Pretty Picture for Art Sales as a Picasso Fetches a Record Price
It's not exactly the apocalyptic vision that was laid out back in 2008 when The Wall Street Journal warned that the "art market crash...threatens to remake the art world.... Auctioneers, dealers, artists and collectors have changed strategies and policies, and it's likely that future changes will be even more sweeping."
Art Heights in Depths of Crisis
Those "sweeping changes" haven't wiped out art dealers' or auction houses' profits. Among the most expensive paintings ever sold (that have been reported, anyway), quite a few went at or near the height of the economic crisis. Andy Warhol's "Eight Elvises," for example, was privately sold for $100 million in November, 2009; Claude Monet's "Le Bassin aux Nympheas" sold at a Christie's auction in June, 2008, for $80 million (it was only expected to fetch $47 million). And in the depths of the recession, Christie's sold designer Yves Saint Laurent's private collection for roughly $480 million in February, 2009, the largest-grossing auction for a private collection.
All those sob stories about America's wealthiest pulling back on luxury vacations and mansion purchases wasn't because they lost their savings to scam artist Bernie Madoff.
"Our client base was more cautious last year, but I don't think it was because of lost wealth," says Toby Usnik, Christie's head of communications. "[Our clients] were ensuring the stabilization of their businesses and affairs. And as the market has come back, they have been able to ensure the stability of their portfolios, and they've been eager to focus on collecting again."
Usnik also points out that many clients sought art as an alternative investment.
"We always counsel people to buy art because they love it. But as it happens, art is often a good, solid investment. I think to some degree we saw that last night -- there were people who wanted to put their money in an alternative asset class."
It probably also helps that the art market has been buoyed by cash from outside America. Usnik says of the overall bidders at Tuesday's auction, 36% were from the U.S.; 36% were from Europe or the Middle East; 4% were Asian; and 24% were "other" or chose to remain anonymous. And of the Picasso painting's eight bidders, quite a few were apparently of European descent.
"The difference between the pre-financial crisis market and the post-financial-crisis market is that the buyers are geographically more widespread than they were then," says Lucy Mitchell, president of the Art Dealers Association of America, who was at Tuesday night's auction. "There were six or seven people bidding [on the Picasso painting on Tuesday], and although the buyers aren't in the room -- they all had reps -- most of the reps were European. I didn't stay for the entire sale, but the people who really made a mark at the auction were not Americans. I would say they were Europeans or Russians."
Despite the eyebrow-raising sales figures, Mitchell thinks it's premature to call a comeback for the art market: "It's still too early to get a read on the market."
One indicator that the market has definitely not returned to its former extravagant glory, according to Mitchell, is the bankruptcy of Carlson & Co., a San Fernando, Calif-based fabricator known for producing extremely expensive pieces for well-known artists, including Jeff Koons.
"I found it interesting that it took this long for [Carlson] to go bankrupt," says Mitchell. She adds: "It also tells me that expensive fabrication has come to a halt. Artists have to find less expensive ways to fabricate. In this market, dealers are not financing expensive fabrications of sculptures or projects for artists."