Art Market
The news from last week’s major New York auction is that the art market has certainly turned a corner. All the signs from the London and Paris October sales weeks had been positive, and now the U.S. market has delivered a very healthy total of $2.2 billion in art sales over five days.
Not only were these figures handsomely up by 77% year over year, but there were many other reasons for a positive long-term outlook for the art market. The top end saw numerous knockout prices, and many established collectors returned to buy. Several artists’ values were reassessed, the middle market continued to strengthen, and price speculation for contemporary artists has contracted.
Here are four key takeaways from a week of historic auction sales.
1. The top end of the art market is robust, and buyers are returning
Gustav Klimt, Portrait of Elizabeth Lederer, ca. 1914–16. Courtesy of Sotheby’s.
Frida Kahlo, El sueño (La cama), 1940. Courtesy of Sotheby’s.
Knockout prices always raise the spirits in these major sales weeks: In an art market particularly reliant on confidence at present, these outperformances are key.
What did we see? Over 25 works sold for more than $10 million, and they performed well against their benchmarks almost without exception. Among them were several clear landmarks. Gustav Klimt’s Portrait of Elizabeth Lederer (ca. 1914–16) from the Leonard A. Lauder collection sale, made the second-highest price in auction history at $236.36 million. Notably, five bidders competed for the work.
The high price for the Klimt, which set a new auction record for the artist and a modern artwork, is critical for market confidence. Still, professionals in the know were even happier to see the participation of Asian collectors, major American underbidding, and a Middle Eastern buyer.
Such global bidding has been missing at the top of the market for a while now. Tellingly, a disappointed Asian underbidder for the Lederer portrait went on to buy one of the Klimt landscapes that sold for an eight-figure sum a few lots later.
Adrien Meyer sells the top lot of The Collection of Robert F. and Patricia G Ross Weis, Mark Rothko’s No. 31 (Yellow Stripe), 1958. Courtesy of Christie’s.
Reengaging these major players at the top of the market is key. It brings stronger prices, renewed confidence, and inspires a new generation of collectors to compete in the salesroom.
The roster of over 25 major works that sold very well is also impressive and reassuring because of the high levels of competition and prices achieved.
Claude Monet, Nymphéas, 1907. Courtesy of Christie’s.
Agnes Martin, The Garden, 1964. Courtesy of Sotheby’s.
These prices come on the back of equally impressive results for major works sold earlier in the season in Europe, such as Pablo Picasso’s Buste de femme au chapeau à fleurs (Dora Maar) (1943), which achieved €32.01 million ($37.15 million) at Lucien Paris, Hôtel Drouot in October.
Interestingly, irrevocable bids—offers submitted before a sale that cannot be withdrawn—which have often been seen to be the crutch of a weak market, have now become indicators of confidence in quality. The majority of the top works in New York had “backing bids” to kick off their sales, and it is striking how many of these elicited strong competition as a result.
In a previously fragile market, these secured bids are creating significant buyer confidence.
3. Rampant speculation in the market is waning
Kerry James Marshall, Portrait of John Punch (Angry Black Man 1646), 2007. Courtesy of Sotheby’s.
Amy Sherald, A Clear Unspoken Granted Magic, 2017. Courtesy of Sotheby’s.
The art market has also seen several significant corrections over this season. In Europe last month, we witnessed a retreat from the speculative hunt for works by emerging artists at prices far above what their market or career stage would normally justify.
There was something of a “return to order” as collectors competed for and consistently paid the highest prices for artists with established reputations. This continued in New York.
The only living artists who truly outperformed last week were those of great merit. Three perfect examples were Kerry James Marshall’s Portrait of John Punch (Angry Black Man 1646) (2007), which achieved $7.15 million against an estimate of $4–6 million; Cecily Brown’s High Society (1997), which sold at $9.81 million, a new record for the artist; and Amy Sherald, whose striking A Clear Unspoken Granted Magic (2017) fetched $4.1 million. Sherald is certainly an artist with an ever-strengthening reputation and a following to match.
3. Artwork prices are starting to readjust to collector demand
Marc Chagall, Le songe du Roi David, 1966. Courtesy of Christie’s.
This auction season has also seen several notable artists whose values are being reassessed, aligning demand with long-term interest and promoting more sustainable, informed collecting.
Fernand Léger, for some time oddly out of favor, had a tremendous week, with four works from the 1910s and 1920s selling well with strong bidding competition. His works may still be beneath the artist’s auction values of a decade ago, but his return to popularity is a significant indicator.
Similarly, Henri Matisse is back in high demand. His Figure et bouquet (Tête ocre) (1937) sold for more than twice its low estimate at $32.26 million after a fierce chase between a major New York dealer and a private American collector represented by an agent in the room.
The same American buyer pursued Marc Chagall’s Le songe du Roi David (1966) to a princely $26.51 million, heralding the resurgence of the artist’s prices across the board in recent years. Also very satisfying to see was the depth of bidding and consistently strong prices for Agnes Martin and Alexander Calder, two titans of the 20th century.
Alexander Calder, Four White on Little Red, 1959. Courtesy of Sotheby’s.
On the flip side, prices for works by some major artists saw their values challenged and several struggled to meet expectations. These include Ernst Ludwig Kirchner and the German Expressionists; Maurice de Vlaminck, Georges Braque and the Fauves; American post-war abstract artists, such as Franz Kline, Robert Motherwell, and Frank Stella; and certain living artists, such as Christopher Wool and Maurizio Cattelan. Even Lucian Freud’s prices are being adjusted.
All of these are likely to appear regularly at auction with more conservative estimates: expect their prices to find new levels accordingly.
There may be great buys to be had for astute collectors in these areas in the auction seasons ahead. Experience may play an increasingly important role as collectors try to assess these nuances in the coming years.
4. Auction houses are taking a smarter approach to the current market
Sotheby’s Breuer lobby gallery, featuring works from the Collection of Dorothy and Roy Lichtenstein Photo by Stefan Ruiz. Courtesy of Sotheby’s.
Looking at the season overall, there is no question that both Sotheby’s and Christie’s got their strategies right.
The single-owner collections were beautifully presented with catalogues distributed well before the sales. The houses looked for reassuring third-party bids for the top lots, negotiated reserves as low as 70% of a lot’s value to improve sold rates and to allow markets to rebalance. They also withdrew fewer lots to provide a more transparent view of markets and generally made the whole auction experience more entertaining and engaging.
Sotheby’s new Breuer Building space is a huge improvement on their previous York Avenue headquarters, and the new salesroom seems tailored for their auctioneers. The evening sales, with the advantage of high-quality material, were significantly more enjoyable than we have seen for two years.
Great quality at good price levels has encouraged buyers back into the salesrooms and undoubtedly helped the market turn a corner. The challenge ahead for the auction houses will be to create the same atmosphere and selling rates with mixed-property sales without the wow-factor of masterpieces from great single-owner collections such as Lauder, Robert F. and Patricia G. Ross Weis, Elaine Wynn, and Cindy and Jay Pritzker.
But perhaps most importantly, the global art market saw a return to order this season. If not fully recovered, it is most certainly back on its feet.
