Two Weeks, $1 Billion in Art

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With the debt crisis in Europe, the looming fiscal cliff in the US and the slowdown in emerging markets, we are in the midst of two weeks that pose a test to the strength of the art market. This week, both Christie’s and Sotheby’s will auction top works by blue-chip artists in the Post-War and Contemporary sales on Tuesday and Wednesday, following the mixed results from last week’s Modern and Impressionist performance. Between these two major auction house rivals, more than $1 billion worth of art is expected to transfer hands during the four major sales. What do the results from these two sales categories at the top auction houses indicate for the strength of the market as 2012 wraps up? Last week’s sales of Impressionists and Modern art in New York received lackluster reports, just as the stock market felt a 3.6 percent decline in the Standard & Poor’s 500 Index. Potential buyers balked at mediocre material in a category where quality work is increasingly hard to find. Almost one third of the lots found no buyers and totals at both Christie’s and Sotheby’s fell short of the low end of the pre-sale estimates. Fiscal cliffs, the Eurozone crisis, and Hurricane Sandy all took their toll, but despite disappointments, $448 million changed hands which is more than in the equivalent sales held last November or the previous spring. A stunning Monet painting of his iconic water lilies, which was never seen before at auction, sold within the estimate for $44 million. Picasso, not surprisingly, was the indisputable star as Sotheby’s which featured 9 works by the cubist master. A seminal 1932 portrait of his mistress and muse Marie-Therese Walter (pictured above) fetched $41.5 million, yet victories were isolated in both venues confirming buyers' carefully controlled bidding. Money surged into the art market beginning in 2009 as the world’s billionaires contended over the most recognizable names in art to diversify their investments during the aftermath of the financial crisis. The frenzy for blue-chip art only increased as China, Russia, and other emerging countries began producing their own millionaires to add to the competition. The market growth continued through 2011 when prices for contemporary works increased more than five times according to some reports entering the third quarter. The pending results of the 2012 auction season matter more than ever to predict the course in this volatile market. High pressure is now being placed on the Post-War and Contemporary sales this week, hoping to make up for last week less than stellar sales. Both major auction houses are putting all their chips on the table to finish 2012 with a bang in this most important category. Sotheby’s went first on Tuesday night, staging its biggest auction in its 268-year history. Failing to disappoint, the $375.1 million sale total surpassed the high presale estimate of $374.8 million, even though 11 of 69 lots did not sell. Six artists set records, including Jackson Pollock, Franz Kline and Arshile Gorky yet it was Mark Rothko who led the sale: “No. 1 (Royal Red and Blue)” - appropriately titled for the highest selling work - fetched $75.1 million, almost reaching the artist’s auction record of $86.9 million set at Christie’s in May. A small but unique Jackson Pollock oil, enamel, and aluminum on canvas drip painting, titled “Number 4, 1951,” sold to a telephone bidder for a record $40,402,500, crashing the pre-sale estimate of $25-35 million. Now it is up to Christie’s to keep the momentum following Sotheby’s record-breaking sale last night in New York. Following the Post-War and Contemporary sales, we will be able to assess whether or not the art market is removed from the fiscal cliff on the horizon in the US and the global economic crisis. This week is crucial in determining if the strength of the market is waning as the year comes to a close. Will Christie’s sale tonight prove the art market’s buoyancy, or was Sotheby’s performance just a fluke? Check back with MutualArt to find out the most up-to-date auction results. Written by MutualArt's Christine Bednarz.