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Key art sales at major auction houses in May are expected to be lower than last year, as wealthy buyers and sellers take a breather from the price madness of 2021 and 2022.
According to ArtTactic, art auction sales at Christie’s, Sotheby’s and Phillips over the next two weeks are expected to reach $1.2 billion, down 18% from the same period last year and almost half of May 2022 sales.
It extends the art market’s recent decline from its post-Covid peak, when cheap money, a booming stock market and fiscal stimulus created record sales. According to ArtTactic data, global art auction volume last year fell by 27% compared with 2022. This was the first time the art market shrank since the outbreak of the epidemic in 2020, and the average price fell by 32%, the largest decline in seven years.
According to ArtTactic, sales in the contemporary and post-war categories – the art market’s big moneymakers and growth drivers in recent years – plunged 48% in the first quarter of this year.
The auction house said buyer demand remained strong. The problem, they say, is supply, as collectors delay selling their trophies in favor of better market conditions. There are also no large single-owner collections for sale this spring, such as the McCullough Collection or the Paul Allen Collection, which have driven sales in previous years.
“We’re seeing people think the works are smaller this season,” said Brooke Lampley, global chairman and global head of fine art at Sotheby’s. “The proof is in the pudding. Buyers are showing up and the works are selling. Prices will determine our current view of the art market. “I expect the results to be strong.”
price pressure
Dealers and art experts say the art auction market has been stalled by price issues, with sellers unwilling to get lower prices than at the market’s peak in 2021-2022. Meanwhile, buyers are demanding discounts due to rising interest rates, election year uncertainty and geopolitical uncertainty.
“Sellers want prices to go up 20% and buyers want prices to go down 20%,” said Philip Hoffman, a consultant and chief executive of art finance firm Fine Art Group. “It’s an impasse.”
CNBC’s Robert Frank is at Sotheby’s before filming a collaboration between Andy Warhol and Jean-Michel Basquiat.
Liu Jingjing | CNBC
Dealers say buyers today are no longer as confident as they were two or three years ago: persistent inflation, higher interest rates, concerns about an economic slowdown, upcoming elections and geopolitical crises are all causing many collectors to pause Buy.
“People are feeling hesitant,” said Andrew Fabricant, chief operating officer of Gagosian, a major gallery and dealer. “This is an election year. The Fed will decide whether to cut interest rates or not. Compared with a few years ago, the cost of funds is relatively high.”
Experts say even buyers with cash and a willingness to pay won’t buy because there’s such a dearth of top-notch art at auction.
“Our customers have a lot of cash,” Hoffman said. “The question they’re asking is, ‘Should we buy into the art market now?'”
Fewer pieces
While spring sales typically feature more than a dozen works selling for more than $30 million, this year there were only a handful.
The most expensive works of the season include Francis Bacon’s 1966 Portrait of George Dyer Crouching, which Bacon painted for Dyer between 1966 and 1968 Part of a series of 10 famous and monumental portraits.
(LR) Jean-Michel Basquiat’s “Italian Popeye’s Diet Without Pork”, 1982, and Francis Bacon’s “George Dale Crouching” “Portrait”, 1966.
Liu Jingjing | CNBC
Sotheby’s also collected four paintings by Joan Mitchell, two of which are expected to sell for more than $15 million.
Christie’s will display “Event,” a large-scale work by Brice Marden, who died last year, with an estimate of $30 million to $50 million. It also houses Jean-Michel Basquiat’s iconic 1982 work The Italian Version of Popeye Has No Pork In His Diet , estimated at $30 million.
Yet collectors and art consultants say there are few “masterpieces” to get excited about this season.
“They just don’t have the Marquis material this season,” Fabricant said. “Unless you have something really unique and special, I don’t think you’re going to be as enthusiastic about sales as you were in the past.”
Meanwhile, art experts say now is a good time to get a bargain given the long-term outlook for the art market.
“I do think that if you can get a good deal on pre-2022 prices and you have something of good quality, now is the time to buy,” said Hoffman. “My vision for the art market over the next ten years is, It would be a great investment. Now would be a better time to buy than a better time to sell.”
Consultants said that while auction sales were soft, private market and gallery sales remained strong. Sales of new works by galleries are less dependent on investment returns and therefore less susceptible to economic and stock market fluctuations. There has also been strong growth in private sales at auction houses, which facilitate transactions directly between buyers and sellers without the need for a public auction.
“In the private market, you can be very specific about who you approach and what types of buyers you approach,” said Drew Watson, head of art services at Bank of America. “You can be very specific about who you approach and what types of buyers you approach.” There’s a lot of discretion in determining what price you’re going to charge in the market, so you can go into the market and test the price and make adjustments based on the feedback you get.”
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