Presentation on theme: "Current Trends in the Art Market"— Presentation transcript:
1Current Trends in the Art Market Michelle DuBois, Ph.D.Winston Art Group
2Art EconomyIn 2013 (the last complete year for which we have figures) the total value of the top 5,000 most expensive artworks sold at auction reached USD $36.5 Billion (Source: Skate Art Market Research, Annual Art Investment Report)
3Most Valuable Artists on a Global Scale 2013 (Source: Skate’s Art Market Research, based on cumulative value of works in existence selling at threshold price of $2.5 millionArtistMarket Cap in USD1. Pablo Picasso3,454,255,2702. Andy Warhol1,968,881,8393. Claude Monet1, 695,980,1604. Francis Bacon877, 108,6895. Gerhard Richter854, 406, 3896. Mark Rothko7. Henri Matisse815, 185, 0338. Alberto Giacometti799, 732, 5939. Paul Cezanne719, 485, 78910. Amadeo Modigliani704, 829, 826
4Postwar and Contemporary Leading the Art Market Global Annual sales of postwar and contemporary art increased by 11% in 2013 with an annual auction tally of $6.7 billion (Source: Bloomberg Press, May 14, 2014)
5Some remarkable sales figures in 2013 include the following
6Francis Bacon, Three Studies of Lucien Freud, Sold at Christie’s, November 12, 2013, $142.4 M
7Andy Warhol, Silver Car Crash (Double Disaster) Sold at Sotheby’s, November 13, 2013 for $104.5M
8Jeff Koons, Balloon Dog (Orange) Sold at Christie’s November 12, 2013 for $58 M (highest price for living artist)
9Norman Rockwell, Saying Grace, Sold at Sotheby’s, December 4, 2013, for $46 M
102014 May Post-War and Contemporary Sale Christie’s May 2014 Contemporary Sale:$745 M – Most expensive single auction in history, 10 auction records set, 5 of these purchased by Chinese phone bidders.
11Barnett Newman, Black Fire 1, Sold at Christie’s May 13, 2014 for $84 Barnett Newman, Black Fire 1, Sold at Christie’s May 13, 2014 for $84.1 M. Previous high record for this artist was in 2013, at $43.8 M
12Francis Bacon, Three Studies for a Portrait of John Edwards, Sold at Christie’s, May 13, for $80.8 M
13Gerhard Richter, Abstrakte Bild (712) fetched $29 Gerhard Richter, Abstrakte Bild (712) fetched $29.8 at Christie’s, May 13. Last time it sold was in 2012 for $17.4 M This represents a 50% gain in value in 1.5 years.
14May 2014 Sales Sotheby’s May 2014 Contemporary Sale $364.3 M – Much lower returns, many thought it due to the fact they were in a hostile takeover situation and Christie’s used that fact to get better works of art. Still, they set records for 8 artists
15May 2014 SalesThe sale of contemporary art rose to 72% of all sales in NYC at auction in This is causing some concern that we might be reaching a peak in the art market and that a correction is immanent. Others are more optimistic and think the model of the art market is changing.
16Other strong marketsOld Masters, Impressionist and Modern markets all remain very strong due to limited inventory. The great pieces rarely go to market and when they do, fetch top prices.
17Unique features of the art market to be aware of 1. Most of the data we have on sales comes from public auctions. Gallery sales and private auction sales are unreported and information for these transactions is very difficult to obtain.2. Auctions are engaging in more private treaty sales, therefore information becoming less readily available.
18Unique features of the art market to be aware of 3. It is not uncommon for the identity of the seller of a work of art to be unknown, and to be identified as “Private Collection.” This fact was just upheld by a New York state court that just ruled in William J. Jenack Estate Appraisers and Auctioneers vs. Albert Rabizadeh, in which the court ruled that consignors can keep their anonymity while having legal recourse against reneging bidders.
19Unique features of the art market to be aware of 4. The history of ownership (Provenance) is often unknown.5. Related to this is that clear title to the object is also not certain.Title risks in art include:---theft (contemporary or historical)---creditor lien---authority to sellAris Title Insurance for Art – addresses chain of title and lien risks
20Projections for the art market The European Art Foundation “TEFAF Art Market Report” found that the art business rests on a slender stem of buyers. 8% of the art auctioned worldwide accounted for 82% of the money spent. Ultra-High Net Worth Individuals (UHNWI) seek works of between artists and skew the data towards those artists.
21Unique features of the art market to be aware of According to this report, UHNWI - about a third of whom are American – command $28 trillion in wealth.UHNWIs devote about 10% of their money to “investments of passion” such as art, jewelry and other collectibles, and sports. Globally, art accounts for 17 cents out of every dollar spent on “investments of passion.”
22Unique features of the art market to be aware of The report states that many HNWIs are increasingly approaching luxury goods as investments, and looking for sectors that have long-term value, notably art and antiques.”Presumably, they will also be seeking more sophisticated financial and legal strategies for managing these assets.
23Unique features of the art market to be aware of 1031 Exchanges is one such sophisticated strategy in the art market and appears to be on the increaseWorks well with collectors of art who wish to trade upAlso works in estate planning situations when heirs do not wish to keep art objects they would be inheriting; they can exchange undesirable paintings for ones they prefer.