The Price and Value of Contemporary Art – artmarketblog.com

 The Price and Value of Contemporary Art   artmarketblog.comThe problem with the market for contemporary art is that the perceived value of the work by a contemporary artist (especially emerging artists) is often reliant on someone taking the risk of backing that artist which then adds credibility to their work thus prompting other people to buy their work as well.  With the work of contemporary artists (even more so with emerging artists), the price of their work and the value of their work are often virtually one in the same because it is likely that there will be little or no other factors with which to determine the value of their work.  The reason that I refer to the value of work by emerging contemporary artists as perceived value is because it is a value based on the opinion of who ever is purchasing the work. It is unlikely that an emerging artist’s career or their body of work would have had time to develop or progress enough for someone to make a justifiable judgment regarding the value of the work based on the characteristics that are most often used as indicators of value. These indicators include: provenance, contribution to art history, rarity, exhibition history of artist, critical analysis, significance of particular work in artist’s oeuvre, recognition by scholars and academics etc.

In a nutshell, the contemporary art market is driven by people’s perception of value which is, in turn, based on other people’s perception of value which is basically what people refer to as the domino effect. One person gets the ball rolling and others keep it going. This trend is evident with the likes of Charles Saatchi who can make or break an artist because of the influence that he has on people’s perception of an artist’s work. Saatchi’s influence is so great that people mimic his actions regardless of their own point of view and regardless of what Saatchi’s motives for purchasing that artist’s work may have been. By the very act of purchasing an artwork Charles Saatchi or anyone with a similar level of influence can, by purchasing a work of art, give value to that work of art and the artist that painted it. Because there is no real set of factors that dictate what determines the value of a work of contemporary art by an artist whose career is still in the developing stages we often have rely on the opinion of experts such as art critics, gallery owners, museums, collectors, dealers etc. to provide an opinion of the value of the work of a contemporary artist. An opinion which, in the case of gallery owners and dealers, is quite likely going to be at least somewhat biased and subjective.

During boom times the prices being paid for works by many of the contemporary artists rise at a far faster rate than they should and for reasons that are not related to the actual value of the artist and their work. It is usually the speculators and flippers who push the prices for the contemporary works of art sky high as they try and make a quick buck. However, when the potential for making a quick buck disappears and the art market takes a hit, these flippers and speculators are the first to exit the art market. Because the value associated with a work of contemporary art is a type of value that is dependent upon people’s actions and is not an inherent value that is automatically associated with that work of art, if people stop buying the work work of such an artist then there are no, or very few other factors that give value to the work of art. With the one major source of perceived value no longer in play people then start looking at the traditional defining factors of value such as the ones I mentioned earlier (provenance, contribution to art history, rarity, exhibition history of artist, critical analysis, significance of particular work in artist’s oeuvre, recognition by scholars and academics etc.). Because the traditional defining factors of value become much more identifiable and qualifiable the longer the artist has been working and the longer the artist’s work has been in existence, the work of the old masters becomes far more attractive.

People turn to the old masters and works by more established “blue chip” artists during times of art market uncertainty because the value of works by such artists is much easier to identify and because the value of such works is actually associated with the characteristics of the artist’s career and their body of work and not just based on perception. Because the value of works by “blue chip” artists such as the old masters is much easier to determine, works by these artists are far less prone to the rapid rise and over-inflation of prices like contemporary works are and, as such, represent a far more stable and less risky investment. For this reason it is quite likely that there will be a renewed interest in works by the modern and old masters and a reduced level of interest in works by contemporary artists and an even lower level of interest in works by emerging contemporary artists.

 The Price and Value of Contemporary Art   artmarketblog.com**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.comt The Price and Value of Contemporary Art   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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  • http://www.holtongallery.com Matt Holton

    Great post and very informative. I have two questions. Do you see this as a growing trend as we head into more difficult financial times? And is this a trend that is across the board internationally, or are some markets still more speculative of contemporary art?

  • http://www.artmarketblog.com artforprofits

    Hi Matt,

    Thanks for the comment. History has shown that people tend to favour the more familiar and more stable work of old masters and the blue chip modern masters during times of economic crisis. This trend should progress as the difficult financial times continue. There has, however, been less of a move away from contemporary art than I would have thought which I believe is a positive indication that the art market has survived the economic crisis better than one would have expected.

    Nick

  • http://joyengelmangallery.com joy engelman

    Hi Nick

    Art is always valued by the perceptions of the viewer. It is good advice indeed to only buy what you can live with as you may have to!

