Whitewall daily

Roy Lichtenstein, Frolic. Courtesy of Christie’s.

Last week, the New York spring auctions received almost identical responses from Carol Vogel of the New York Times, Judd Tully of ARTINFO, and Lindsay Pollock/Philip Boroff of Bloomberg news. After each evening sale, the columnists broke down the sales from the night before, and made assumptions about the health of the market based upon the numbers from the sales. I would like to look at last week from several different angles, just so we can try and see what the state of the art market might be aside from the most obvious numbers at the big evening auctions.

I was disturbed after reading Bloomberg’s response to the first evening sale of the week – the Sotheby’s evening sale on Tuesday. The piece began with the shocking statement that the sale was down 87% or $315 million dollars from a year earlier (the May 2008 sale). Other numbers mentioned in last weeks writings included another sensationalist Bloomberg response – Christie’s evening sale totaled less than a third of the $331.4 million of last year. Each of the pieces focused on these numbers:

Sotheby’s evening sale: Total with Premium = $47,033,500

Sell through = 81%

Christie’s evening sale: Total with Premium = $93,734,500

Sell through = 91%

Phillips evening sale: Total with Premium = $7,752,000

Sell through = 72%

Clearly, there has been a significant change in the evening sales for Post-War and contemporary art since last year. With the economy’s shift into recession it would be surprising if this had not happened. But to look purely at the numbers from the evening sales does little to inform anyone about the real state of the market.

To begin with, the sales were in no way comparable to those offered a year ago. Not only were the lot’s reduced in number – they were reduced in quality – a point discussed by Arne Glimcher of Pace Wildenstein in the Daily Beast. The majority of really high-quality works were on sale at Christie’s. The other sales were negligible. As Carol Vogel noted in her response to Phillip’s sale, the auction house had a very difficult time putting together a sale at all because they received few consignments. Ten of the lots they did have came from Saatchi who has a partnership with the auction house. As Vogel also noted, Christie’s put together a stronger sale in part because early on they managed to acquire the Betty Freeman collection – full of high-quality works that had not been on the market – superb provenance for auction sales. This attracted the few good pieces of the season, because sensible consigners realized the sale would be stronger because of this acquisition. Now, when high-quality works were offered, such as Freeman’s Hockney painting, Beverly Hills Housewife, they sold easily, and this work for example, actually achieved an auction record for the artist. So, yes, the inflated prices for artists such as Koons and Hirst were slightly less inflated – the Koon’s Baroque Egg with Bow (Turquoise/Magenta) at Sotheby’s sold for a good deal less than it would have last May. But in general, the real reason for such an extreme drop in total sales can be attributed to the reluctance of collectors to consign valuable work to the auctions this season. Why?

During the peak of the market certain collectors were convinced to sell because of the huge profit they saw as almost inevitably theirs. Now, after the autumn sales that were frightening because prices had not yet been recalibrated and nobody wanted to buy anything – a pair of shoes let alone an expensive piece of art – it was unlikely that anyone who was not desperate would put anything on the auction block. Especially without the auction house guarantees that were given out during the market bubble. Those who had to sell tried to sell privately, primarily because if the market was unstable there was a chance the works could flop and not sell at auction, tarnishing their provenance and making them next-to-impossible to sell in a weak market (another point brought up by Mr. Glimcher). You can find further reasonings for the lack of high-quality works consigned to auction houses in the recent post by my colleague, Whitewall Editor, Katy Donoghue.

But of course, the auction houses adapted their prices to the new market. One of the major reasons the November sales had such low sell-through rates was due to the fact that deals had already been made with many consigners before the collapse of the market. Auction houses were stuck with many lots that they knew were valued too high. It took evidence to convince consigners – the evidence of unsold works at the November auctions. And so, the last few months have meant a slow restructuring of prices, and actually these sales show that the auction houses did that quite well. Christie’s achieved a 91% sell through rate in comparison to their 68% November Post-War and contemporary evening sale sell through rate.

Commentary on the auctions last week only focused on the evening sales, where there was a distinct lack of differentiation between Post-War and contemporary art. The problem there is that often the evening sales are unlikely signifiers for the health of the contemporary market. Yes, flashy artists like Jeff Koons and Hirst were flying high at the peak of the market. But aside from those few contemporary artists, the majority of art in the evening sales is not actually contemporary. Many of the high-points of those evening sales came with the sales of work from dead artists – Rothko and Pollock, Warhol or Bacon. If we look at the high-quality work by contemporary artists which was offered at this last week’s auctions, most of them did quite well. Peter Doig’s painting at Christie’s sold for $4,674,500. Cecily Brown’s painting at Sotheby’s sold for $1,202,500. Masterworks, unique paintings – from painters of any time period – these will always retain their value. Hockney, Kippenberger, Fischl, Doig, or Brown – it does not matter. It is showy, mass-produced work made for the market, or the works of lower quality that are hyped up due to the name of the artist (at the peak of the market more like a name brand), that fail in a weaker market.

Aside from individual works in the evening sales, it is interesting to look at the day sales which featured a higher proportion of contemporary art in order to get a better picture of the contemporary market (although this is next to impossible since most contemporary work is not yet sold at auction). For example, Christie’s afternoon sale is composed of much more contemporary art. This sale totaled $13,650,550 in comparison to last May’s $34,607,650. While Bloomberg notes that Christie’s sale was less than a third of what they totaled last May – if we look at their sale of more contemporary work – it was actually closer to a half of the sale last spring – the peak of the market! Not quite so disturbing if we look at the rest of the economy. Or Phillips, whose evening sale was admittedly dismal, with their evening sale total only around an eighth of last spring’s sale. But if we look at their day sale, again it is closer to a half of last year’s day sale.

So what do I mean by bring up all of these various points? Yes, the market for Post-War and contemporary art has contracted. But don’t let the quoted numbers frighten you. Less work of high-quality is being offered at auction, but the auction houses have normalized prices and so the auctions of last week should if anything, give confidence to consigners and buyers that there is again a reliable and recalibrated price structure. Also, the market specifically for contemporary art is not as diminished as one might imagine from looking solely at totals from the evening sales. There has been a significantly less dramatic drop in the market for most contemporary work. Confidence will build, better work will come to auction again, and totals will climb.