The bellwether November art auctions next week in New York are poised for the biggest contraction in a decade.
The semi-annual sales of high-end Impressionist, modern, postwar and contemporary art at Sotheby’s, Christie’s and Phillips are targeting sales of $1.2 billion at the low end of the estimate range, down 24% from a year earlier. Not a single work is expected to fetch $50 million or more. The last time that happened at the November auctions was 2009, in the wake of the financial crisis.
It’s a stark reversal after a decade of eye-popping prices, fueled by the swelling ranks of billionaires and low interest rates. Two Novembers ago, a painting attributed to Leonardo da Vinci sold for $450 million at Christie’s. Last year, a work by David Hockney fetched $90 million, then a record for a living artist at auction. This year’s top prize at Christie’s—Hockney’s dreamy canvas “Sur la Terrasse”—is expected to fetch no more than $45 million.
“The environment is perhaps too uncertain and people aren’t putting their top lots in the sales right now,” said Adam Lindemann, a New York collector and gallery owner. “I don’t think this is a moment to get a premium price.”
The reduced estimates for the marquee evening auctions is the most striking shift. The auction houses, facing a dearth of big estates and major collections that added $3 billion in sales over the past three years, were forced to get consignments lot by lot, a difficult and expensive task further complicated by the geopolitical turmoil.
“The auction houses know where the great art is,” said Suzanne Gyorgy, global head of art advisory and finance at Citi Private Bank. “Every season they have to go out and build these sales. My impression is that they are approaching people, and if people don’t have a reason to sell right now, they are not selling.”
Christie’s evening sale of Impressionist and modern art on Monday has a low estimate of $148.3 million, down 51% from last year. The bottom estimate for a similar sale at Sotheby’s on Tuesday is down 34% to $186.8 million.
Estimates for contemporary sales are also lower, with an expected 17% decline at Christie’s and 23% for Sotheby’s.
Part of the problem is the auction houses themselves.
“The expectations have been so elevated that the average season is being viewed as a catastrophic event,” said Thomas C. Danziger, a New York art lawyer. “It’s not. The bread and butter of the auction room for the evening sales is not the works above $50 million, but the works between $5 million and $15 million. And there are plenty of works in that range.”
Guarantees to sellers, including fashion designer Marc Jacobs, money manager David Ganek and Bob Mnuchin, the art dealer father of U.S. Treasury Secretary Steven Mnuchin, played a big role in getting works on the block.
At Sotheby’s, 60% of the value of its evening sale of contemporary art is backed by guarantees; at Christie’s postwar and contemporary evening sale, guaranteed lots represent 49% of the low estimate.
The houses offset their risk on most guaranteed lots—including Claude Monet’s “Charing Cross Bridge” (estimated at $20 million to $30 million at Sotheby’s) and Ed Ruscha’s painting spelling the word “RADIO” in yolk-yellow on sky-blue background (estimated at $30 million to $40 million at Christie’s)—by pre-selling them to third-party backers through irrevocable bids.
Sotheby’s, however, is still on the hook for the guaranteed Mark Rothkopainting “Blue Over Red,” estimated at $25 million to $35 million. The companies often make additional deals in the days, and sometimes minutes, leading up to the auctions.
Phillips, a smaller rival to Sotheby’s and Christie’s, has a nominally smaller evening sale on Nov. 14, with a low estimate of $92 million, down from $100 million last November. Its top lot is Jean-Michel Basquiat’s “The Ring,” estimated at $10 million to $15 million.
Auction house executives are quick to point out that the contraction is on the supply side, and that demand is healthy for works of high quality and correct estimates.
“The high-end buyers are very much there,” said Alex Rotter, chairman of postwar and contemporary art at Christie’s. “It doesn’t really matter for them if it’s $30 million or $50 million or $70 million. They want the best quality. Right now the best quality is under $50 million.”
Some of that quality comes from the inclusion of artists who’ve been traditionally missing from the high-stakes auctions.
Among them is Charles White, the late black artist who taught current stars Kerry James Marshall and David Hammons. His 1976 painting “Banner for Willie J” is estimated at $1 million to $1.5 million at Christie’s. Sotheby’s will start its contemporary auction with White’s 1953 charcoal drawing of mother and child “Ye Shall Inherit the Earth,” estimated at $500,000 to $700,000. The artist’s current auction record is $509,000, according to Artnet.
“There are some real treasures in these sales,” said Citi Private Bank’s Gyorgy. “The collectors we are talking to, everyone is engaged.”