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New York Marquee Auctions: key observations

In the midst of increasing global growth concerns, rising inflation and interest rates and wobbly financial markets, the art market stayed the course, even edging up to ever higher auction results.
Here are our key observations of the two-week auction bonanza :

  • Auction sales reached a new peak: above $2.5 billion sales
The widely anticipated May mega-sales in New York, which included three major single owner collections, saw auction sales jump 72% from Spring 2021 and 6% from November 2021, reaching $2.5 billion in sales across the three major auction houses (Christie's, Sotheby's, Phillips).


Source: Arttctic report: Auction Analysis: Marquee Evening Sales, New York, May 2022
This chart does not include the day sales (those had been taken into account for the total auction sale volumes)


The total number of artworks offered during the two-weeks session was 258, a roughly 50% increase to last year’s New York Spring auction session. Particularly meaningful was the significant number of works that sold at a final price (including commission) between $1 and $10mn, as can be seen here below.
 
  • The Ultra-high end of the market accounted for 70% of total sales
The top-end of the market had been remarkably strong, Buyers at the top end continued to view art as a store of value, in times of uncertainty and looming inflation.



Source: Link Management Analytics, final price includes commission

Artworks priced between $1million to $10 million have dominated the prestigious evening sales (including the single collector sales), representing more than 50% of all lots offered!

In total, 141 artworks sold for a final price (including commission) in the price range of $1 to $10 million, which represents a 45% increase from the 2021 New York spring auctions.
 
Even more impressive was number of lots that achieved a final price (including commissions) over $40 million: indeed 16 artworks surpassed that high price tag, compared with 6 in 2021.

 
  • Modern and postwar: flight to safety by seasoned collectors on the high-end
Seasoned collectors have been picking up artworks that are historically solid, even if they are more mature in prices and might only increase gradually over time. High quality works, with pristine condition and with limited to no historical auction record continue to be considered as the pinnacle of safe havens.

It was back to the classics: Among the most notable sales in that category, there was Picasso’s “Tête de femme (Fernande)”, which found a buyer at $48.5 million, a sculpture sold by the Metropolitan Museum of Art (the museum owns a second version) and considered as a moment clé in the development of cubism. Pablo Picasso’s “Femme nue couchée” (1932) wnt for $58.5mn ($67.5mn with fees), and Jackson Pollock’s “Number 31” (1949), for $54mn with fees.
 

Claude Monet, Le Parlement, Soleil Couchant
Courtesy: Christie's, The Collection of Anne Bass
Sold for USD 75,960,000 on an estimate of USD 40mn- USD 60mn

 
Three paintings by Claude Monet from the late New York philanthropist Anne Bass generated a combined figure of $169mn at Christie’s, while a 1908 painting of Venice by the French Impressionist artist sold for $49mn ($56.6mn with fees) at Sotheby’s.
 
  • Female artists' sales are consistently exceeding their estimates
Nearly 60% of the works in the 'The Now' auction by Christie's focused on contemporary artists were women artists.
The latest ‘instant’ rising-star of the auctions was clearly 27 year old Anna Weyant, hardly out of art school, whose work ‘Falling Woman’ (2020) sold for an astounding $1.6 million on a low estimate of $150,000.

 

Anna Weyant, Falling Woman,2020, Courtesy Sotheby's

Weyant’s sale at Sotheby’s set off a string of auction records for female artists (and bidding wars), among them Simone Leigh ($2.2 million) and Avery Singer ($5.3 million), whose ascent seems unstoppable. Records were also established for two auction newcomers: Jennifer Parcker ($2.3 million) and Lucy Bull ($907,000), Meanwhile Cristina Quarles achieved a new recod of $4.53 million on a $300,000 low estimate, whilst Shara Hughes and Ewa Juszkiewicz further cemented their popularity.

Equally strong were the sales of post-war female artists, such as Helen Frankenthaler or the surrealist Leonora Carrington, whose work 'The Garden of Paracelsus' sold for more than twice its low estimate for more than USD 3mn with fees.
Female surrealism, whether post-war or contemporary (think Louise Bonnet, Marria Berrio) benefited strongly from the Venise Biennale's re-conceptualization of surrealism as seen from the female perspective.
  • Ultra-contemporary: the frenzy lingers on
Across the board, younger up-and-coming artists, with very moderate price estimations, continued to prompt frantic bidding, Christie's Hong-Kong sale a couple of days ago confirmed the trend, with 11 soaring young artists breaking their auction records.
The growth in sales in ultra-contemporary will continue to be driven by younger collectors, that want to collector their peers and necessarily ignite shifts in collecting taste.
Even major museums are integrating shows by contemporary artists to attract a younger audience, such as the Uffizi showing Anthony Gormley or Guiseppe Penone.

