Major May art sales at major auction houses are expected to be lower than last year, as wealthy buyers and sellers breathe a sigh of relief from the frenetic prices of 2021 and 2022.
Art auction sales at Christie’s, Sotheby’s and Phillips over the next two weeks are expected to total $1.2 billion, down 18 percent from a year ago and about half of May 2022 sales, according to ArtTactic. .
That extends the art market’s recent decline from its post-Covid peak, when cheap money, a booming stock market and fiscal stimulus saw record sales. Last year, global art auctions fell 27 percent from 2022 — the art market’s first contraction since the start of the pandemic in 2020 — and average prices fell 32 percent, according to ArtTactic. It is the biggest drop in seven years.
During the first quarter of this year, sales in the contemporary and postwar categories — which have been big moneymakers and growth drivers for the art market in recent years — fell 48 percent, according to ArtTactic. .
Auction houses say demand from buyers is strong. The problem, he says, is one of supply, as collectors refrain from selling their trophies in favor of a better market environment. This spring, there are also no large single-owner collections for sale like the Macklow Collection or the Paul Allen Collections that have helped power sales in past years.
“We’re seeing what people perceive as a smaller offering this season,” said Brooke Lampley, global chairman and global head of fine art at Sotheby’s. “The proof is in the pudding. These buyers are showing and what works will sell for that will define our perception of the art market at the moment. And I expect the results to be strong.”
Price pressure
Dealers and art experts say the auction art market has stalled in terms of value, with sellers unwilling to settle for less than what they fetched at the market’s peak in 2021-2022. Meanwhile, buyers are demanding discounts due to rising interest rates, an uncertain election year and geopolitical uncertainty.
“Sellers want 20% more, and buyers want 20% less,” said Philip Hoffman, CEO of Fine Art Group, an advisory and art finance firm. “There is an impasse.”
CNBC’s Robert Frank before collaborating with Andy Warhol and Jean-Michel Basquiat at Sotheby’s.
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Dealers say that today’s buyers don’t have the confidence they had two or three years ago: Persistent inflation, high interest rates, fears of a slowing economy, upcoming elections and geopolitical turmoil are all making it difficult for collectors to get their hands on them. They are forcing to stop shopping.
“People hesitate,” said Andrew Fabricant, chief operating office at Gagosian, a mega gallery and dealership. “It’s an election year, the situation with the Fed, are they going to cut or not. The value of money is relatively high compared to a few years ago.”
Even buyers who have the cash and are willing to pay aren’t buying because of the lack of high-end art coming up for auction, experts say.
“Our customers have a ton of cash,” Hoffman said. “The question they’re asking is, ‘Should we buy into the art market now?'”
Few pieces
While the spring sale usually features more than a dozen works with bids in excess of $30 million each, this year there are only a few.
Among the most expensive works this auction season is Francis Bacon’s 1966 “Portrait of George Dyer Crouching,” part of a series of 10 famous and memorable portraits of Dyer that Bacon painted between 1966 and 1968. Million.
(LR) Jean-Michel Basquiat’s “Italian version of Popeye has no pork in his diet,” 1982, and Francis Bacon’s “Portrait of George Dyer Crouching,” 1966.
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Sotheby’s also owns a collection of four John Mitchell paintings, two of which are expected to fetch more than $15 million.
Christie’s is offering a large work by Bryce Marden, who died last year, called “The Event,” with an estimate of $30 million to $50 million. It also has a famous 1982 work by Jean-Michel Basquiat, called “Popeye’s Italian Version Has No Pork in His Diet,” which is estimated at $30 million.
Yet collectors and art advisers say there are few if any “masterpiece” works to inspire excitement this season.
“They don’t have Marquis material this season,” the fabricant said. I was.”
At the same time, art experts say now is a good time to hunt for bargains given the long-term prospects of the art market.
“I think if you can get deals with prices before 2022 and if there’s good quality, now is the time to buy,” Hoffman said. “My view of the art market for the next 10 years is that it will be a fantastic investment. It’s a great time to buy, not a great time to sell.”
While auction sales are weak, sales in private markets and galleries are strong, advisers say. Sales of new works in galleries are less dependent on return on investment, and therefore less sensitive to economic and stock market fluctuations. Auction houses are also seeing strong growth in their private sales, where they deal directly between buyer and seller without a public auction.
Christie’s sold a Mark Rothko painting to hedge fund billionaire Ken Griffin for more than $100 million earlier this year, CNBC previously reported. Collectors say that selling a trophy work privately reduces the risk of a failed auction, which can damage the work’s value.
“With private markets, you can be very targeted in terms of who you’re contacting, what type of buyer you’re contacting,” said Drew Watson, head of art services at Bank of America. ” “You can be very targeted about the price you’re going out and asking in the market. There’s a lot of discretion so you can go to the market and test the price and the feedback you get. can adjust accordingly.”
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