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One of the biggest takeaways from two weeks of nonstop art auctions in New York this month is that the appetite for quality works of art is as high as ever.
Beginning Tuesday, May 8, with the sale of Peggy and David Rockefeller’s vast and wide-ranging collection, through until Thursday, May 17, with contemporary art evening auctions, collectors spent a total of more than US$2.8 billion during this year’s spring season.
Yet much of the excitement of the two-week selling spree wasn’t in the biggest ticket sales—the $157.2 million paid at Sotheby’s May 14 evening sale of impressionist and modern art for Amedeo Modigliani’s Nu couché (Sur le côté gauche), or the $115 million paid at the Rockefeller evening sale of 19th and 20th century art on May 8 for Pablo Picasso’s Fillette à la corbeille fleurie.
Instead the fun was in live auction volleys for pieces that went for way over their estimates, like Kerry James Marshall’s Past Times, reportedly bought by rapper Sean Combs for US$21.1 million after a furious round of bidding, or for a work like Pat Steir’s Elective Affinity Waterfall, which sold for US$2.3 million at Phillip’s May 17 evening auction of contemporary art. Marshall’s 1997 acrylic-and-collage on canvas carried an estimate between US$8 million and US$12 million, while Steir’s oil painting was estimated between US$600,000 and US$800,000.
One reason for the frenzied bidding at lower price points and for works by contemporary artists coming into their own, is that collectors recognize these niches provide an opportunity to “create wealth,” says Phillip Ashley Klein, executive director of Capco Digital, a strategy, digital and management consultant focused on financial services.
Collectors are looking more closely at works by artists of African descent, Latin American artists and female artists, Klein says. “Art and society is intrinsically linked, and there’s a societal movement around women and minorities.”
To Eric Beard, national art services director at U.S. Trust, there’s heightened interest for a “new guard of contemporary artists.”
It was “interesting to see George Condo making above US$6 million for a piece painted just six years ago,” Beard says, referring to Nude and Forms by Condo, a 60-year-old contemporary artist, which sold for US$6.2 million, with fees, at Christie’s last Thursday, more than double its US$2.8 million high estimate.
Similarly, Suddenly Last Summer, a painting by the British artist Cecily Brown, age 49, sold for US$6.8 million, with fees, soaring above a US$2.5 million estimate amid active bidding at Sotheby’s evening auction of contemporary art.
“These are the artists that museums and curators are starting to buy, they are starting to solidify their role as icons of the 21st century,” Beard says, but adds: “This is a very dynamic thing—trying to figure out the art of our time. It takes time to identify the ultimate influential artists.”
One reason for these shifting dynamics is growing demand for collectibles from a rising group of wealthy people, and there are “only so many seminal works,” says Capco’s Klein, who is founding the firm’s fine arts and collectibles group.
“What you’ve got is supply is way outstripped by demand,” Klein says. “People want great works. At the same time, you don’t have blockbuster works going to market.”
Wealthy collectors who are searching for those seminal works, or who have already built a collection around them, are therefore looking for “unique, iconic pieces” in new areas, like works on paper within the art market, or in new categories, such as luxury watches or cars. These are areas where “maybe there’s an opportunity to buy low and get interesting pieces,” says Rich Walden, chief credit officer at JP Morgan Private Bank.
For known masterpieces, the auction houses this season seemed to lean on third-party guarantees or irrevocable bids, strategies designed to reduce the risk for both the auction houses as well as for collectors putting their prized works up for sale. It was a strategy that seemed to deflate interest in the auction room for both the Modigliani and the Rockefellers’ Picasso, with each painting going to the guarantor.
Paying $157.2 million, with fees, for the Modigliani was “an incredible price,” Walden says. But it “might as well have been a private sale.”
Scott Nussbaum, head of 20th century and contemporary art for Phillips in New York, says third-party guarantees are a common way to secure works of art for sale, and he doesn’t expect that to change.
The challenge for the auction houses is “to secure works at estimates and prices the market can bear comfortably,” Nussbaum says. If the “market feels [a work] is priced well, it will attract bidding, competition and excitement, something we always seek to secure for a sale.”
Phillips got that Thursday night with Jean-Michel Basquiat’s Flexible, an acrylic and oil-stick work executed on slats of wood that once formed a fence for the artist’s studio patio in Venice, California, according to the auction house. With a pre-sale estimate of US$20 million, the work attracted global interest, Nussbaum says, and Phillips knew they had “numerous parties preparing to bid.” After a lively three-minute round of bidding, Flexible, which did not carry a guarantee, sold for a hammer price that was double the estimate—a total of $45.3 million with fees.
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