Art Market Blog – Analysing Art Auction Results
You will often see reports in the news of a major work of art that has failed to sell at auction and many of these reports will take the failure of the work to sell as sign of impending doom and gloom. Because auction sales are the most widely publicized and the most transparent form of art market transactions there tends to be a greater emphasis and degree of importance put on auction results. This high degree of reliance on auction results as an indicator of the health of the art market is, however, neither justifiable nor accurate due to the fact that there are so many different factors that can result in a painting not selling or even a bad auction.
The failure of a major work of art to sell at auction does not necessarily indicate that people do not have the money to spend on art, that confidence in art as an investment has declined or that the art market has reached its limit. Achieving a good price for an artwork requires the right buyers, the right price, the right timing, the right conditions, the right atmosphere and strategic planning. Just one of these factors not being quite right can be enough to cause an unfavourable result.
There are too many different scenarios that could result in a work being passed in (not sold) at auction to list in one post but I have included a few of the more common ones below:
-An estimate that is too high (I know of many different occasions where an artwork has failed to sell only to be re-auctioned a month later with a lower estimate and sell for higher than the original estimate. It is surprising how much of an effect this can have)
-Most auctioneers will put a couple of major works at the beginning of the auction to create buzz and get people excited. Just one of those key works not selling can be enough to spook all the bidders and result in a poor result for the whole auction
-People will often wait until the auctioneer reduces the opening bid to begin the bidding but if the auctioneer continues lowering the opening bid without success there will be a point of no return where will begin to question why no-one is else is bidding and resulting in the work failing to get any bids at all. It is impossible to know where the point of no-return is until it actually occurs.
I think that this is a really important topic so I will be devoting a few more posts to it in the near future. Stay tuned!!!
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.
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