Ignore November Art Auctions – artmarketblog.com
There seems to be a significant amount of concern regarding the outcome of the November art auctions to the point where those who follow what some journalists write about the art market might believe that the November art auctions are a crucial indicator of the current and future health of the art market when they are not. The low correlation between what is currently happening in the art auction market and what is currently happening in the rest of the art market (galleries, fairs etc.) is, in my opinion, more than enough reason to reject current art auction results as the sole indicator of the health of the art market. The art auction market was isolated enough from the rest of the art market during the market peak but is now even more isolated which means that the art auction market only provides part of the story.
Because many of the estimates and reserves set prior to the financial crisis will have remained unaltered the auction results are likely to provide more realistic impression of what people are currently willing to pay for art at auction. This is due to the lack of the encouragement to bid and the incentive to buy that are a result of lower estimates and reserves . The standard practice of altering estimates and reserves to suit market conditions does, however, mean that although the results of the auctions with unaltered reserves and estimates may reflect a more accurate representation of the current the cannot really be compared to past auction results and should therefore not be relied upon as an indicator of the status of the art auction market.
In conclusion, the main reasons that the November art auctions should not be used as an indicator of the health of the art market are:
-The low correlation between what is currently happening in the art auction market and what is currently happening in the rest of the art market
-Buyers are are abandoning auctions for the safety and control of purchasing at galleries or fairs.
-Sellers are avoiding auctions at the moment for fear of having works not sell or sell for well below the estimate either of which is likely to have a negative effect on future attempts to sell those works.
-Reserves and estimates will most likely have been set prior to the financial crisis took hold meaning that they will be reflective of expectations prior to the financial crisis and will be extremely optimistic.
-Those buyers and sellers who don’t have the sort of money available to be able to shrug off the purchase of a work for way above estimate or the sale of a work at a loss will be more likely to be sitting out the November auctions and waiting to see how things pan out.
Lot Sold at Sotheby’s November 3 sale.
Hammer Price with Buyer’s Premium: $60,002,500 USD
**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.