Monday, February 8, 2010

Holy Giacometti!

Today we hear from guest poster Brian T. Allen, the Addison Gallery's Mary Stripp & R. Crosby Kemper Director, regarding the current state of the art market:

Although Alberto Giacometti (1901-1966) was not an American artist, I could hardly not notice the sale of one of his life-size bronzes for £65,000,000, the most expensive work ever sold at auction (see left). The sale, which took place on February 3 at Sotheby’s in London, speaks much about the chaotic state of the art market in the depths of a terrible economy.

I follow the art market closely, both the auction art market and the dealer-based market and want to share a few observations about the state of the market in light of the Sotheby’s auction. The market is in a curious place now. Buyers have lost many, many billions of dollars during the course of the financial crisis. This has had two fundamental effects. Capacity has dropped, and we see this in the steep declines in totals generated in almost every auction. Sometimes sales totals are down by more than half the take for the same sale in 2008. Consignments have shriveled as well, with anyone having any discretion on whether or not to sell deciding to keep their art until the economy improves. But consignments still happen. Death, divorce, and debt still drive sellers to Christie’s and Sotheby’s, but if a collector is not a Madoff victim, chances are he or she is waiting for an overall financial uptick before selling art.

In the face of reduced supply, there are still many people with both enormous wealth and a voracious will to collect. They are competing for art in a market where the supply of great things has been reduced by this new hesitation to sell. So, despite the overall decline in auction sales totals, records are still broken in most sales. The prices of objects of the very highest quality have not dropped but, indeed, have continued to increase, whether the object is a painting by Rembrandt or van Dyke, a drawing by Raphael, or an extraordinarily rare bottle of wine. If a high quality object has been in a private collection for many years, its freshness to the marketplace makes it even more appealing.

I would not call the Giacometti art of the very highest quality. Rather, I would place it in the general category occupied by Andy Warhol’s painting, 200 One Dollar Bills, which sold for almost $44 million late last year. Although the Warhol is historically a more important work than the Giacometti, both are flashy “name” artists and immediately recognizable brands whose presence on a Manhattan or London wall bespeaks their owner’s cultural and financial firepower.

Surprisingly, then, given continued demand and reduced supply, now is probably a good time to sell at Christie’s and Sotheby’s. On the dealer side, overall my dealer friends tell me the market is improving very gradually after a deep freeze that lasted most of 2009. A wobbly stock market will not help to keep things moving in that direction. I will report more after I visit the major art shows in New York in early March.

Posted by:

Brian T. Allen
The Mary Stripp & R. Crosby Kemper Director

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