Trophy Sellers Endanger Art Auction Results – artmarketblog.com
One of the most dangerous scenarios for the art market is the existence of large numbers of extremely wealthy people who have no idea about the value of art yet have excessive amounts of money to spend on expensive trophies and status symbols. Sound familiar?. While the money was flowing, all those cashed up hedge fund managers and investment bankers were so dazzled by their own wealth that they bought works of art for every conceivable reason other than because it was good art. Not only did they buy art for the wrong reasons but because they had so much money they were willing to pay excessive amounts of money for what were probably mediocre or extremely overrated works of art.
Now that the river of money has dried up and money has started to become an issue for many of the formerly mega wealthy people who were spending big on art the reality of their misguided purchases will start to become clearer. The trophies that they acquired, which they probably now realise are not quite as fantastic as they first thought, will most likely be the first things to go. The problem is that when these works go to auction the sellers will be expecting to sell their works for at least what they payed for them. However because they paid excessive amounts for these works of art and because people are not willing to pay over the odds for anything other than the very best, it is unlikely they will get what they want for them. This won’t stop the owners of these works trying to get a return on their investment which will mean that the auction houses will most likely end up putting lots of works up for auction with estimates and reserves that are way too high for the current market. Excessively high estimates and reserves equals works being passed in or being sold for way under estimate which will make the whole art market appear to be suffering when in fact it really isn’t.
**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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