Nevertheless the trend of  disbursing excessive multiples on auction estimates is unsustainable  in the current shifting economic and financial context.

 

The End of the free capital  - what's next for the art market?

While many of the fresh art markets stars continued their upward trajectory, often at irrational rates, and more established stars that have a sustained momentum seemed to hold steady, the real test for the broader art market will be in six months, at the fall auctions.

Historically, there has always been a delay in the art markets reaction to economic downturns and financial market corrections. As an example, in May 2008, the artmarket was still running hot, but cooled down massively toward the end of the year and in early 2009.
Whether there will be a full-blown recession or not, liquidity dynamics are reversing and we are just starting to see how the increasing cost of money will impact the real economy and various asset classes.

I
f capital becomes more expensive, then spending priorities are bound to change.

Some lessons can be drawn from financial markets.
Indeed, in recent weeks, the most overblown, speculative stocks sustained the sharpest falls so far (mostly the pandemic darlings and as an illustration, Morgan Stanley's unprofitable tech index is down 65%).

The equivalent to overblown speculative stocks, is evidently the ultra-contemporary speculative art segment.  This segment shares some common features:

  • Extreme price increases and irrational bidding that has become disconnected to art-historical relevance
  • Most speculative rising stars have only a few years of art practice and have not yet gone through the consensus-making benchmarks of curators, institutionals and academics
  • Each decade will only retain a limited number of art-historical relevant artists, while the vast majority disappears
  • Millennials have outspent all other generations in 2021, and have been a driving force behind the speculative capital that chased ultra-contemporary art - yet after years of persistent price appreciations across all asset classes, they might now  face steep valuation corrections on some of those asset classes
  • Extreme auction prices forces galleries representing rising stars to increase substantially their primary market prices to avoid selling works at 85% or 90% discount to auction prices, which often means artists stop selling to a broad base of collectors
On the other hand, artists with:
  • historical relevance
  • scarcity of quality works
  • international recognition that permits a potential sale in various geographic locations
  • acquisition prices inline with fair market value
will continued to be viewed as stores of wealth, especially in an environment where inflation-hedge assets are essential in a diversified asset portfolio.
 
Art in an emergency

Is the subtitle of Olivia Laing's publication 'Funny Weather- Art in an emergency', a collection of short artist profiles.
In her book, Laing makes an inspiring case for why art matters more than ever, as art changes how we see the world and offers new perspectives. She offers short glimpses in the life of several historical artists and establishes their role in our political and emotional lives.

The artists themselves are well-known but certain aspects of their existence, that certainly also influenced their artistic output, are discovered in this compilation of essays.
 

         

As an example, Laing reminds us of Robert Rauschenberg’s avant-garde approach when it comes to inclusion.
In 1982, he launched the ROCI ‘Rauschenberg Overseas Cultural Interchange' at the United Nations. The goal of the ROCI was to engage with countries that were culturally isolated or where freedom of expression was limited. Rauschenberg had hoped for government support but he ended up paying most of the $11 million bill for ROCI himself. His work wasn't commanding sufficiently high prices, so he had so sell works by his friends like Warhol or Jasper Johns and mortgage his house.From 1985 to 1990, he had traveled to 11 countries, including China, Tibet, the USSR, working with local artists for weeks before hosting each time a substantial show. And by 1991, over 2 million people had seen a ROCI show..

Equally fascinating is Joseph Cornell's life, spent in a small wooden house outside Manhattan, with his mother and disabled brother, assembling his private museums of magazines, postcard, librettos, record, crystal swans, corks and rubber balls, from which he created his boxes. He would be reluctant to sell his assemblage boxes, rather giving them away to women, whom he adored but never managed to establish contact with.

Other artists depicted in the publication, through mini-biographies, are Agnes Martin, Sarah Lucas, David Hockney Jean-Michel Basquiat, with a focus on their personal circumstances  rather than artistic production (but these circumstances also shed another light on their art),

Funny Weather requires one to go beyond the page and it's impossible not to end up with a list of artists and artworks you want to explore further.




More to follow soon ! Our next newsletter will include an update on the NFT market....to be continued...

The LINK Management team 

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