    There is no yardstick by which one can assess the value of an artist or their work as even within the artist’s life, they can produce from the banal to the confident, from the simple to the deeply philosophical. And there are many of the old master’s works that lay around and when ‘found’ are still considered to be far less worthy than other pieces that have say been picked up by major museums.

    The fact that we can’t price art by the square inch is both it’s saving grace and it’s blight! Each work needs to be taken on it’s own merit and in the circumstances that it has been produced. And sometimes, it’s relevance to the world at large grows and often, over time it loses relevance.

    Heaven help us all when we can objectively walk up to a piece of art and pull out the rule book and confidently make it’s price! All the fun (and mystery) and challenge of art would disappear in a flash!

    A sculptor once said to me that he couldn’t for the life of him understand ‘flat art’! As a flat art maker, I know what he is alluding to….

    Often collectors ( and speculators alike) get caught up in the glamour of the artist, or of the moment, get attracted to the entertainment of art, the allure of the artwork or artist and do not make ‘good’ decisions about investment…..but is art really about investment at the end of the day.

    Whilst I think it’s great that people want to jump on the bandwagon and be seen to ‘know’ about art by collecting (or investing) in it, is that really what art is about?

    For me as an artist, the art is always about that moment when standing before the canvas, one realises that they have achieved what they have truly set out to achieve, a piece of work that truly expresses the truth of their life, their vision…….in that moment one has created an art work…….whether it goes on to adorn someone’s walls, or sit in their vault waiting to be resold at a higher price is inconsequential to the act of making art. They are the voyeurs! They are the watchers to that sensual moment when an artist is complete in themselves with their work…however fleeting…….

    Thanks to the ‘outsiders’ to my world, I can make some money to help me with this disease called ‘being an artist’…but beyond the creation of the work, what happens to the artwork is for the most part inconsequential. Whilst one hopes that an artwork goes on to achieve some life of it’s own, it’s far more important to get on with the next expression and creation……

    Thank you for your great blogspot. I really enjoy it as it gives me a valuable insight as to how others see art……how they devalue it by making it a commodity or worse a speculative asset……how they often miss what the artwork is about.

    it is sad that in this contemporary world, there is more talk of an artwork’s monetary value than of it’s content and what it conveys…..the meaning of the work……

    nJoy

  • http://joyengelmangallery.com joy engelman

    Ah and I would also like to state, that yes, it would be a wise suggestion to go back to the values that you mention for judging an artist’s worth (or that of an artwork) of CV etc as a guideline for value.

    It is here in Oz and the US that the art of gambling on an artwork has taken off most…..or an artist….and the market tends to favour the ‘new’ or the ‘young’ as there is an obvious tendency for those works to increase in value especially in the short term……

    However, in Europe, the values you mention are the strong indicators for investment purposes and they are not so prone to gamble…..

    In Russia at the hermitage, indeed they are trying to make some sense of being able to set guidelines for value but are hampered by the various ways we ‘see’ art.

    The Australian Tax Office seems to have a grip on what an artist is though surprisingly…….

    but that’s for another day!

    nJoy

  • http://www.antoniobaldassarra.it antonio baldassarra

    Alo’ Nicholas,
    sorry,I speak italian -french!!
    Io lavoro da tanti anni.Ho seguito una strada anomala in arte,non cercando uno stile ,ne una regola identificativa per il mio lavoro.Ho lavorato in liberta’ ,perche’ penso che un artista sviluppa una personalita’ lavorando cosi’ e poi il nuovo, viene spontaneamente con il tempo!!! Io ci credo!!! Come faccio a dare un valore al mio lavoro ,non stando sul mercato ,ma lavorando da piu’ di 35 anni??? Ho amatori che mi pagano anche molto ,ma non ho seguito i circuiti del mercato!!! Allora cosa pensi??? Grazie Nicholas!!! You have transeletor ????

  • jamievandenberg

    Well hello Nick,
    Your Post was accurate on the projected rise in the popularity of more established artists and historical periods. However, if your readers are still interested in acquiring emerging contemporary artists I recommend that they peruse some of our fantastic instructional books. In our Chelsea Workshop Series we teach the basic concept choices applied in the creation of most cutting edge work. Investors benefit from understanding the underlying philosophical framework or Magic Concepts. This offers an advantage over value analysis based solely on the paper insurance of CV’s, biographical story lines, pedigree, or outside marketing (which is not internal within the work). As anyone who flips through a 15 year old art publication knows, despite the hype, most names/brands will be forgotten. Protect yourself with our Contemporary Artistic Technologies!
    Yours truly,
    Jamie Vandenberg http://jamievandenberg.wordpress.com/

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