc. I also have memories of other works by emerging artists that stood out of the crowd, but am unable to remember who they were because of the number of names and images swirling round in my head. Funnily enough, it was the big, bold works by the emerging artists that are reported to have experienced the highest level of success.

On a more positive note, quality was consistently high and sales are reported to have been considerably higher than last year. However, it is important to remember that a positive spin can be put on anything and that the likelihood of this years fair being any worse than last year was very slim. As far as figures go, sales of works priced at under 100,000 pounds were the most prevalent as one would expect with a show geared towards the work of emerging artists. Sales of works in the five figure range are reported to have been particularly strong which is pretty much the same trend reported by dealers at the 2008 fair. Six figure sales were few and far between, which is to be expected with a fair geared towards emerging artists and seven figure sales were even more scarce. There were, however, at least a few big ticket sales that are worth mentioning such as:

-A Louise Bourgeois sculpture titled ‘The Couple’ which was sold by Hauser and Wirth Gallery for US$3.5 million (about 2,150,000 pounds)
-Ruscha’s ‘A Riot of Atom’ which was sold by Gagosian Gallery for US$1.5 (about 900,000 pounds)
-A David Hammons installation which was sold by Salon 94 for US$1.5m (about 900,000 pounds)
-A Neo Rauch painting from 2002 titled ‘Harmlos’ which was sold by David Zwirner US$1.0m (about 610,000 pounds)

I honestly think that the biggest difference between this year’s fair an last year’s fair is that the dealers were in a better position to cater to the current market climate and have had the time to adapt their strategies to the buying trends. Dealers reported that buyers are still being cautious and are taking their time to make decisions which is, once again, similar to reports from last years fair. The market for contemporary art is not really in that much of a better position than it was last year but dealers have had more time to adapt to the conditions and make the best of a bad situation. One can take comfort in the fact that things haven’t got worse and that there is still money out there to be spent on contemporary art. There are undoubtedly signs that the market for contemporary art is poised to make a more speedy recovery than people thought which is somwhat of a scary thought.

The Zoo Art Fair was a completely different story but you will have to wait until my next post for more info.

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

Australian Art Market 08 Review Part 2 – artmarketblog.com

Australian Art Market 08 Review Part 2 – artmarketblog.com

By the last round of auctions for 2008 in November and December it was obvious that the auction industry was still coming to terms with the art market correction taking place despite the fact that signs of a cooling market had been evident for several months prior. It appears that some auction houses had taken the opportunity to adjust their sales to reflect the leaner times but it also appeared that some of the auction houses had not been so savvy and either were being pressured by their vendors to work with higher estimates or had just not made the correct revisions. The bargains that people are bound to be seeking as the art market undergoes a correction had just begun to appear at the November/December sales prompting some of the more confident buyers to take advantage. Overall, however, the end of year sales continued to reflect the softening market albeit with some scattered positive results brightening that light at the end of the tunnel. What needs to be understood is that the results for 2008 were no where near as bad as many people made out. Taking all things into consideration the Australian art market appeared to have held up rather well by the end of 2008 with the effects of the financial crisis seemingly not affecting the Australian market as much as certain international markets.

One auction in particular stole the end of year show achieving results well up on the other auction houses and in the process. That auction was the November 26 Deutscher-Hackett sale which took in a total of $3,127,260 (including buyers premium) and sold 73% of works by value and 72% by volume. In comparison, the combined Deutscher-Menzies and Lawson-Menzies November sale achieved 62% by value and 70% by volume, the Sotheby’s November sale achieved 67.4% by value and 60.8% by volume and the Bonhams and Goodman sale achieved 61% by value and 59% by volume. One of the smaller auction houses, Leski Auctions, held their first dedicated art auction on the 2nd of December and managed to sell a quite respectable 61% by value and 62% by volume for a total of $510,048 (data from aasd.com.au).

Overall the Australian art market took a significant step backwards in 2008 compared to 2007 with auction sales dropping from a $175.6 million record year in 2007 to $114.5 million. Although the figures for 2008 look particularly bleak when compared with those of 2007 the bigger picture is not quite as bad with 2008 auction sales total well up on the 2006 auction sales total of AU$104 million. One of the most interesting statistics from 2008 comes from the Australian art auction sales database, the Australian Art Sales Digest (http://www.aasd.com.au), who calculated that the overall art auction clearance rate (percent sold by number) decreased from 71.9% in 2007 to 65.6% in 2008.  Importantly, the drop in the clearance rate is not as big as many people would have predicted.

To be continued…..

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.

The Reality of Art Sales Data – artmarketblog.com

The Reality of Art Sales Data – artmarketblog.com

It’s very unfortunate that the most transparent sector of the art market is also the source of some of the most inaccurate and unreliable data in relation to the art market. Although art auctions proceedings may appear to involve a high level of randomness and chance they are in fact highly orchestrated and planned events that are designed to maximise the number of people who bid on work, maximise the number of works sold and make the figures seems as positive as possible. Everything from the way the catalogues are prepared and the works described to the way the actual auction is conducted are designed to ensure as many sales as possible.

In previous posts I have gone through all the reasons that the auction results are not as accurate a representation of the value of a work of art as they may appear so I will not go through that again at this stage. Instead, I want to look at the other sector of the market that we don’t get data from which is the gallery sector. Galleries are not obliged to publicise their sale data which means that the art market is missing out on a massive source of extremely useful and relevant information and data. If you compare the sale data for a gallery compared to an auction there is no doubt that the data from the gallery would be far more accurate. Although galleries still are able to have some influence over their sales and sale data the level of influence they have is far less than the auction houses have.

There are different estimates of the percentage of total art sales that are conducted through galleries but this may be due to the variety of market structures that exist in different countries around the world. Estimates range from one quarter to one half but from my research the most accurate figure seems to be that one third of total art sales are conducted through galleries. A report conducted in 2006 by the New York Alliance for the Arts stated that the total art sales in New York State for the 4 auction houses and 626 galleries totaled $4.6 billion in 2005 with $1.9 billion (41%) going to gallery sales. That would make the average turnover of each gallery in New York State just over 3 million dollars which seems like quite a lot of money.

There are plenty of issues to raise with the availability and use of art sales data so I will be posting several posts in this topic over the next few weeks. To be continued……

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.