High Hopes for London Art Auctions
At this point last year, the art market was in miserable shape. It was already in trouble, as the recession had begun to crystallize over the summer of 2008, a process which was hardened by the financial market meltdown in September. By the end of the year, prices had plummeted, and the practice of guaranteed minimum pricing had generally been abandoned.
By the end of 2009, signs of a recovery began to emerge, though few were willing to commit to it. A few pieces, such as Andy Warhol's "200 One Dollar Bills" turned in strong performances, but nothing was solid enough to call a trend. Nonetheless, hopes are high for the next round of sales, which will include museum-caliber paintings by Peter Doig and Yves Klein. Shown at right is Andy Warhol's Dollar Sign estimated at $1,950,000 - $2,925,000 at Christie's London Post War and Contemporary Art Evening Auction on February 11.
Cheyenne Westphal, Sotheby's European chairman of contemporary art told Bloomberg News, "That Warhol price helped a lot," in setting the tone for the upcoming auctions. Westphal continued, "Sellers can see things are improving and buyers are looking for the best. Pricing is still important, though."
It's pretty clear that the tide is turning. A year ago, the three auction houses were able to bring in a mere 37.9 million pounds together at their contemporary art sales. This year, Sotheby's has a low estimate of 32 million pounds (currently around $52 million). With five Freud accounting for five lots, not to mention the pieces by other top-shelf artists such as Klein and Doig, there's been a salient improvement in auction inventory over 2009. Many collectors withheld their best pieces over fears of low prices, but in 2010, they seem to believe there's little room for fear
A flight to quality is also evident, according to Bloomberg News. Art collectors are more focused on contemporary artwork that has proven itself, such as Doig and Freud, and they are shying away from the "fashionable artists with large studios," such as Jeff Koons and Damien Hirst. Nothing by Koons is going under the gavel at the upcoming auctions, and Christie's and Sotheby's are offering little by Hirst. Phillips de Pury is moving two pieces by Jean-Michel Basquiat, each of which has a presale estimate of around $981,000.
Anthony McNerney, head of London's contemporary art department at Phillips de Pury, told Bloomberg News, "The speculators have got out of the market, which is a good thing." He added, "The mood is mildly encouraging. No one's going crazy. There are new buyers coming into the market, but they do their research and know what things are worth."
So, the speculators are gone, real players are packing the auctions and the inventory is solid. Does this mean the art market is back? Well, let's see how February goes. There were so many signs late last year that everyone's tired of this slump, but none was sufficient to put us over the hump. Auction houses and collectors appear to be taking risks in February ... which means they aren't afraid to put their heads on the chopping blocks. This alone is an important indicator. After all, it takes a few decapitations to get a market back on its feet.