Art Market Blog – Analysing Art Auction Results

auction room Art Market Blog   Analysing Art Auction ResultsYou 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!!!

 Art Market Blog   Analysing Art Auction Results**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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  • Adam

    Certainly analyzing just auction results doesn’t provide us with a full picture of the state of the art market, but we can only analyze what we have to work with.

    Given that, if you clearly analyze the Sotheby’s auction results (look beyond the headlines) from their last auction, there is an obvious softening in the contemporary art market.

  • http://www.artmarketblog.com artforprofits

    I agree with you about the auction results but I am not so sure that the market is softening. I do however think that the market is evolving, but more on that in another post

    Nicholas Forrest
    artmarketblog.com

  • Adam

    You can call it a softening or correction, but overall I believe the statistics show that the low-end works in the most recent Christie’s and Sotheby’s Contemp Sales failed to perform at a level on par with similar sales over the past few years. This was particularly the case with the Chinese artists in Sotheby’s most recent sale. I think they might have been somewhat overvalued, apparently the market might be agreeing.

  • http://www.artmarketblog.com artforprofits

    It is true that the lower end work shave not been doing as well but you will find that there is a cycle in the art market where the top end works do well for a while until supply drops then the lower priced works do well for a while etc. etc.

    Nicholas Forrest
    http://www.artmarketblog.com

  • Adam

    Well that may be the case but when supply for high-end works disappears and low-end works become more prominent in auctions, that to me seems like total sales numbers will drop and the art market will in essence produce negative growth.

  • Stuart Young

    What do you think will happen over the next 12 months in the collectible print market such as orginal Audubon prints? Thanks

  • http://auctiondash.com Auction Dash

    Really interesting post. Particularly the point of setting the estimate too high, then selling later. Interesting psychology. I need to research these auctions a bit. Does contemporary art sell well at auction?

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